Malta Scales Back Foreign Gambling License Reforms

Malta’s plans to tighten oversight of gambling companies operating under foreign licenses have faltered after industry pushback, raising questions about how far the regulator can go without changes to existing legislation. While the Malta Gaming Authority (MGA) still wants to strengthen supervision, its ability to do so may depend on the Maltese government‘s willingness to amend the legislation underpinning the system. Foreign Licenses Create Unique Concerns According to a recent Next.io report, the MGA has abandoned several of its proposed amendments to the region’s Recognition Notice (RN) framework. While the regulator will still consult foreign license holders and gather additional suggestions, this sudden shift in stance marks a stark departure from the authority’s earlier ambitions and may set back vital reforms. Recognition Notices allow Maltese-based gambling companies to operate under licenses issued by regulators in other EU and EEA countries, as well as certain other jurisdictions considered to have broadly equivalent anti-money laundering (AML) standards. This arrangement applies to both business-to-consumer (B2C) operators and business-to-business (B2B) suppliers and allows them to avoid obtaining a separate MGA license. This system has faced scrutiny after concerns that some companies may be operating with insufficient oversight. A major point of contention was that some companies may operate under foreign licences without informing the MGA. Certain operators may benefit from weaker AML and counter-terrorist financing controls in the jurisdictions where they source their licenses. The Island Aims to Improve Its International Image Malta is still struggling to repair its public image after entering the Financial Action Task Force gray list in 2021, although it was removed the following year. The MGA launched a consultation in April as part of the island’s National AML/CFT Strategy for 2024–2026. Its original proposals included more extensive corporate disclosures, more detailed financial information, and a standardized legal opinion for foreign license applications. One significant issue is whether the MGA has sufficient authority to demand some of the proposed information. The regulator acknowledged that certain requirements may be impossible without amendments to the existing framework. This means that implementing the revised regime would require legislative changes. The MGA said its final approach would clearly distinguish B2B and B2C businesses and would rely on targeted, risk-based information gathering. While the MGA maintains that the changes will enhance oversight without placing unnecessary obligations on companies already under the supervision of foreign regulators, the planned reforms now appear to lack much of their original scope. Despite this setback, the regulator plans to start collecting information this year, focusing on B2C Recognition Notice holders in the 2025 reporting period.