The Malta Gaming Authority (MGA) has published its Annual Report and audited Financial Statements for the financial year ending December 31st, 2022. In addition to outlining the performance of the Maltese gaming business in 2022, the report gives a broad summary of the Authority’s accomplishments during the year under review, and offers a medium-term outlook for the future. Besides, the text shares key statistics for the land-based and online gaming industries in the territory.
The entity informs 28 compliance audits were conducted and 228 desktop reviews were carried out during 2022, accompanied by additional AML/CFT compliance examinations by the FIAU, or by the MGA on its behalf. Following information which emerged from compliance audits, compliance reviews and formal investigations, the Authority issued 10 warnings and cancelled six (6) licenses. In addition, the MGA applied a total of 16 administrative penalties as well as three (3) regulatory settlements, with a collective total financial penalty of €179,150.
Moreover, a total of 25 licensees were subject to remediation and/or administrative measures by the FIAU, ranging from written reprimands to administrative penalties, based on the breaches identified during examinations carried out in previous years, including by the MGA. In total, these amounted to just over €738,000.
Six (6) individuals and companies were deemed by the Fit & Proper Committee to not be up to the Authority’s probity standards due to various factors, including due to the risks of money laundering or funding of terrorism.
Forty-one (41) gaming license applications were received during 2022. Thirty-one (31) licenses were issued, while twenty-one (21) were unsuccessful.
Over 1,500 criminal probity screening checks were undertaken on individuals, shareholders and ultimate beneficial owners, key persons and other employees, and companies from both the land-based and online gaming sectors.
The Authority conducted 48 interviews with prospective MLROs and key persons carrying out the AML/CFT function to determine the knowledge and suitability of each candidate.
The Commercial Communication Committee of the MGA issued a total of nine (9) Letters of Breach following breaches of the Commercial Communications Regulations (S.L. 583.09).
In its efforts to protect players and encourage responsible gambling, the Authority supported a total of 5,280 players who requested assistance, covering most of the cases received during 2022 and the spill-over from 2021.
The MGA conducted 85 responsible gaming-themed website checks, through which 38 URLs were found to have misleading information. This led to 17 notices being published on the MGA website, and 30 observation letters that were sent out reflecting responsible gaming issues.
IMPROVEMENTS IN EFFICIENCY AND EFFECTIVENESS
The Authority commissioned a sectorial skills strategy to address the gaming industry’s challenges with respect to the ongoing demand for qualified and skilled human capital, which increased significantly as the economy grew and diversified into numerous sectors. Consultation exercises were conducted with industry stakeholders regarding the bets offered by licensees, with a focus on sports integrity and player protection considerations. This was made on the proposed amendments to the Player Protection Directive (Directive 2 of 2018), and on the proposed policy on the use of Innovative Technology Arrangements (ITAs) and the acceptance of Virtual Financial Assets (VFAs) and Virtual Tokens, which led to amendments and a finalized Policy, respectively.
Besides, the MGA streamlined the approval process of appointing an MLRO in collaboration with the FIAU while, at the same time, ensuring that the industry is kept updated on any changes affecting this process and on any best practices that are intrinsic to the role of the MLRO.
The concept of Agreed-Upon Procedures (AUPs) Reports was introduced, covering player funds and Gaming Revenue. Audit firms are drawing up these reports in compliance with the ‘International Standard on Related Services (ISRS) 4400 (Revised) Agreed-Upon Procedures Engagements’.
The MGA started a process for possibly implementing a voluntary Environmental, Social and Governance (ESG) Code of Good Practice for the industry to showcase and increase the positive social and environmental impacts of the gambling sector.
NATIONAL AND INTERNATIONAL COOPERATION
Throughout 2022, the Authority issued 43 news items on its website and 26 external communications, providing a synopsis of various updates and developments at the Authority and across the industry. A total of 224 alerts were sent to the industry, 167 of which were also sent to the appropriate Sports Governing Bodies.
There were also 44 requests for information specifically relating to the manipulation of sports competitions or breaches in sports rules submitted by enforcement agencies, sport governing bodies, integrity units, and other regulatory bodies. As a result of such requests, data was exchanged in 25 instances. Additionally, a total of 475 suspicious betting reports from licensees and other concerned parties were received.
During the period under review, the Authority was a direct participant in 15 different investigations across the globe relating to the manipulation of sports competitions or breaches in sports rules, as well as an indirect participant in 3 such investigations.
The Authority received a total of 83 international cooperation requests from other regulators and sent 97 such requests, with the majority referring to requests for background checks as part of an authorization process.
A total of 177 official replies were issued providing feedback on the regulatory good standing of the licensed operators to the relevant authorities asking for this information.
The MGA works together with other local regulating authorities and governing bodies. This is reflected through responses furnished by the MGA to requests for information made by the Asset Recovery Bureau (ARB), the FIAU, as well as the MPF on the gaming sector. Additionally, the relevant information is provided to the Sanctions Monitoring Board (SMB) to assist in issuing penalties in instances of non-compliance with sanctions screening obligations.
In publishing this report, Dr. Carl Brincat, CEO of the MGA, declared: “This report is testament to our collective efforts in promoting a fair and sustainable gaming ecosystem. Through proactive measures and leaner regulation processes, we strive to ensure a level playing field that nurtures innovation while safeguarding against any potential risks.”
He added: “As the global gaming landscape evolves, our role becomes even more critical. We embrace this responsibility with utmost determination, working tirelessly to stay ahead of emerging trends, technologies and challenges. We remain steadfast in our pursuit of robust frameworks that inspire confidence, protect vulnerable individuals and render Malta the home for gaming operators of good will.”