In an effort to prevent money laundering in Malta, the Gaming Authority of Malta is working closely with the Malta Financial Services Authority. The gaming industry has been a popular spot for launderers because it’s not as regulated and offers anonymity that other industries don’t. In order to combat this, new regulatory frameworks have been put into place to help prevent money laundering in the gaming industry. This includes stricter rules on customer identification and verification, as well as enhanced due diligence measures for gaming companies.
Especially due to the recent effects of Malta failing the Moneyval test for compliance with the EU’s Anti-Money Laundering Directive, Maltese authorities and financial service providers want to be able to prove that they are doing their part in preventing money laundering. However, most of the credit for this goes to local gaming companies who have been developing anti-laundering strategies for years now.
What is money laundering and why is it a problem specifically in Malta
Money laundering is the act of making illegally-gained money look like it came from a legitimate source. This allows criminals to spend large sums of money without being caught for crimes they have committed.
Malta’s gaming industry has always been under more scrutiny than other industries, but especially with the recent Moneyval report, Maltese authorities want to be able to show that they are actively working to prevent money laundering.
Due to Malta’s geographical location and the anonymous transactions of the gaming industry, it is a common spot for money launderers to use as a way point for their dirty money. Money laundering in this sense is not seen as a problem with the gaming industry itself, but rather that it is used for an illegal process.
How money laundering happens through Malta gaming companies
Money launderers take advantage of online casinos and sports betting sites because they are not as tightly regulated like other large revenue generating industries. These Malta Igaming companies also often operate outside of normal banking hours unlike traditional businesses, making them even easier to use for money laundering.
Many of these sites accept cash or bitcoins as a way to get money into and out of the site, making it easy to hide the source of their funds. For example, someone who lives in Malta but is suspected of being involved with illegal activities in Russia could easily send large amounts of cash to an online gaming company via bitcoin and then deposit the funds into their account. The person can then play games with those funds, making it harder to trace where the money actually came from since it is completely anonymous and untraceable once it’s in the online casino’s account.
Once the money gets played through once, it can then be withdrawn to clean money that is then deposited into a bank where it can be used to buy goods or services. This laundered money then gets spent in the local economy and makes it appear as if it came from a legitimate source.
New measures put in place to help Malta Gambling companies
In order to help Malta prevent money laundering, new regulatory framework is being put in place as per the EU’s 2015 AMLD. These new rules include stricter customer identification and verification as well as enhanced due diligence measures for Malta gaming companies.
The Malta Gaming Authority (MGA) is now requiring companies to use the same Know Your Customer (KYC) and Anti-Money Laundering (AML) standards used by banks. This means that customer identification must be done through a verified identity document, such as a passport or a driver’s license. It also means that more thorough customer vetting must be done for all of their employees.
In addition to the KYC and AML standards, these gaming companies are also required to comply with a third set of standards known as the 28th AMLD which includes enhanced due diligence measures such as surveillance and record keeping. These new measures require that they install specific programs that will help them identify and report any suspicious activities or transactions.
In addition to the requirements of Malta’s gaming authority, the Malta Financial Services Authority (MFSA) is also requiring a higher minimum capital requirement for Malta online casinos and sports betting sites as well as imposing stricter rules on financial reporting. By improving these measures, it becomes more difficult for money laundering to happen in Malta, ultimately making the country a safer place for its citizens
Some gaming companies already received heavy fines
In addition to the stricter standards being put in place, a number of Malta online gaming companies have been fined for their roles in money laundering schemes. One example of this was when the MGA fined an online gaming company for failing to take proper KYC measures in order to identify their customers. This resulted in them being fined € 2,000.
Another example of a Malta gaming company receiving heavy fines was in 2015 when The MGA held that an internet sports betting site had breached several provisions, including failing to implement proper customer identification procedures for non-EU players. While the initial fine imposed was €10,000, this was then increased to €35,000 after further investigation into the company’s records showed that they did not properly record transactions and were therefore in violation of reporting requirements.
Just recently a company was fined €387, 000 for its role in money laundering after it failed to implement proper KYC standards. This resulted in the company’s transactions being used for illegal activities and led to them receiving one of the highest fines ever imposed on a Malta based online gaming company.
How the Malta grey listing affected the gaming industry
There have also been some changes to the online gaming industry due to the grey listing process. The main change that has affected Malta is that it will be illegal for anyone in European countries other than Malta to open an account with a Maltese regulated company without first being sent a request for confirmation of identity.
The MGA’s role in fighting money laundering
The Gaming Authority of Malta (MGA) is responsible for regulating all forms of gambling activity in the country. This includes both offline and online gaming providers. They are also responsible for ensuring that casinos, bingo halls and other similar establishments have a license to operate within their borders.
Increased scrutiny from Europe
Malta has been under increased scrutiny from the European Union as a result of concerns about its ability to deal with money laundering and the financing of terrorism. This resulted in them being placed on a grey list by European Union (EU) countries, meaning that they were required to put into place stricter measures for preventing these crimes.
How has this affected local Malta based gaming companies?
Since this list came out, the MGA has been working with the Malta Financial Services Authority (MFSA) to ensure that online gambling companies are regulated properly. This means that they have created a number of new measures for customer verification and due diligence. They are also requiring these gaming companies to have stricter rules on suspicious transactions as well as financial reporting .
However, the MGA has stated that companies should not see these changes as hindering their ability to conduct business through Malta. They are looking at these rules as an overall positive for Malta and its economic growth. This is because by taking action against money laundering, it makes it much more difficult for individuals who want to use websites like online casinos and sports betting sites for illegal purposes.
These changes also mean Malta will be able to avoid the blacklist and work on ensuring that more countries are comfortable with their ability to handle these issues responsibly.
A summary of money laundering and its effects on the Malta gaming industry
Malta has been under increased scrutiny from Europe as a result of concerns about its ability to deal with money laundering and the financing of terrorism. This resulted in them being placed on a grey list by European Union (EU) countries, meaning that they were required to put into place stricter measures for preventing these crimes.
Since the grey listing came out, the MGA has been working with the Malta Financial Services Authority (MFSA) to ensure that online gambling companies are regulated properly. This means that they have created a number of new measures for customer verification and due diligence. They are also requiring these gaming companies to have stricter rules on suspicious transactions as well as financial reporting.
All of these things will hopefully avoid a black listing of Malta, and get them back in the green as soon as possible.