Brexit and cost of compliance key themes at SIGMA | KPMG | IM

Brexit and cost of compliance key themes at Summit of iGaming, Malta

Brexit and cost of compliance key themes at SIGMA

This year, KPMG extended its eGaming Summit format to Malta and held sessions on Brexit and regulatory compliance as part of SIGMA, the Malta iGaming Summit gathering.

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Now in its third year, SIGMA has grown to attract an international audience, showcasing the latest offerings from industry operators and hosting four conference sessions over the three-day event held from 16th -19th November.

One of our discussions, The Brexit Looking Glass explored the ramifications of the EU leave vote for the gambling sectors in England, the Isle of Man, Gibraltar and Malta – and, in particular, the relationship that the UK will have with Europe going forward. 

One consideration was how VAT would be levied in the UK as it was regarded as a common EU tax that would fall away with Brexit, requiring the need for a separate replacement tax in the UK.  There was also debate about the relatively small size of the online gaming industry and how it may be inconsequential in the negotiations around Brexit.  

Looking at Malta, the Isle of Man, Gibraltar and Alderney, it was generally perceived by the panel that there would be limited change for the Isle of Man and Alderney as neither enjoy EU access rights at present. 

Most uncertainty currently exists in Gibraltar, however the Gibraltar relationship with the UK would be unchanged by Brexit and the UK is one of Gibraltar’s largest markets.

Meanwhile the session The Complexities of Compliance touched on a number of hot topics including the 4th Anti Money Laundering Directive, Data Privacy, Gaming Duty, emerging markets and BEPS (Base Erosion and Profit Shifting). A recurring theme was the cost to operators in implementing constantly changing regulations around the globe. 

Having worked with a number of large eGaming operators in reviewing their adherence to AML regulations, it has become clear to me that there is still some resistance in implementing new regulations wherever they may be based.

I do agree there is an onus on the gaming sector when it comes to keeping up with changing regulations and this has a cost on their businesses. Unfortunately, I can`t see this getting any easier going forward as the regulators get tougher with the less unscrupulous operators still out there. 

I do believe that operators need to be more pro-active when faced with implementing new legislation or regulations - and deal with them on a timely basis. This would give regulators comfort that the industry does take these changes seriously and is keen to make the sector a safer place to do business, ultimately deflecting the negative views that have been voiced by certain governments and media throughout the world.

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