In a landmark moment for the Maltese gaming sector, the Malta Gaming Authority has introduced the Environmental, Social and Governance (ESG) Code of Good Practice for the remote gaming sector.
This ESG Code seeks to serve as an instrument for self-regulation, helping remote gaming companies align with best practices and maintain a position that allows them to effectively meet the evolving expectations of key stakeholders in the sector.
While this ESG Code is voluntary, all MGA licensees are strongly encouraged to adopt it to better demonstrate their commitment to sustainability and to continue improving the ESG standing of the industry.
Addressing a press conference, MGA CEO Carl Brincat said that across industries, a trend has emerged towards greater transparency, disclosure, accountability and active engagement in addressing the pressing social and environmental issues of our time.
“The MGA has always strived to be at the forefront of regulatory innovation and progress. We have been working not only to supervise the gaming industry, but also to nurture it, to foster a space where operators can thrive, while ensuring that the welfare of society remains paramount. Our ESG Code represents our commitment to this,”
Dr Carl Brincat, CEO, MGA
When delivering his keynote address during a recent ESG business breakfast organised by Zampa Debattista and GTG, Dr Carl Brincat stressed that businesses are not solely expected to excel financially; they should contribute positively to society and minimize any negative impacts. Brincat introduced an intriguing concept suggesting that gaming operators don’t just obtain a license in a regulatory and legal sense but also acquire a social license. Given the nature of their industry, gaming operators are granted a license with the purpose of demonstrating concern for their customers beyond mere revenue per capita, emphasizing the impact they have on people’s lives.
According to Brincat, companies should prioritize their social commitment not only because it aligns with ethical principles but also because it makes good business sense. An established Environmental, Social, and Governance (ESG) strategy attracts customers, investors, and fosters favourable banking relationships. There is evidence indicating that heightened public awareness has led players to consider ESG factors when choosing gaming/betting platforms. Additionally, banks are increasingly incorporating ESG reporting and genuine credentials into their considerations when deciding on credit approvals.
Key Features of the ESG Code – a Balanced Approach
The Code identifies 19 ESG topics, derived from the materially assessment, organised into three categories: Environmental, Social and Governance, providing a strategic framework for remote gaming companies to focus their reporting efforts effectively.
Two Tiers of Reporting: The MGA will recognise companies’ efforts with two levels of reporting, Tier 1, a basic ESG standard, and Tier 2, a more aspirational level, to ensure sustainability efforts are focused and impactful.
Flexible approach for certain disclosures: Core disclosures have been defined, while reporting entities will have the flexibility to choose optional disclosures;
Streamlined Reporting: The Code includes several ESG disclosures already required under existing reporting frameworks to streamline reporting and reduce administrative burden; and
Focus on ESG reporting: The emphasis is on ESG reporting, rather than setting specific ESG targets.
An MGA ESG Code Approval Seal
Industry consultation revealed a strong desire for formal recognition by the MGA. To meet this demand, the MGA ESG Code Approval Seal will be awarded to entities that report under this Code, showcasing their commitment to ESG. Different seals will be awarded to entities that meet Tier 1 or Tier 2 reporting requirements.
How the ESG Code will Work in Practice
The Code will be a standalone voluntary submission, separate from other ESG disclosures made by the reporting entity to the MGA or other bodies. Reporting will be confidential, and the MGA will launch an online tool to facilitate the process. Additionally, the ESG Code will align reporting periods with the financial year of reporting entities. The inaugural reporting year will commence in 2023, with the submission deadline set for the third quarter of 2024.
Conclusion
The MGA’s ESG Code of Good Practice is a crucial step in advancing the sustainability and responsibility of the remote gaming industry in Malta. This achievement represents a significant milestone in our journey, and we are enthusiastic about the positive impact it will have on the gaming industry and our stakeholders.
Dr Carl Brincat will be part of the first panel of SiGMA Europe 2023 on the 13th of November. The panel discussion, entitled Malta’s European Odyssey, navigating rough seas, will focus o the challenges that Maltese operators face in Europe. The latest issue of the SiGMA Magazine features an interview with Dr Carl Brincat.
