MGA updates requirements for ‘key functions’ positions, integrity and auditing

The Malta Gaming Authority (MGA) has made substantial changes to its key functions requirements by updating standards for licence applications, resignations, appointments and player accounts, among other areas.

Having come into force on 20 October, the update means that new licence applicants must inform the authority of the identity of persons at the company who hold the role of CEO, compliance executive and AML executive, at the time of the application.

Upon completion of this function, applicants will have six months after the licence is granted to name the remainder of their ‘key function holder’ team members.

Should a key function executive resign, licence holders have three days to inform the MGA of developments and 15 working days after the resignation to appraise the MGA regarding the appointment of a replacement. The latter change replaces the initial rule stating that licensees should inform the MGA within three days of a new appointment being made.

Furthermore, the candidate eligibility requirements for key function personnel have also been clarified, with the position of CEO requiring three years experience in a managerial role and a related bachelor’s degree or higher, or five years ‘practical working experience’ in a similar role.

In addition, compliance executives must have two years experience in a similar position, or four years if they do not hold a bachelor’s degree or higher qualification. Internal auditors also require two years experience, or four years if they do not hold a relevant certification for the position.

The updates also relate to suspicious betting and auditing checks, with operators offering ‘critical gaming supply’ now held to the same standard as B2C providers, in having to report any suspicious betting on sporting events to the authority, including if one or more bets have to be voided as a result of manipulation concerns.

Additionally, licenced operators must now clarify with the authority that audited financial statements due 180 days after the conclusion of a firm’s financial year contain ‘reasonable assurance’ from an auditor that the licensee is compliant with the jurisdictional Gaming Tax Regulations and Gaming Licensee Fees Regulations.

Meanwhile, B2C operators now have to comply with a new rule stipulating that the above requirement should be accompanied by a signed declaration from auditors stating that player funds, applicable jackpot funds and a portion of the Player Funds Account balance fall under the terms of the Maltese licence.

Both decorations are to be submitted to the authority in the form of ‘separate letters of comfort’, which should be distinct from the ‘auditor’s report submitted in terms of international reporting standards’.

Lastly, with regards to player accounts, the new requirements outline that operators must prove to the MGA that they are capable of verifying that each player account and any subsequent activity is recorded correctly across all player accounts.

The update follows the announcement last week that the MGA is launching a consultation on its Revised Audit Service Provider Guidelines, in which betting operators, service providers and additional industry stakeholders have been invited to provide feedback.

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