How will the FATF vote affect Malta’s iGaming industry?
As the Financial Action Task Force (FATF) is expected to put Malta’s financial fate to the vote tomorrow, readers have reached out to ask why the evaluation is important to the iGaming industry. Here’s what we know so far.
1. Staying off the grey list may depend on Malta accepting the EU definition of illegal sports-betting.
Various sources have voiced concerns that, in order to be granted a favourable evaluation, Malta may have to withdraw its veto of the EU sports betting definition. MaltaToday quoted unnamed government sources as saying that Malta may need to ‘bow its head and get on with it’.
In simple terms, Malta is opposing a definition in the Macolin Convention which renders illegal ‘any sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located”.
The rationale behind Malta’s opposition is that the definition goes beyond the remit of match-fixing in sports, which is the scope behind the convention.
2. Accepting this definition of sports-betting may considerably reduce the remit of an MGA license.
One of the main reasons an MGA license is strongly coveted by operators is precisely because it creates a secure and regulated legal framework within which to operate, irrespective of the legislation of the player’s country. This creates industry stability and offers a safety net for licensed operators, rather than leaving them to the whim of a third country.
The new definition would remove this safety net and lead to uncertainty and sudden shifts within markets.
3. White markets may suddenly turn black.
To offer one example, Chile is still in the process of legalising online gambling. Yet, Chileans can still safely enjoy a spot of online gambling at an online casino operating under a third country license, such as an MGA license, while having their rights and well-being protected.
Should the Macolin Convention in its present format become part of Maltese law, operators with an MGA license will no longer be able to offer their services to Chilean players.
4. Most of the points that Malta had been asked to address in order to keep it off the grey list have since then been addressed.
Minister Finance Minister Clyde Caruana has gone on record as saying he believed there is no reason for Malta not to be successful, barring any politically motivated moves from within certain EU factions. In fact, Malta has been actively working hard to address the nine key points that had been a bone of contention and had led to the island failing the MoneyVal test two years ago, with the private sector needing to adapt to new, more stringent policies very fast.
5. Excessively tight gambling regulations may very well lead to an increase in black market gambling.
Ironically, this is exactly what the Macolin Convention seeks to avoid. However, if countries like Malta are forced to accept the illegal sports betting definition as a condition to being kept off the EU list of undesirable jurisdictions, many fear that players will have no choice but to turn to unlicensed operators.
This is because they will no longer enjoy access to operators whose license is not recognised in their country of residence.
Meantime, a formal position is likely to be announced tomorrow during the plenary meeting of the FATF when both the level of technical compliance and the effectiveness reached by Malta will be considered.
SiGMA Americas Virtual:
The SiGMA Americas Virtual show will run from the 13th to the 14th of September, 2021. Features include a fully interactive expo floor, networking chat rooms, and a high-profile lineup of panelists. Beautifully designed booths come equipped with state-o-the-art product displays and chatbox features, while attendees can visit the virtual stage, where a series of panels and keynotes will discuss key topics during the live 2-day conference.
Explore the agenda or check out who’s on the floor plan.
