Scheduled to come into force in December 2007, the third European Money Laundering Directive mentions that casinos will be a regulated sector, although all other sectors of the gambling industry will be affected as well.
The main purpose of the new directive is to bring European legislation in line with international recommendations--namely the Financial Action Task Force's (FATF) recommendations on anti-money laundering and counter-terrorism financing measures.
By doing this, the directive takes account of new risks (e.g. by including terrorist financing in the scope of the directive) and vulnerable sectors (e.g. by banning credit institutions from entering into a correspondent relationship with shell banks).
This EU measure will affect the United Kingdom as well as Gibraltar, but not the other overseas territories or the crown dependencies.
The provisions of the new directive apply to:
- credit institutions and other financial institutions;
- auditors, external accountants and tax advisors;
- notaries and other independent legal professionals;
- trust and company service providers;
- estate agents;
- money service businesses (including exchange offices);
- dealers and auctioneers in high-value goods (whenever payment is made in cash, and in an amount of 15,000 euros or more); and
- casinos.
Mario Galea, chief executive of the Lotteries and Gaming Authority in Malta, has already for over a year contact with the financial specialists of the EU.
"One of the biggest concerns of any authority regulating gambling has been, of course, money laundering," Galea said. "With the introduction of online gaming, this concern became more and more vital since in the cyber world transactions are taking place faster and it is easier to hide one's tracks."
Regulators in Malta try to mitigate the problem by building monitoring systems that Galea refers to as a "virtual regulator" that creates an audit trail of all transactions.
The new directive won't lead to policy changes in Malta, where Galea says regulations were already up to speed.
He explained, "In the case of Malta, for example, land-based casinos are required to record deposits as well as winnings above certain amount whilst the regulation stipulates only reporting of winnings. KYC is done on every person entering the casino even if that person does not play."
He also supported the notion that the directive should not apply only to casinos.
"The directive makes reference to casinos, and this has been interpreted literally by many responsible authorities implementing the directive in the member states," Galea said. "Unfortunately it should have read as gambling, instead of casinos, to make the implementation as broad as possible. In our case we are part of the steering committee on the implementation of the directive and currently we are assisting the committee into understanding the industry in order to ensure a watertight implementation."