MGA further strengthens regulatory oversight in 2018, says annual report

Heathcliff Farrugia, Chief Executive Officer of the Malta Gaming Authority. (source: screenshot from the annual report of MGA)

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Last year, the Malta Gaming Authority (MGA) mainly focused on the implementation of the new Gaming Act which empowered the authority to further strengthen its regulatory oversight, the MGA says in its Annual Report and Financial Statements for the financial year ending 31 December 2018, published recently, according to a press statement sent to Business Malta. The MGA received 209 applications for a licence and issued 93 licences to gaming operators in 2018.

The MGA focused on the regulatory compliance through the implementation of a number of innovative internal and external initiatives which improved overall governance and supervision of the gaming sector, the press statement says. At the same time, the authority says it continued to further strengthen its anti-money laundering (AML) and combatting financing of terrorism (CFT) supervision to ensure effectiveness in the mitigation of ML/FT risks relating to gambling services.

In 2018, the MGA and the Financial Intelligence Analysis Unit (FIAU) jointly issued the Remote Gaming Implementing Procedures – Part II document that was directed toward the remote gaming sector. Throughout the year, both authorities participated in cooperative initiatives to strengthen the oversight of the gaming sector, the press statement mentions one of the highlights of last year.

The MGA conducted a total of 33 AML/CFT full-scope examinations, eight of which were conducted jointly with the FIAU. The authority says it also placed a strong emphasis on effective enforcement. To this effect, the MGA has issued 16 Notices of Reprimand and 73 Notices of Breach, suspended four licences and cancelled another eight. In addition, a total of 139 administrative fines were imposed on operators following various regulatory breaches.

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The MGA’s Fit & Proper Committee deemed 63 individuals or companies to be unsuitable for a licence, or for a significant role in a licensee, as the case may be, in 2018. In particular, 37 of these were related to individuals or companies considered as not having satisfied the integrity and reputation pillars of the MGA’s fit and proper criteria due to possible connections to money laundering or funding of terrorism, the authority says. Around 2,000 criminal probity screenings were conducted last year.

The authority also established the so-called Commercial Communications Committee as required in terms of the new regulatory framework, ensuring due process in the assessment of regulatory breaches stemming from the requirements relating to commercial communications. During the year, a total of 14 cases were evaluated, out of which seven decisions determined that there had been a breach of the regulations, the press statement says.

The MGA received 209 applications for a licence and issued 93 licences to gaming operators, with the remaining ones still going through the acceptance process. A total of eight licence applications were rejected during 2018, figures published in the annual report show.

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The MGA continued its digitisation efforts over the course of 2018, including further updates to the Licensee Relationship Management System to cater for the submission of the Monthly Licence and Compliance Contribution Report. Additional functionalities will be added to the official website of the authority in 2019, the authority says.

Becoming a ‘knowledge-driven organisation’

Delivering on its vision to become an “increasingly knowledge-driven organisation”, the MGA says it conducted and published the results of two major surveys in 2018. The areas analysed by the MGA included the skills gap in the gaming industry and the threats and opportunities associated with the consumption of gambling and gaming services by Maltese residents, the press statement adds.

“2018 was a remarkable year for the Authority, predominantly because of the coming into force of the new law on the 1 August 2018. The new framework strengthened the MGA’s supervisory role, specifically in the areas of compliance and enforcement, enabling it to focus efforts on areas which present a higher risk profile,” Heathcliff Farrugia, Chief Executive Officer of the Malta Gaming Authority, said when publishing the report.

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“The new regulatory regime has also been pivotal in ensuring the Authority could become more agile in its decision-making. Last year was also the year when Malta adopted the EU’s 4th Anti-Money Laundering Directive, which saw online gaming companies in Malta becoming obliged entities for the first time. This was challenging, both for licensees and the MGA, which together with the FIAU, started conducting onsite AML inspections,” the CEO added.

Looking into the anticipated progress this year, Mr Farrugia says that consolidation and the integrity of the market are crucial. “In 2019, the MGA’s focus will be that of consolidating what has been built so far, and continue building on its regulatory powers, to ensure holistic regulatory oversight focusing on the integrity of market participants and the protection of consumers, whilst also embracing technological innovation without prejudicing the attainment of its regulatory objectives,” the CEO concluded.

The Annual Report and Financial Statements for the financial year ending 31 December 2018 is available for public view at the official website of the Malta Gaming Authority.

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