The prevention of money laundering through the detection of suspicious transaction within the Maltese gaming industry

Abstract

This research study focuses on the effectiveness of mitigating measures in order to detect and prevent money laundering. The aim of this research study is to identify the factors that make the Maltese gaming industry susceptible to money laundering. It assesses the various mitigating measures in this fast-evolving sector, an area where suspicious transaction reports feature prominently. Additionally, this research explores the ways in which gaming operators deal with the detection of suspicious transactions during transaction monitoring. To explore this phenomenon this study adopted a mixed method research approach, combining semi-structured interviews with questionnaires. The semi-structured interviews were conducted with professionals who had expertise in the workings of money laundering and the gaming industry. The questionnaire was distributed among various gaming companies in both the landbased and remote sectors. The findings reveal that the risk of ML was always going to be present because both sectors presented multiple opportunities for criminals to complete the money laundering cycle. The findings also indicate that there was the need of staff training to increase knowledge of mitigating measures subject persons should implement to create a compliance culture and a proactive approach rather than a reactive one. Also, there appeared to be a healthy relationship between regulatory bodies and gaming operators, who work together to ensure that online and offline gaming adheres to the recommended AML/CFT policies and procedures. The study concluded that money launderers were constantly trying to exploit weaknesses in the regulations or systems adopted by subject persons. It was also found that technological innovations created new opportunities for criminals, who were becoming more technologically proficient. Subject persons should therefore stay abreast with the new methods that can be used to launder money. Suggestions for further research relate to the challenges faced by Malta due to its recent greylisting; the reasons for the high level of suspicious transactions that still go unreported; and why land-based gaming operators seem reluctant to answer questions on money laundering within their industry.