SBC News Voice of the Sports Betting Industry
The government of Malta has detailed that it has strengthened policy and compliance in the gambling sector to minimize exposure to threats and vulnerabilities stemming from money laundering (ML) and terrorist financing (TF).
Measures were outlined by the ‘National Risk Assessment (NRA) on Money Laundering (ML) and Funding for Terrorism (TF)‘, a review of financial risks across Malta’s business sectors.
The NRA was initiated in 2021 by the Ministry of Finance and Employment, as Malta was placed under ‘enhanced monitoring’ by MONEYVAL and required to ensure that Financial Action Task Force (FATF) measures were implemented by relevant authorities.
NRA observations/evaluations have been coordinated by the National Coordinating Committee on Combating Money Laundering and Funding of Terrorism (NCC), in close collaboration with key authorities including the Malta Gaming Authority (MGA).
For igaming, the NRA reports that Malta’s overall money laundering residual risk has decreased when compared to the 2018 assessments, ‘reflecting the effectiveness of mitigating measures implemented by authorities and the private sector.’
Of significance, new policies have met MONEYVAL concerns outlined in 2019 related to the ‘ownership information accuracy of registered businesses and the pursuit of criminal tax and related ML cases’.
Online gambling was described as a sector in which the NRA had observed notable improvements with regards to due diligence, authorization of licenses, risk assessment, and screening of individuals.
Despite improvements, the NRA highlighted 18 low-to-high risk areas, in which Malta’s gambling and online gambling sectors could be exposed to ML and TF risks.
The NRA advised authorities to tighten monitoring of ‘complex ownership structures and networks’ in the gambling sector, which can be used to disguise illicit profits, posing a risk to Malta’s financial system.
Related concerns saw the NRA highlight ‘unlicensed entities’ and ‘smurf/mule accounts’ as money laundering risks that target the online gambling sector and facilitate the integration of illicit funds into the financial system.
Though Malta has tightened its compliance measures, the NRA underscored the need for heightened monitoring of suspicious transactions on licensed operators. Debit and credit card fraud remains the most common type of reported criminal activity targeting the sector.
The report highlighted the importance of verifying customers’ ‘source of funds’ as remote operators often report discrepancies when ‘corroborating evidence regarding players’ source of wealth or source of funds’ does not correspond to their profile.
Regarding ongoing vulnerabilities, the NRA underscored the need for improved financial flow analysis in the gambling sector – a necessity given that licensed operators serve an international client base and manage high-value transactions.
Citing improvements across all high-risk sectors, the NRA concluded that the government of Malta has addressed the 2019 concerns raised by the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), the European Banking Authority (EBA), the European Commission (EC), and the International Monetary Fund (IMF).
The government of Malta will continue to focus on developing a ‘sustainable, risk-based, proactive, responsive, and effective anti-money laundering and countering the funding for terrorism (AML/CFT) framework’.
