A major development in the European financial space this year, which had a significant impact on the gaming industry in the Mediterranean region, was the greylisting of Malta.
Carried out by the Financial Action Task Force (FATF), the greylisting has affected the reputation of the Maltese financial sector – which plays a huge role in the island territory’s economy – and the impacts of these have been felt immediately, according to a panel speaking in a recent SBC Webinar entitled ‘Grey Listed – Protecting Maltas Gaming Reputation’.
Sharing his views with Joe Streeter, Editor of Payment Expert, Enrico Bradamente, CEO, Maverick Slots, explained that the complexity of the greylisting has delayed cash flows between companies, and the categorisation of companies and individuals based in Malta as ‘high risk’ has adversely affected its financial reputation.
Describing the FATF’s three major points of concern relating to Malta’s financial situation as ‘very extraneous to the gaming industry, Yanica Sant of the General Counsel, Malta Gaming Authority (MGA), agreed with her panelists assessments.
“What that means is that the manner in which the gaming industry is regulated and the law and the compliance is not being questioned, and is not being placed under any scrutiny.
“However there are direct effects and we expected there to be repercussions to businesses like the gaming industry, and it is not unexpected. We understand the inconvenience and the worry that comes with such a direct effect, and that is why every institution in Malta – and we are one of them – have a plan that is being set in motion in order to get out of this greylist.
“We need to remember that what the greylist actually is that the jurisdiction is being placed under increased monitoring, and that makes it a reputational issue because there is no word worse than ‘greylist’.
“What we need to do is address reputation, specifically because there are no points relating to the matter in which the gaming industry is regulated in Malta. Our plan is to work on our reputation and ease the problems.”
Meanwhile, James Scicluna, Co-Managing Partner, WH Partners, remarked that the greylisting could affect the pre-existing relationships between international financial institutions and companies registered in Malta.
The immediate due diligence required by international banks on customers with ‘any connection to Malta’, he added, has already changed the dynamic between the two.
“It comes with a high compliance cost, and cuts across the board – it is not just related to gambling,” he said. “WIth the greylisting it has become worse because in the sense that those financial institutions which have not yet put Malta on their high risk list are doing so as we speak.
“I think a very important measure of how bad it might get is whether or not amongst these financial institutions there are one or more, or many, that might consider that it is not worth maintaining these relationships with persons who have a Maltese connection.”
He did, however, acknowledge that this trend has not yet occurred – to his knowledge – to any Maltese gambling incumbents, adding that any predictions concerning the termination of relationships between financial institutions and operators were ‘purely speculative’.
