Stick in the Mud or True Sticking Point? Many Remain Stuck on Malta Controversy

Controversy is swirling in Malta around the claims of a sacked ex-MGA employee alleging habitual integrity-compromising breakdowns in the Malta regulatory organisation’s licensing procedures.

Sticky Issue

Dismissed from his post at MCA in February 2015, Bulgarian national Valery Atanasov cited hardware-sealing practices he was involved in at MGA--at the time was known as the Lotteries and Gaming Authority (LGA)--where he was tasked with approving and affixing stickers to the hardware Malta-based online gambling companies used to support local servers. 

A Lot to Protect

The tiny Mediterranean island of Malta has emerged in the iGaming landscape as a favoured base of operations for iGaming operators serving the majority of Europe while enjoying lower tax rates and licensing fees.  The MGA has issue a disproportionately large amount of 500 iGaming licenses.

Sticking Around

The MGA sends its employees special stickers to attach onto computer servers used for iGaming operations: these stickers contain servers ID numbers matched to the equipment used by each online gambling operator registered with MGA, Malta’s licensing authority.

Monitoring Transactions

The practice facilitates internal monitoring by providing MGA with information about how respective operator computers are processing transactions.

Stickering Breakdown?

Atanasov provided email exchanges to Reuters originally sent between representatives of three MGA licensees and MGA employees regarding repeated “breaches” in the sealing procedure suggesting a hypocritical internal culture.

The emails include a 2012 notification from Betsson consultant Robert Zammit that some gambling servers used in the company’s Maltese offices had not been affixed with seals for “years” since the Swedish company started operating in Malta in 2008.

Another email from 2013 shows Mr. Green Director Angelo Dalli informing the LGA that licensed operator Mr. Green still had unsealed equipment. 

Sticking to Procedure

Atanasov claims that MGA procedure calls for licensed applicants to submit diagrams of their computer network with MGA employees responsible for confirming physical correspondence between hardware and diagram. Only upon visual confirmation is the employee supposed to place the seal, with the MGA calling for the employee to report back broken or damaged equipment. 

The Claim

Atanasov claims that his refusal to sticker up to 11 operators’ hardware pieces of equipment that did not match submitted diagrams cost him his job. 

Non-Stick Solution

Procedurally, the sacking came about as a result of multiple operators filing complaints against him, with a finding of insubordination arising from the ruling that Atanasov was required only to place seals on computer servers and not evaluate the deservedness of each piece of equipment for stickering.

Further Protections in Place 

MGA chairman Joseph Cuschieri minimized the significance of stickering by explaining to Reuters that the MGA has additional and fare more comprehensive procedures in place for prevention of money laundering.

Further Breaches?

Reuters could verify no further alleged or actual wrongdoing on the part of the email-ers in question.

Outlook

With some breakdowns in procedure visible and potentially forgivable as typical and unavoidable slippage, the effectiveness of the remainder of the MGA’s anti-money laundering measures would truly determine the full extent of any laxity in procedure claimed by Atanasov, who hopefully has landed on his feet.