Mitigating the money laundering risks associated with the i-gaming sector : a bank’s perspective

Abstract

Banks are financial institutions which are very important for the economic function of a country, since they are vital for a country to survive and also to thrive. The main functions of a bank are giving overdraft facilities, overseas transfers of funds, accepting deposits and giving out loans advances, amongst other services that they offer. Without these functions it would not be possible for individuals to carry out business and consequently a country would come to an economic standstill. Apart from offering their services to the individual customer, they deal with companies, businesses and private entities, parastatal departments and they also offer their services to the governments. Without the banking sector, the iGaming companies that have opened their doors or relocated to Malta would not be able to function and carry out their day to day business transactions. Thus it is important for banks to put in place regulations and policies especially when dealing with the iGaming sector, due to the fact that they offer online gambling services and most of the time, the banks are unaware of who these individuals are. The iGaming companies are expected to carry out their due diligence on the customers that they on-board but banks cannot simply rely on the diligence carried out by them. This is due to the fact that if banks do not carry out the necessary checks, illicit funds could be laundered through the iGaming companies and then end up in their coffers, which could lead to banks being fined by the regulators or risk losing their licence. Banks could be referred to as the back bone of a country because without them money transactions would not be carried out and life would come to a halt; no sales, no purchases, no payments and no transfers would be carried out. Therefore managing to steer clear of the crimes of money laundering and that of the financing of terrorism is imperative for banks, other financial institutions and also the iGaming industry. By obliging the financial institutions to follow the ‘Prevention of Money Laundering and Funding of Terrorism Regulations’, the EU is trying to prevent the crime of money laundering from taking place. The researcher carried out this study through a qualitative method; eleven interviews were carried out with banks, audit firms and the relevant authorities. The results were analysed through a thematic analysis, focusing on the most mentioned topics by the respondents. This study shows that all entities concerned are aware of the risk of money laundering but they are showing that such crime is being fought off by following laws, putting in place internal policies and offering adequate training to all their employees.