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MGA proves fines and warnings can be as effective as bans

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Report proves MGA licensees were effectively managed in 2021 through penalties and warnings rather than license bans.

Malta was considered the pinnacle of online gambling jurisdictions. Their metrics were firm yet fair, and the regulator saw its licensee pool expand rapidly. However, since then, operators have raised concerns about the heavy-handed manner in which the Malta Gaming Authority (MGA) dealt with infractions, opting to cancel casino licenses rather than rehabilitate the offender.

Their position as ‘regulator of choice’ was further tarnished in 2021 when the Financial Action Task Force (FATF) added the country to its Grey List.

Given that FAFT is a global anti-money laundering agency, this listing naturally raised concerns about the region's honesty and trustworthiness as a gaming regulator.

MGA focused on rehabilitation

In a recent retrospective on the regulator's achievements, practices and results in 2021, it was reported that MGA casinos were dealt with far less harshly than in previous years. This more nuanced approach to managing their licensee was clearly seen in the reduction of banned and suspended casinos.

According to the report, only 7 online casinos lost their licenses in 2021. This is down dramatically from the 12 lost in 2020 and the 14 in 2019.

Looking at the number of suspended licenses, which can be reactivated once critical criteria are met, not a single online casino was suspended in 2021. This is an incredible result compared to the 14 combined suspensions across 2019 and 2020.

A soft touch does not mean going soft

The Authority has had to rely on warnings and administrative penalties to maintain control of the iGaming sector to avoid widespread bans. The report showed that far from being passive in this regard, the MGA had stepped up its reviews and liberally applied these less permanent punishments.

The report noted: “In 2021, a total of 210 cases were discussed by the Compliance and Enforcement Committee (CEC). The latter’s decisions in such cases relate to the evaluation of enforcement recommendations with respect to the non-compliance breaches.”

These compliance discussions resulted in no less than 31 administrative penalties being applied to casino game providers who stepped out of line. A marked increase from 28 in 2020 and 24 in 2019. It was, however, in the area of “official warnings” that the MGA proved to be most industrious, doling out a total of 64 notices.

Retaking the reins

With the advent of the recent pandemic, land-based gambling in Malta came to a standstill. This also meant that the previous review and inspection processes were put on hold.

To address this shortfall, the Gaming Authority ramped up inspections during 2021. This drive included in-person visits to nearly 6000 land-based casinos, more than 2000 gaming parlours, over 1500 lottery sellers, 92 real money bingo halls, and 64 non-profit tombolas.

FAFT gives MGA the green light

As we have previously reported, the Malta Gaming Authority received the all-clear from FAFT earlier this year. This was no simple task. In addition to successfully addressing a series of FAFT concerns over internal processes, the Authority had to deal with its chief technical officer being charged with several financial crimes, including fraud and money laundering.

To their credit, the MGA is once again a whitelisted territory and diligently uses the Financial Intelligence Unit (FIU) to pursue any infringements of the tax code and cases related to money laundering.

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