MGA softens proposed foreign licence recognition reforms in Malta

The Malta Gaming Authority (MGA) has concluded its consultation on changes to Malta's Recognition Notice regime and set out a softened set of proposals in a feedback statement dated 26 October. The Maltese government is scaling back its reforms to foreign licence recognition after resistance from the industry, and has said new legislation may be required. The MGA said it will begin collecting information from foreign licence-holders under the new regime this year, covering the 2025 reporting period and limited to business-to-consumer operators.

Recognition Notices allow gambling businesses based in Malta that hold licences from regulators elsewhere in the EU/EEA, or from several other jurisdictions with "broadly equivalent" anti-money-laundering rules, to operate from the island without a formal MGA licence. The arrangement covers both business-to-consumer and business-to-business companies. In practice, many businesses on the island operate under Swedish or British licences. The MGA issued the consultation to relevant stakeholders in April as part of Malta's National AML/CFT Strategy 2024–2026.

The regime was criticised in Malta's 2023 money laundering National Risk Assessment, which rated the residual risk as "medium-high", above the assessed total for online and land-based gaming as a whole. The assessment highlighted operators working via foreign licences without a Recognition Notice, which it said is possible because the system relies heavily on businesses proactively informing the MGA. It also pointed to the prospect of businesses with a Recognition Notice operating under a less robust AML/CTF framework abroad. The assessment said that by 2021, 111 Malta-incorporated gaming companies were operating under Recognition Notices, including 46 business-to-consumer operators.

The April consultation document explained that the planned changes would strengthen the Authority's assessment approach on top of existing arrangements. The MGA said the emphasis would fall on the controls it applies at the authorisation stage and on how ongoing monitoring procedures are structured and how effective they are. In its feedback statement, the regulator described the responses as constructive and valuable. It said stakeholders generally supported the direction of the proposed enhancements, while stressing proportionality, operational practicality and the importance of not duplicating requirements set by foreign licensing authorities.

Most of the proposals were relaxed in light of stakeholder feedback, and one was removed altogether. The original request for a full corporate structure chart drew objections on duplication grounds, and the regulator ultimately pared its ask down to UBO information alone. B2B suppliers were exempted from many of the obligations after stakeholders contended that checks built for consumer-facing operations should not extend to them. A standardised legal opinion template will be dropped entirely, given concerns about squeezing different countries' legal systems into a single box. The regulator also abandoned a floated requirement for five years of regulatory history including correspondence, and licensees will instead be asked for only material fitness and licensing matters.

On annual deposit value and volume, which operators argued was commercially sensitive, the MGA appears to have settled for inexact predefined bands rather than precise numbers. Operators will also provide less precise payment methods, aggregated into categories, after stakeholder feedback. Some stakeholders questioned whether the MGA has the statutory authority to request some of the information, and the MGA acknowledged that some of the new Recognition Notice requirements may require amendments to the existing framework.