On the 20th of October 2021, the Malta Gaming Authority (the “MGA”), published a series of amendments to the Gaming Authorisations and Compliance Directive (Directive 3 of 2018) (the “Directive”), in parallel with a new Policy on the Eligibility and Ongoing Competency Criteria for Key Persons (the “Eligibility Policy”).
This article shall briefly discuss the main changes brought about to Malta’s gaming regulatory framework due to Directive’s amendments and the MGA’s publication of the Eligibility Policy.
The main changes can be summed up into 7 key headings, namely:
Change 1: The Overall Number of Key Function (KF) Roles and their Underlying Responsibilities
With regards to remote/online gaming B2C licensees (“B2Cs”), the amendments to the Directive reduce the required number of KF roles that a B2C Licensee must hold from 15 such roles to 8. Such reduction was implemented by the MGA, by essentially merging certain KF roles which are inherently interlinked and which often, in practice, in any case used to be generally occupied by the same person. .
In terms of the amendments to the Directive, B2C Licensees are now required to hold the following 8 Key Functions:
In view of the above, while the roles of CEO, CLO, Key Privacy, MLRO and Internal Audit remained unchanged, other roles have been removed by essentially absorbing the same into a previously existing closely associated role.
More specifically, under the Directive’s updates, it can be observed that:
Similarly, for B2B Licensees, the required Key Function roles have been reduced from 9 to 7, by essentially:
Effectively, the Key Function roles now required by B2B Licensees are the following:
It should also be noted that other KF related changes have also been introduced by the amended Directive with regards to the National Lottery Licensee and B2Cs that operate gaming premises (both controlled and not controlled gaming premises).
Change 2: Sports Integrity
Previously, sports integrity suspicious betting reporting obligations applied only for B2Cs. In terms of the Directive’s amendments, such requirements will now also apply to B2Bs (critical gaming suppliers) that also offer sports betting supplies.
Further, it should be noted that the amendments designate Key Person sports integrity related responsibility to the Compliance Officer.
Change 3: Continuous Professional Development
In addition to a Key Person’s requirement to be deemed “fit and proper”, that is for the said person to be deemed to have the required integrity, honesty, reputation, competence and capability, the MGA also introduced continuous profession development (“CPD”) requirements.
Such CPD requirements consist in a number of hours of CPD which, as a minimum, a Key Person must fulfil.
An exhaustive list of methods applicable for the attainment of CPD requirements was also published by the MGA in the Eligibility Policy, which include professional educational activities (such as courses, in-house training, conferences, seminars and workshops), presentations (including vendor /system-specific presentations), teaching, lecturing and presenting, publication of articles and professional examinations.
Change 4: Key Function Compliance Deadlines
The Third Schedule of the Eligibility Policy clarifies the timeframes that must be adhered to with regards to Key Function’s changes, by both Key Function certificate holders and Licensees. Namely:
Change 5: Key Function Eligibility Requirements
The minimum experience and/or qualifications required for a person to occupy a Key Function role have also been enshrined within the Eligibility Policy.
The requirements to occupy the main Key Roles are set out below:
|Key Role||Minimum Experience and/or Qualifications|
|CEO||Minimum of 3 years working experience in a managerial role and a related bachelor’s degree or higher, or a minimum of 5 years working experience in a managerial role. Knowledgeable in terms of the Authorised Person’s business model, operations and organisational infrastructure. Knowledgeable in terms of the obligations of the Authorised Person in terms of general regulatory compliance|
|Operations||Minimum of 2 of working experience in a managerial role and a related bachelor’s degree or higher, or a minimum of 4 years working experience in a managerial role.Knowledgeable in terms of the Authorised Person’s payment, risk management and fraud prevention procedures.Knowledgeable in terms of the obligations of the Authorised Person in terms of general regulatory compliance.|
|Compliance||Minimum of 2 years working experience in a compliance-related role and a related bachelor’s degree or higher, or a minimum of 4 years working experience in a compliance-related role. Knowledgeable in terms of the obligations of the Authorised Person in terms of the Gaming Act including obligations relating to responsible gaming, advertising and, where applicable, sport integrity.Knowledgeable in terms of the Authorised Person’s business model, operations, systems, and procedures adopted by the Authorised Person to ensure regulatory compliance.|
|Legal||Minimum of 2 years working experience in the role of legal counsel and/or in a similar senior role and a bachelor’s degree in law or higher.Knowledgeable in terms of the Gaming Act.Knowledgeable in terms of the legal affairs of the Authorised Person, including those relating to contractual arrangements, litigation proceedings and dispute resolution.|
|Privacy||Minimum of 2 years working experience in the role of data protection lead or data protection officer and a related diploma or certificate, or 3 years working experience in the role of data protection lead or data protection officer.Knowledgeable in terms of the GDPR and the relevant local data protection legislation.Knowledgeable of the Authorised Person’s policies and procedures relating to data protection.|
|Prevention of Money Laundering and the Financing of Terrorism||Minimum of 2 years working experience as a money laundering reporting officer or similar senior and/or a related managerial role, and must be in possession of a related bachelor’s degree or money laundering specific qualification, or have 4 years working experience as a money laundering reporting officer or similar senior and/or related managerial role. Knowledgeable in terms of the rules relating to AML/CFT in terms of the Gaming Act and any other applicable binding instrument relating to AML/CFT.Knowledgeable in terms of the AML/CFT procedures of the Authorised Person.|
|Technology||Minimum of 2 years working experience in a role related to IT and a related bachelor’s degree or higher, or 4 years working experience in an IT-related role. Knowledgeable in terms of the Authorised Person’s technical set-up, systems and infrastructure|
|Internal Audit||Minimum of 2 years working experience as an internal auditor or a similar role and be in possession of the relevant certificate to perform the role of internal auditor or have 4 years of working experience as an internal auditor or similar role. The person must be knowledgeable in terms of the auditing requirements applicable to the Authorised Person.|
Change 6: Compatibility / Conflicting Roles
The MGA also published the Key Function roles that it considers to be incompatible, that is those roles which an individual will not be allowed to fulfil simultaneously, effectively consolidating previous MGA policy and practice into the Eligibility Policy.
A compatibility table/illustration was helpfully published by the MGA in the Eligibility Policy’s Fourth Schedule, which is being reproduced hereunder:
Change 7: Responsibility Absent of Duly Appointed Key Functions
The updates to the Directive also introduce a new article, namely article 5A, which sets out that without prejudice to the requirements for licensees to designate persons responsible for the carrying out of Key Functions as set out in the Directive, where no person is approved by the MGA to fully any required Key Function role, whether temporarily or otherwise, the responsibility for such Key Function shall vest on the directors of the Licensee.
Article written by Senior Associate Dr Terence Cassar with the support of Legal Trainee Mr Joseph John Galea.