Junior minister for financial services of Malta, Silvio Schembri recently downplayed the concerns of UKGC CEO over compliance issues related to local companies.

Are UKGC concerns valid?

Neil McArthur, CEO of the UK Gambling Commission (UKGC) recently spoke about local companies violating laws. He suggested at the ARQ Conference in Malta that companies may not be following standard compliance practices. He even pointed out that Maltese businesses were the most common offenders in the UKGC’s database and asked the local regulators to pay attention to these problems.

Schembri praised the work done by the Malta Gaming Authority (MGA) and said that local politicians are obliged to help the regulators. He said that they must provide all the tools necessary for the MGA to do its job and carry out oversight and monitoring of the space. They work on enhancing all legislation applicable to facilitate the regulator’s job. He said that politicians are committed to fulfilling these obligations in the future as well.

Where do Maltese companies falter?

According to McArthur, Malta-based gaming firms hold over 30% of the total gambling revenue of the British market. He said that 24 out of 45 firms that were asked to submit action plans to improve compliance in the UK market were of Maltese origin. The figure signals that companies based in Malta do not respect UK laws and policies.

The British regulator also forced seven gambling firms to pay enormous penalties worth £18 million in 2018, five of which were Maltese. These firms are facing increasing scrutiny and criticism from several European Union regulators. The EU regulators unanimously demonstrate how Maltese firms lack compliance.

Sweden is one such country that is going after gambling law violators, many of which are based in Malta. Some of the companies were forced to lay-off employees and work on special restructuring plans to handle the regulatory clampdown. The problems with Maltese operators don’t end at compliance. There is a significant concern about money laundering and other illicit financial activities as well.

The minister’s stand on the local operators despite damning evidence from European regulators isn’t surprising. The MGA recently defended its position, claiming that it has increased its regulation in recent times. It also released a guideline for local operators to handle Britain’s exit from the EU, explaining how companies registered or domiciled in the country can navigate the situation and continue providing their services to the users.