In 2023, the National Risk Assessment (NRA) cast its vigilant eye on Malta, scrutinizing the levels of money laundering and terrorist financing risk within the nation.
In an unprecedented move, this year’s edition of the NRA also took into account proliferation financing and targeted financial sanctions.
Collaborating closely with the National Coordinating Committee on Combatting Money Laundering and Funding of Terrorism (NCC) and government authorities, the NRA established a comprehensive evaluation.
The NRA employs a three-fold classification system encompassing impact, likelihood, and threat level to categorize threats.
It identifies the use of virtual financial assets, cash, and prepaid cards as payment methods as integral components of the money laundering threat in Malta.
For both remote gaming and land-based gaming, the NRA identifies the overall residual risks for money laundering as ‘medium’.
Nevertheless, it commends the effectiveness of mitigating measures in both sectors, rating it as ‘high’.
However, the NRA also emphasizes the alarming concern regarding customer-related vulnerabilities, particularly within the remote gaming industry. This pertains to customers bearing a heightened money laundering or terrorist financing risk.
The report sounds the alarm by assigning the highest possible ratings across the board for customer-related vulnerabilities in remote gaming – ‘severe’ impact, ‘very high’ exposure, and a ‘high’ vulnerability level.
It underscores the ‘severe’ impact of licensed operators being under criminal control, with the likelihood rated as ‘possible’ and the threat level deemed ‘medium-high’.
In the context of land-based gaming, the report highlights the significant role played by cash as a conduit for money laundering.
It labels the impact of funneling criminal proceeds through cash payment methods as ‘significant’ and the likelihood of occurrence as ‘likely’, with a ‘medium-high’ threat level.
However, it cautiously assigns a ‘low’ risk rating to land-based bingo halls and national lotteries.
To combat money laundering effectively, the NRA report lays out a series of recommendations tailored to each sector.
It advises both remote gaming and land-based gaming to enhance their risk-based approach by periodically updating customer risk profiles.
Additionally, both sectors should continue to maintain risk-based customer due diligence procedures and closely monitor their transaction monitoring systems for the early detection of emerging risks.
The release of the NRA report follows a tumultuous period for the Malta Gaming Authority (MGA).
On January 18th, the regulator made the consequential decision to cancel five licenses, marking the third such occurrence in a single week.
The affected operators, namely Super7Plus, Winners Malta Operations, Genesis Global, Rush Gaming, and Betago Limited, all found themselves subject to the MGA’s stringent actions.