Key Function Positions for iGaming in Malta

Updated: June 30, 2020 | 4 minute read

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Introduction: Key Function Positions

Pursuant to the new Gaming Act which entered into force on 1st August 2018, licencees are required to identify, at the application stage, those individuals who will be entrusted with key functions as enlisted hereunder. Key functions may only be provided by natural persons.

Such persons will undergo vetting by the Malta Gaming Authority in order that their fitness and properness, as well as their competence, be ascertained and confirmed. Individuals approved for the roles for which they have been identified shall be issued with a key function certificate enabling them to perform the relevant function, or functions as applicable. A person may be granted a certificate of approval to perform more than one key function, and more than one person may perform the same key function.

Persons performing key functions are not required to be employees of the licensee but are required to have full knowledge, understanding and access to the licensee’s practices, procedures and systems.

Key Function Positions for B2C Licencees

The Gaming Authorisations and Compliance Directive enlists the following roles and responsibilities performed in connection with the gaming activity of a B2C licensee as a key function:

  1. The chief executive role, or equivalent;

  2. Management of the day-to-day gaming operations of the licensee, including the processes of making payments to, and receiving payments from, players;

  3. Compliance with the licensee’s obligations emanating from the licence or licences issued by the Authority;

  4. The administrative and financial strategies of the licensee, including but not limited to the payment of tax and fees due to the Authority;

  5. Marketing and advertising, including bonus offers and promotions;

  6. Legal affairs of the licensee, including but not limited to contractual arrangements and dispute resolution;

  7. Player support;

  8. Responsible gaming;

  9. The prevention of fraud to the detriment of the licensee;

  10. The risk management strategies of the licensee;

  11. The prevention of money laundering and the financing of terrorism;

  12. Adherence to applicable legislation relating to data protection and privacy;

  13. The technological affairs of the licensee, including but not limited to the management of the back-end and control system holding essential regulatory data;

  14. The network and information security of the licensee; and

  15. Internal audit.

Key Function Positions for B2B Licencees

As for a B2B Licensee, the key functions shall be the following:

  1. The chief executive role, or equivalent;

  2. The day-to-day gaming operations of the licensee;

  3. Compliance with the licensee’s obligations emanating from the licence or licences issued by the Authority;

  4. The administrative, financial and risk management strategies of the licensee, including but not limited to the payment of fees due to the Authority;

  5. The legal affairs of the licensee, including but not limited to contractual arrangements and dispute resolution;

  6. Adherence to applicable legislation relating to data protection and privacy, where applicable;

  7. The technological affairs of the licensee, including but not limited to the management of the back-end and control system holding essential regulatory data;

  8. The network and information security of the licensee; and

  9. Internal audit.

 

Conflicting Key Function Positions

No person may exercise key functions which are, in the Authority’s sole discretion, deemed to be in conflict with each other. Particularly, but without prejudice to the discretion of the MGA in identifying additional conflicts and the responsibility of the licensee to identify any other conflicts, the Gaming Authorisations and Compliance Directive identify some conflicts in key functions namely:

  1. Compliance-based roles are incompatible with roles centred around the growth of the business. In particular, the Chief Executive role, responsibility for the licensee’s finances (except responsibility for the payment of tax and fees due in terms of law) and responsibility for marketing and advertising are incompatible with the following roles:  

    • Compliance with the licensee’s obligations emanating from the MGA licence/s;

    • Player support; and

    • Responsible gaming.

  1. The person responsible for the prevention of money laundering and financing of terrorism is expected not to take on other responsibilities which may conflict with his functions in such role, or which otherwise prejudices the person’s effectiveness and independence in such role, including but not limited to the Data Protection Officer;
  1. The Data Protection Officer role is incompatible with any other role that manages or otherwise controls personal data, or which otherwise conflicts with such function or prejudices the person’s effectiveness in such role, including but not limited to the Money Laundering Reporting Officer;

  2. The person responsible for internal audit is normally expected not to hold any other function.

 

Exemptions Applicable to Start-Up Undertaking

Start-up undertakings as defined in applicable legislation and having been recognised as such by the Authority in line with the Start-Up Undertakings Directive may be allowed to have a single person conduct roles which may prima facie appear conflicting, during the first year of operation, if the Authority is satisfied that the integrity of the licensed operation will not be negatively affected.

Furthermore, such undertaking shall not be required to have a person responsible for the key function of internal audit, during such first year of operation.

 

Certificate of Approval for Key Functions Positions

A certificate of approval is issued with three-year validity and renewable upon application to the MGA not later than 60 days before the expiry thereof. Whilst the MGA is empowered to suspend and revoke certificates of approval, a holder of a certificate is expected to act in good faith and give notice to the MGA upon his dismissal or resignation or upon happening of any circumstance rendering him no longer fit and proper. The holder of a certificate is also expected to notify the authority of circumstances in relation to the licensee which are by their nature notifiable to the authority and which relate to the function which the person performs for the licensee.

Each licensee shall notify the Authority whenever a person exercising a key function resigns and, or is dismissed, within 3 working days after such resignation or dismissal, and of the appointment of the replacement also within 3 working days after such appointment.

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