MGA Calls for Industry Input on Updated Player Protection Rules

On September 30, the Malta Gaming Authority (MGA) announced the launch of a closed consultation period with its licensees for the proposed changes to the Player Protection Directive 2 of 2018. Given that this is a closed consultation, only MGA licensees can respond, and they have till October 14, 2022, to give feedback on the proposed amendments.

The primary aim of this feedback period is to help the regulator reinforce and clarify the current player protection framework that will better serve the burgeoning industry. Additionally, MGA stated that the exercise would provide guidance as it strives to improve responsible gambling even as they publish detailed player protection guidelines. A statement released by the Malta Gaming Authority read in part:

Quote

“The amendments are being proposed on the basis of a review of the key sections of the Player Protection Directive carried out by an expert in the field and on the basis of our own research and experience garnered through the Responsible Gaming Unit’s audits and familiarization visits.”

More Penalties and Warnings Issued by MGA in 2021

Mid-last month, the MGA released its annual report and financial statements for 2021. According to the publication, the regulator canceled only seven licenses for the said financial year and did not issue license suspensions. The figures were a significant improvement compared to 12 cancellations and three license suspensions the gaming watchdog handed in 2020. As for 2019, the gaming oversight body canceled 14 licenses and issued 11 license suspensions.

This annual report also revealed that MGA issued more administrative penalties, whereas the number of warnings operators received slightly reduced. In 2021, the gaming ombudsman gave 31 penalties, a slight increase from 28 instances in 2020, which was also higher than the 24 issued in 2019. On the other hand, last year, there was a drop in 64 warnings issued, compared to 70 warnings in 2020, but drastically higher than in 2019 with only 20.

Upon publishing the report on September 15th, MGA CEO Carl Brincat noted:

Quote

“It is a priority for us to move towards leaner and more efficient processes, to remove unnecessary bureaucracy which introduces burdens on the industry without providing added value, and to become more effective in achieving our regulatory priorities.”

Research-Driven Approach to Boost Player Safety

With the increased penalties in mind, one of the critical points that MGA and its licensees will discuss will be the legal gambling operators’ responsibilities regarding safer gambling practices and protocols. Accordingly, the gaming watchdog has proposed the introduction of five markers of harm that its licensees will use when determining measures and processes to help them identify and tackle problem gambling.

The gaming regulator also disclosed that it is conducting thorough research and gathering expert experience to lay a rock-solid foundation for the eventual update of the Directive. During the Safer Gambling Week in Cyprus, Brando Debattista, the Head of Legal Affairs, discussed the planned changes in a press release saying in part:

Quote

“The proposed amendments to the Player Protection Directive are the product of extensive work carried out by the MGA’s RG team, particularly familiarization visits and ongoing consultations with the industry.”

Besides offering comments to the propositions, MGA also reminded its licensees to submit the agreed-upon procedures report outlining protocols for holding bettors’ deposits and potential winnings. Per regulatory requirements, licensees are allowed 180 days from the end of their financial year to submit the declarations. That said, the first round of licensee declarations was to be submitted by June 30, but the regulator allowed them to submit by October 31. The extension will give practitioners and their licensees ample time to adjust to the new requirements.

Further, the MGA announced that the proposed amendments are founded on a professional analysis of the sections of the Player Protection Directive. The watchdog added that the suggested regulatory changes are a direct result of meticulous research, familiarization visits, audits by its Responsible Gaming Unit, and advice from an industry expert.

Malta’s gaming oversight body also mentioned that it had published additional rules relating to staff training and real-money reinforcement, which locally licensed online gaming businesses may review.

MGA’s proposed revisions will be published for review on its website in a closed consultation section that only licenses can access. Furthermore, any industry experts who would like to offer feedback or ask more questions have been requested to reach out to the regulator’s policy division via contacts listed on MGA’s official website.

Malta Finally Out of the Woods

The proposed Directive changes come after Malta was placed on the Financial Action Task Force (FATF) greylist in 2021. This happened because some of the EU member states raised the alarm over the island country’s tax evasion practices and lack of regulatory oversight.

Thankfully, in June, FATF removed Malta from the greylist and is now on an on-site review after FATF recognized that Malta had implemented the AML action plan. Part of the approach that got Malta out of trouble was increasing the usage of its laser-focused Financial Intelligence Unit (FIU) to track criminal tax and money laundering cases.