National Risk Assessment: Malta Lowers Money Laundering Risk in iGaming

Malta’s iGaming industry saw a reduction in its money laundering risk level, dropping from “High” in 2018 to “Medium” in the 2023 National Risk Assessment (NRA). However, the comprehensive study by experts from CasinoTop.co.nz still highlights persistent risks and suspicious transactions as significant concerns. This underscores the continued importance of maintaining vigilant oversight and strong controls within Malta’s influential gaming sector.

The 2023 National Risk Assessment (NRA), compiled by Malta’s NCC with private sector input, aims to guide iGaming companies and stakeholders in updating their compliance procedures. This will help them better detect and mitigate identified crime risks going forward.

Key Numbers:

• 300+ licensed B2C remote gaming operators.
• 12% iGaming contribution to Malta’s GDP.
• 2018-2021: Significant rise in gaming-related STRs.
• June 2022: Malta removed from FATF “Grey List.”

The lowered risk rating represents a general improvement. However, it belies an undeniably complex situation for Maltese iGaming. Suspicious transaction reports (STRs) related to gaming surged over 2018-2021. The reports primarily concerned foreign customers. These customers had no connections to the island beyond their gambling account.

Prepaid cards, virtual assets, and unregulated operators were all suggested as potential threats for money laundering. The most severe danger is organized crime groups infiltrating licensed gaming businesses. This happened in 2015. An influential Italian mafia network was found to control several Malta-licensed iGaming companies.

Global Relevance of Malta’s Gaming Sector Risk Level

The assessed crime risk level facing Malta’s massive iGaming sector holds major weight on the international stage. This small island jurisdiction generates around 12% of national GDP. It boasts over 300 licensed business-to-consumer (B2C) remote gaming operators and has become a hub for the vibrant industry.

In June 2021, the Financial Action Task Force (FATF) – the global AML/Counter-Terrorist Financing (CTF) watchdog – added Malta to its “grey list” of jurisdictions with strategic deficiencies. Among the cited factors were identified weaknesses in local gaming controls.

Maltese authorities have dedicated immense resources to enhancing gaming-related regulations and prosecutorial capabilities. They demonstrated an impressive commitment to aligning with international FATF standards. In June 2022, the FATF formally responded by removing the country from its increased monitoring list.

Yet Continued Efforts Needed as Threats Persist

The reduced risk rating in Malta’s NRA signals key progress. However, the brutal reality is that organized crime groups and fraudulent players worldwide continue seeking ways to penetrate gaming channels for money laundering and other financial crimes.

Indeed, a number of common typologies exist. These include using agents and forged identity documentation. This disguises illicit funds as legitimate gambling winnings. Criminals often want to directly own gaming companies and integrate black-market cash.

The NRA report reminds iGaming operators that maintaining robust controls across their organizations is essential. This includes closely monitoring patron activity. We use behavioral analysis tools to detect suspicious transactions that may indicate money laundering, fraud, or other financial crimes.

Maltese-licensed operators are popular internationally. Ongoing public-private cooperation is vital to keep up with persistent fraud and money laundering threats. This cooperation is important both locally and across borders. It is from organised networks.

The risk level reduction is positive for Malta’s iGaming jurisdiction. However, regulators globally urge persistent vigilance from officials and companies. They should guard against evolving criminal threats seeking entry through this vibrant sector. STRs surged after the 2015 mafia incident. It’s clear that we must keep working to protect integrity.

The 2023 NRA provides a detailed roadmap of inherent risks for gaming entities to review and address. However, Malta and all other jurisdictions that profit from the public playing should remember that syndicates continuously look for new weaknesses. Constant awareness of this is crucial.

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