Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With over 24 years of real-world experience in iGaming Licensing and Payments, Regulatory Compliance, Tax-Efficient Corporate Structuring, Incubator and other Hedge Fund Licenses, Blockchain and Cryptocurrency related services, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.
In his new column for Yogonet, the iGaming industry consultant analyzes and delves into Malta Gaming Authority's recently announced new compliance protections and amendments to the gambling legal framework.
Malta, one of the world’s most popular online gambling licensing jurisdictions, has announced amendments to the gambling legal framework. It appears regulators are simultaneously stepping up compliance protections while recognizing the burden on operators.
So, what do the new rules encompass, and what do they mean for existing or potential licensees?
The Malta Gambling License
On 20 October 2021, the Malta Gaming Authority who is responsible for issuing licenses and supervising operators, published several amendments to gaming rules. These include the Gaming Authorisations and Compliance Directive and a new policy of Ongoing Competency Criteria for Key Persons.
In short, Key Function roles for license holders have been changed and somewhat streamlined. Operators offering to gamble to customers will now have to fill eight Key Functions: CEO, Key Gaming Operations Manager, Key Compliance Officer, Key Legal Officer, Key Data Protection Officer, Key AML/CFT Officer, Key Technology Officer, and Internal Audit Officer.
For B2B businesses, the number of roles has been reduced from nine to seven. These include the CEO, Key Gaming Operations Manager, Key Compliance Officer, Key Legal Officer, Key Data Protection Officer, Key Technology Officer, and Internal Audit Officer.
Some of the previous roles and responsibilities have been combined into one position, making it easier for businesses to fill them. Furthermore, the amendments lay down specific qualifications, experience, and ongoing professional development requirements to meet.
Previously, it was only required to meet particular “fit and proper” standards. Still, now Key Function holders will have to engage in ongoing development, including training, public speaking, and article writing.
There have also been changes to another area of the licensing process. Sports integrity suspicious betting previously only applied to B2Cs, but now also applies to B2B that offer sports betting supplies or services.
What does it mean for licensees?
It means that any new Key Function certifications must align with the new requirements. By the end of May 2022, existing Key Persons must apply with the MGA to receive approval under the new rules. Then, by the end of September, the MGA will either approve or reject the application. By December, the licensees must confirm who will fill the new roles. Final confirmation by the MGA will be given by the end of March 2023.
As for the professional development requirements, they must be adhered to by the second renewal of the Key Function Certificate, after the new policy comes into force.
Malta has been navigating troubled waters of late. Earlier this year, it was placed on the FATF grey list earlier this year following growing concerns over money laundering and financial crime. After two years of assessments and calls to improve the situation, the decision was taken. Malta will now have to work hard and demonstrate a continuing crackdown on perceived inefficiencies if it wants to move back to the whitelist. This will not happen overnight, so what impact is this having on its gambling industry?
Having built its economic backbone on online gambling, Malta is now in a difficult position. Some payment processors don’t want to work there anymore, and other companies and businesses have decided to look elsewhere for a European base. While the gambling license is still considered reputable, we have noted an influx of operators looking to get licensed in other jurisdictions.
These include mainly Kahnawake, Curacao, and the Isle of Man. Kahnawake, in particular, offers a sterling reputation coupled with a cost-efficient licensing process and zero gambling tax. It is a very popular license for both startup and established gambling companies.
Whether you are an existing Malta license holder or are looking for a jurisdiction for your gambling company, Fast Offshore can help. We are up to speed on the recent changes and can advise you on how to ensure compliance. Furthermore, we can take care of all your corporate services needs including incorporation, structuring, payments, and ongoing maintenance. Schedule a call with us today.