The Malta Gaming Authority (MGA) has failed to follow its own principles in monitoring computer servers on which gambling websites reside, a former employee of the regulator told Reuters.
Valery Atanasov, a Bulgarian national, was dismissed from his role at the gambling authority in February 2015. While working at the MGA, then the Lotteries and Gaming Authority (LGA), Mr. Atanasov was responsible for “sealing” hardware used by Malta-based online gambling companies to provide their services through local servers.
Malta has turned into a favorite destination for iGaming operators and service providers to base their offices in. The Mediterranean island nation has been drawing gambling companies from all around Europe with its lower tax rates and licensing fees. So far, the MGA has issued around 500 iGaming licenses, with their holders providing their services all around Europe.
As mentioned above, a number of gambling companies have been using Maltese servers to provide online casino, poker, bingo, and sports betting services to EU-based players. As part of its anti-money laundering activities, the MGA sends its employees to attach special stickers onto computer servers used for iGaming operations. The stickers contain the servers’ ID numbers that match with the equipment gambling operators register with Malta’s gambling regulator.
The measure does not implement any internal modifications on the hardware but gives the MGA information about which computer a given operator is using for transactions. This makes it easier for the regulatory body to carry out the necessary checks in case of suspected money laundering activities or other illicit operations.
Every online gambling company must have its hardware sealed in order to be able to obtain a license from the MGA.
Mr. Atanasov provided Reuters with three separate email exchanges between representatives of three gambling companies and MGA employees, indicating that there had been breaches in the sealing procedure.
In one such email exchange, dating back from 2012, Robert Zammit, a consultant for iGaming operator Betsson, notified that gambling servers used in the company’s Maltese offices had not been put seals on for years. Originally a Swedish company, Betsson started operating from Malta in 2008. Mr. Zammit said in emails to the MGA that there were computers that had not been sealed at all. Yet, the consultant requested sealing as part of Betsson’s application for a new five-year license.
In a separate exchange from 2013, Mr Green Director Angelo Dalli informed the then LGA that they still had unsealed equipment.
Mr. Atanasov, the former LGA employee, told Reuters that under MGA’s licensing rules, a company that wants to provide iGaming services from Malta needs to submit a complete and accurate diagram of its computer network to the local gambling regulator. Hardware is then checked by employees whether it is placed as shown in the diagram. If there are no discrepancies, seals are placed. Any instances of stickers being broken for one reason or another must be reported to the MGA.
Mr. Atanasov explained that he himself had refused to put stickers on pieces of equipment that had not matched what had been featured on the diagram submitted with the MGA. Gambling operator iGame, part of the Kindred Group, recently rebranded from Unibet, had been among the companies the former MGA employee had spotted discrepancies between the actual servers and what had been presented in the MGA diagram.
His refusal to seal unmatching servers cost Mr. Atanasov his job at the gambling regulator. After operators filed multiple complaints against him, he faced disciplinary procedures in 2013 and was dismissed in early 2015 for insubordination. According to a document issued as part of the probe into his activities at the regulator, Mr. Atanasov was only required to seal computer servers and it was not his responsibility to evaluate whether a piece of equipment should be tagged or not.
The document further noted that the lack of seal meant that operators could not operate in a legal manner as that breached the terms of their license from the MGA.
Mr. Atanasov accused the Maltese gambling regulator of lax supervision, arguing that poor monitoring created environment for fraud, money laundering, and other suspicious activities.
Asked about his comments on the matter, Joseph Cuschieri, Chairman of the MGA, told Reuters that sealing was not the only procedure deployed by the regulatory body in relation to money laundering prevention and that other much more comprehensive mechanisms had always been in place.
