The Malta Gaming Authority (MGA) is certainly the largest jurisdiction for online gambling in Europe. To date some 500 licenses have been approved to various providers, more than any other jurisdiction within Europe. Can so many license holders be monitored effectively or has the monitoring become lax?
Valery Atanasov versus the MGA
A former employee, Valery Atanasov, claims that the MGA has become lax about some of its own rules, which ultimately led to his dismissal in 2015, something he is still fighting against.
The issue at hand has to do with the practice of sealing the equipment used by online gambling operators. When an operator applies for a license, they have to undergo a strict process designed to ensure the best monitoring of gambling activities and adherence to tax and money-laundering regulations, consumer protection and gambling laws.
One such practice included “sealing” the equipment. When an operator applies for a license from the Malta Gaming Authority, they are required to provide a diagram of all their technical equipment and its location. Once the diagram is provided, a MGA employee would perform an inspection and then proceed to seal the equipment, which consist of applying a sticker on the equipment with an overlap that attaches to the location it is placed in. Thus, if a seal is broken, tampering may have occurred and a detailed report would have to be filed to investigate the matter.
Atanasov was one such employee and found discrepancies between diagrams and equipment. In such cases he refused to apply a seal, apparently in an effort to ensure better accuracy before a seal is applied.
Emails provided to Reuters
Atanasov provided Reuters with emails that he had been included in, where some gambling operators remarked on their unsealed equipment and requests for appointments to remedy the situation. In those cases representatives of the operators remarked that their equipment had been unsealed for some time and that requests for appointments had gone unanswered in the past.
Since the sealing of the equipment was considered a pre-requisite to receive a license, there were worries that unsealed equipment was used illegally, though the operators assured that they have always been adhering to all licensing requirements imposed on them. However, in the case of their equipment being sealed there was very little they could do other than ask for an appointment to get it done.
MGA rejects accusations
In a response to Atanasovs allegations of lax monitoring of equipment, the MGA said that they were unfounded. Sealing was not determined by law, which means it could not generally be enforced. Whilst it falls under good practice, appointments to seal equipment could be delayed and postponed for quite some time.
It was much more important to the MGA to enforce a number of other regulatory measures that were much more effective to prevent tax evasion and money laundering, among them 24/7 CCTV monitoring at respective data centres, regular audits and technical checks by third parties, data extractions and other practices that they could not comment on due to their sensitive nature.
Atanasov is merely a disgruntled employee, who had been dismissed for insubordination among other things. Multiple operators had apparently complained about him after he left their equipment unsealed. The MGA says that Atanasov had never been in a position to decide by himself to seal or not seal equipment, regardless of discrepancies he may have found. He was sent to seal the equipment and it would have been sufficient to record and report any discrepancies back, which could then have been acted upon.
At the moment Atanasov is still fighting his dismissal before Malta’s Industrial Tribunal. His chances of success may not have improved by coming forward with his accusations, however.