Antonello Cuschieri, MLRO and Managing Director at Greentube Malta, discusses anti-money laundering within gaming.
In 2017, the Fourth Anti-Money Laundering Directive (AMLD), possibly the most impactful directive within the sector so far, was implemented across EU states, introducing new requirements for the gambling industry and other sectors around customer screening to keep money laundering and terrorist financing out of businesses.
Since then, the awareness and perception around this very important area of compliance has risen within the industry, even through subsequent AML directives, but it has also increased the due diligence burden for both operators and consumers.
As regulation is tightening around the industry in several markets, operators must be ahead of the game to survive; and it’s an obligation of all stakeholders to safeguard the sector, and ensure we go above and beyond to be compliant.
For businesses, the challenge lies in balancing regulatory demands and commercial needs. To do so, the right compliance culture needs to be established as fostering a level of understanding makes conversations so much easier. The necessity of being compliant is clear to everyone, but a knowledge of the barriers and obligations that AML and other regulatory topics create is needed; to be able to juggle between the two extreme and conflicting aspects that are compliance and commercial.
Collaboration is an area of improvement when it comes to AML and this goes for both the industry as a whole, as well as between operators and regulators.
We all share the same objectives in wanting to keep crime out of the sector to protect customers. In my view, the industry needs more of an educational role rather than an enforcement one regarding AML. Enforcement is important but leading to that outcome should be a gradual process, by providing education and clarity along the way; in order for the industry to really learn and improve. Ultimately, it is in the interest of both operators and regulators to have a healthy industry built on solid collaboration aligning the regulatory and operative aspects.
A one-size-fits-all blanket approach simply does not work and open communication between the industry and regulators, as well as more granularity within the regulation itself, would ultimately ensure a safer environment for customersAntonello Cuschieri
Unfortunately, regulatory requirements are sometimes left vague, which leaves them open to interpretation and the industry might therefore not address risks the way regulators or legislators intended or expected. More clarity and certainty would ensure operators act in a compliant manner and education is a big part of that. Secondly, it would also better protect the industry because transparency brings stability and uniformity.
So, this would make the industry more secure to a certain extent. Regulations outline what needs to be done, but in aligning operators and regulators, sometimes it’s the ‘how’ that matters to ensure clarity and remove subjectivity. A one-size-fits-all blanket approach simply does not work and open communication between the industry and regulators, as well as more granularity within the regulation itself, would ultimately ensure a safer environment for customers.
In all aspects of compliance, including AML and fraud, we are at the mercy of criminal creativity so there are always emerging trends, with criminals finding new ways of using the industry for their illicit goals. In the criminal world, collaboration is high with networks that share details and expose opportunities.
This is another reason why we as an industry need to come together, and I would also argue that we should rope in other sectors, as we have limited visibility on what our customers do outside our domain; which makes it more challenging to identify AML risks. As an example, in the banking world, the full picture is available – both banking and gaming are heavily regulated, yet they are regulated separately.
Considering the intertwined relation between the two sectors, I believe it would benefit both if even the regulations in the respective sectors are equally intertwined. If we want to protect the industry, we need to extend the regulatory regime to other industries that service the gambling industry, and not see gambling as a singularly regulated area but holistically incorporating other industries that support, and also benefit from, the gambling industry.
This is becoming increasingly more important as new technology and challenges arise, including the advent of cryptocurrencies in our space, which also affects various industries.
As the modern environment we operate in keeps evolving quickly, we are continuing to expand our internal teams and increase our focus on compliance to stay on top of it. The regulatory landscape is becoming more complex as we operate in more markets than ever before, but we are hopeful that together with other operators and regulators, we can make AML and other important compliance topics easier to manage, to ensure we truly safeguard our customers and the industry by keeping crime out of gambling.