Q&A: Malta Gaming Authority explains regulatory overhaul

It’s not been the easiest of years for the Malta Gaming Authority (MGA) after the Southern European island was caught up in a mafia-related gambling scandal.

In July the regulator suspended the licences of two companies with alleged links to a gambling ring run by the notorious Calabrian mafia organisation ‘Ndrangheta. Six Italian nationals in Malta were also arrested by the authorities.

In the wake of such alleged illegal ctivity on the island the MGA was forced to defend its record. The minister of finance Edward Scicluna said at the time he would seek a review of the regulator’s due diligence process for licensees. However, the MGA insisted its compliance and pre-licensing checks were some of the most rigorous and stringent of any egaming jurisdiction.

In its 2014 annual report the regulator had already announced plans to unveil a number of reforms and legislative amendments to ensure regulatory best practice, a process it said would likely be fast-tracked due to recent events.

With this in mind, the regulator last week debuted its ‘fit and proper’ guidelines, a new set of proposals outlining the minimum criteria required of all persons and entities involved in egaming activities regulated by the MGA.

eGaming Review spoke with the regulator’s chief officer – legal and international affairs Edwin Licari, to discuss the thinking behind these new guidelines and to find out what the Authority has planned next.

eGaming Review (eGR): Why did the MGA decide to launch its ‘fit and proper guidelines’?

Edwina Licari (EL): The MGA has embarked on an intensive transformation process with Mr Cuschieri at the helm of the organisation over the past two years. His style of execution gives primary focus on transparency, integrity and fairness particularly in the Authority’s decision making processes. These guidelines, with more to follow, all form part of the Authority’s strategic plan and coincide also with an internal organisational restructuring all aimed towards attaining focus and the Authority’s goals. We believe that offering transparency and certainty with the relevant stakeholders and the public at large will lead us closer to achieve the desired optimum level of regulatory efficacy.

eGR: What are some of the most important aspects to these guidelines?

EL: The fundamental pillars underpinning these guidelines relate to: honesty, integrity and repute, competence and capability and financial soundness of an applicant or licensee. I believe that the latter criteria are all relevant for any due assessment, however ultimately it’s always about assessing the facts on a case by case basis and within risk based parameters that would influence the decision making process.

We believe that by giving recognition to the roles attributed to key individuals within the applicant or licensed entity, referred to as ‘responsible persons’ within these guidelines, we are adding value to the licence and extenuating the importance of the obligations and compliance requirements that need to be met. Ultimately the onus is on the applicant/licensee to ensure he is well equipped and has chosen the right persons on board from start to end to meet his compliance obligations at law.

eGR: Are you aiming to learn from other egaming jurisdictions?

EL: Regulatory and monitoring tools must be sharpened and, or modified or even totally replaced to ensure effectiveness in the business model and jurisdictional context in which they are applied. This is a dynamic industry and risks and processes are evolving continuously and we cannot afford to fall back. We are also taking note of relevant regulatory performance of the subject person in another jurisdiction, which within the spirit of collaboration and to attain the desired alignment with our fellow regulators overseas, could also have a bearing on one’s fit and proper standing particularly in the light of certain shortfalls or regulatory breaches resulting thereto.

eGR: What does the MGA have planned next as part of its regulatory overhaul?

EL: Whilst it is still premature to comment at this stage and given that we would still have to go through a legislative process involving the relevant stakeholders, primarily the Government of Malta and the Parliamentary Institution, we may say that the intention behind this upcoming legislative framework is to streamline and address any gaps between the law and technological advancements with the motive of having more agility. The intention is to widen the scope and powers of the Primary Act and the Authority’s functions under one piece of legislation and under the auspices of one competent Ministry as required.

We would like to depart from certain restrictions and current standards which based on evidence prove to be obsolete and contrary to the objective to be attained, within risk based parameters, to back up any warranted shift in approach. We will also be issuing certain transitory measures to facilitate any upcoming changes within the upcoming legislative overhaul for our licensees within the coming months.