Malta Directs Ambitions Towards Becoming the Silicon Valley of Gambling: Interview with MGA Executive Chairman Joseph Cuschieri

Several news outlets, Casino News Daily included, covered recently a story involving a former Malta Gaming Authority employee accusing the regulator of violating its own licensure principles by issuing licenses to companies whose hardware had not been sealed. Malta has over the years made a name for itself as a favorite destination for online gambling operators and service providers to base their offices in. And the Malta Gaming Authority has made a name for itself as a preferred licensing authority. Licenses from the MGA give iGaming companies the opportunity to operate in multiple jurisdictions across Europe.

The MGA responded to media coverage on Friday, explaining why the sealing procedure had been deployed and why it had been discontinued and replaced with more innovative mechanisms. Its full statement can be read here.

Casino News Daily has reached out to Mr. Joseph Cuschieri, Executive Chairman of the Malta Gaming Authority, for additional details. Despite his busy schedule, Mr. Cuschieri kindly answered our questions about the sealing procedure and, more importantly, about the MGA’s expectations of what the future holds for Malta as a leading gambling destination and the upcoming regulatory changes that will further establish it as a major gambling hub.

+ Mr. Cuschieri, can you tell us whether sealing was in any way linked to MGA’s mechanisms for prevention of money laundering, terrorism financing, and other illicit financial flows?

Not at all. Sealing has absolutely nothing to do with money laundering, terrorism financing or illicit financial flows.

+ How is MGA monitoring its licensees for any such suspicious financial operations and how does it act in case suspicions of any of its licensees being involved in such illicit money flows are raised?

I cannot provide details on how we monitor and gather intelligence on operators licensed by the MGA for obvious reasons. However, in case of suspicious transactions, we report them to the Financial Intelligence Analysis Unit (FIAU) for further analysis and intelligence gathering. The FIAU will then report such suspicious transactions to the police if there are reasonable grounds to do so.

+ We’d also like to pay a bit more attention on Malta’s status as one of Europe’s major online gambling hub. Despite some previous forecasts, the iGaming industry in Malta did not slow its growth pace in 2016. Has the growth trend been maintained so far in 2017?

Yes. 2017 is going to be even better than 2016 according to our indications.  

+ Minsiter Emmanuel Mallia has previously said that 2017 will be a year of regulatory overhaul. Is the MGA involved in the reform process? In what direction do you expect Malta’s gambling regulations to be changed?

Yes. The MGA (in its advisory function to Government) has been driving the reform process in conjunction with the Minister. I expect that the new regulatory regime will give renewed impetus to the gaming industry in the sense that it will future proof our jurisdiction in terms of our eco-system attractiveness, jurisdictional profile, strengthening of our compliance and enforcement powers but also in consumer protection. Furthermore, it will simplify our licensing structure by introducing B2C and B2B licensing instead of our current class system. This will simplify compliance and administration for our licensees. It will also include technology neutral provisions to cater for innovation and technological development in the sector both current and future.   

+ Why do you think Malta needs a new gambling regulatory framework and why now?

Our current regime is more than 12 years old and has served us well. The sector has developed so much over the years hence the need for a new generation of legislation which caters for innovation, technological development, new forms of gaming but also new consumer protection measures.

+ When do you expect the new regulations to be introduced?

The fourth quarter of 2017.

+ How will the new laws change Malta’s gambling landscape?

The new legislation is expected to reposition Malta as the most reliable and innovative regulator globally – a role model for other jurisdictions.

+ The MGA has recently introduced a Skill Games licensure system for betting on eSports. The sector is gaining popularity in the US. How do you expect it to develop in Europe?

I expect that betting on e-sports and fantasy sports to grow substantially in Europe but I am not yet sure it will be as popular as in the US. This is probably due to the fact that in Europe players have more choice of gaming/gambling products while in the US, traditional gambling products are absent.

+ Aside from new regulations, what are the MGA’s objectives for this year and years to come? What else are you planning to do to maintain the operator- and provider-friendly environment?

•  Raise quality & standards across all gaming sectors – the “Silicon Valley” concept,
•  Raise the bar in the overall governance and supervision of the gaming sector,
•  Engage and build partnerships with other jurisdictions, key stakeholders and regulators,
•  Explore new growth areas including niche gaming sectors and innovations,
•  Enhance consumer protection mechanisms and empowerment.

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