Malta Lowers Money Laundering Risk for iGaming – Impact on Online Gambling

A Positive Shift: Malta Reduces Money Laundering Risk in iGaming

Malta, known as a hub for online gambling, has made a significant change in its latest National Risk Assessment regarding money laundering threats. The island nation has decided to lower the money laundering risk level for iGaming, a move that could have far-reaching implications for the industry.

Understanding the National Risk Assessment 2023

The National Risk Assessment 2023 is a comprehensive document compiled by Malta’s government to evaluate money laundering threats across various sectors. In this latest assessment, a notable adjustment has been made specifically in the realm of remote gaming. The report has reevaluated the risk level associated with iGaming, reducing it from ‘High’ to ‘Medium.’

A Complex Narrative: Behind the Risk Level Reduction

While the headline risk level reduction may suggest a straightforward improvement, the report reveals a more intricate story. The key findings include a significant increase in suspicious transaction reports (STRs) related to online gaming between 2018 and 2021. Notably, these reports often involved foreign nationals with limited connections to the island.

Identifying Threats in iGaming

The report highlights several threats within the iGaming sector, including the use of prepaid cards for gambling, the utilization of virtual financial assets for payments, and activities conducted by unlicensed groups. It also raises the possibility of organized crime groups gaining control of licensed gaming businesses—a scenario that has occurred in the past, with Italian mafia connections.

The FATF’s Involvement and Malta’s Commitment

Malta’s approach to money laundering came under international scrutiny when it was added to the Financial Action Task Force’s (FATF) “grey list” in June 2021 due to “strategic deficiencies” in its anti-money laundering (AML) and counter-terrorist financing (CTF) regime. This inclusion had repercussions, including increased business compliance costs and challenges in accessing international finance.

Malta’s status as a global iGaming hub played a role in these assessments, with previous evaluations noting vulnerabilities in its remote gaming sector.

A Positive Turnaround: Malta’s Removal from the FATF Grey List

In response to its inclusion on the FATF’s “grey list,” Malta made a high-level political commitment to collaborate with both the FATF and the EU’s MONEYVAL to enhance its AML and CTF policies. This concerted effort bore fruit when Malta was removed from the list in June 2022, following progress in strengthening its anti-money laundering controls.

Malta’s decision to reduce money laundering risks in iGaming demonstrates its commitment to addressing vulnerabilities in the sector and aligning with international AML standards. This development is poised to impact the online gambling industry and its stakeholders significantly.