Cutting through the red tape of compliance and AML

Parimatch Maksym Liashko AML Compliance
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As the industry tests the waters in emerging markets with new technological capabilities, legal parameters are shifting, and the key to progress is fluidity, argues Partner at international betting holding Parimatch, Maksym Liashko, who is responsible for legal matters at the firm.

 

With more than a decade of experience in the technology sector since 2007, Maksym Liashko has brought his expertise in corporate, intellectual property and economic law to the online betting sector for the last three years managing the legal department at one of the leading CIS region gambling businesses, Parimatch. Exploring the commonality between e-betting regulation and development to other digital industries, such as e-commerce, Liashko holds court to uncover the future of licensing in Europe, the potential inherent in KYC, and why betting is breeding ground for entrepreneurs.

As a legal partner to one of Eastern Europe’s leading operators, how do you see the future of European gaming shaping up in the face of tighter compliance and AML requirements?

Maksym Liashko, Partner,Parimatch
Maksym Liashko, Partner, Parimatch

If we focus too much on compliance and AML, we risk stagnating the growth and progression of the sector. Compliance with the AML requirements is necessary for anyone who comes into contact with consumer money. However, responsibility should not just fall with the operators. Banks and other financial institutions should play an important role. As they, better than others, can judge the financial capabilities of their clients and the primary source of their funds. We want to work closely with financial institutions identifying any irregularities, but the need to fulfill the requirements of the GDPR complicates and weakens our ability to exchange player data with financial institutions.

Gambling throughout the world suffers from a negative narrative, do you think there’s an easy fix for operators to combat compliance issues with technology or in terms of AML/KYC, especially in the face of online gambling and more widespread international gaming?

I think it is unfair and inaccurate to say that there is universally a negative narrative against sports betting. In established markets betting is seen as an entertainment industry. While in emerging markets it is increasingly being associated with entrepreneurialism. However, there is, of course, a lot more that needs to be done by the industry to convey that betting is about emotions, adrenaline and ultimately enjoyment. It is not just a way to earn money.

Compliance with KYC and other requirements can undoubtedly help improve the industry’s reputation and must be a focus for operators, especially as the regulation is continually improving through reforms. Consequently, we need to be able to adjust accordingly. The rapid growth of online betting is a good opportunity for the sector as well, as it makes it easier to adapt to regulatory requirements compared to typical betting shops.

From a licensing perspective, what do you see as the significant pitfalls operators fall into when operating in multiple jurisdictions and what’s your advice to avoid these?

Regarding the compliance of rules in different countries and technologies, it is vital that all responsible (lawyers, AML, compliance, MLRO) interact with IT in the very early stages of software development. Then there is no difficulty of operating in each country; as the software can be configured quickly if the necessary functions are developed initially.

In terms of Europe’s licensing future, where do you see the biggest opportunities stemming from in the next few years?

Regulators have a delicate balance of helping to increase market access for start-ups or international companies while ensuring that there are the same competitive conditions for all operators.

Countries that chose the method of prohibitions and restrictions (blocking transactions, websites, advertising ban, etc.) form a somewhat chaotic environment in which pirated domains still operate, but players and consumers do not get any protection. At the same time, countries with overly flexible regulations that recognize international licenses can make the market accessible to others with fewer thresholds (VAT registration; deductions from gaming profits, etc.), giving these new entrants a competitive advantage.

I believe that the future lies in the development of liberal national standards for the recognition of foreign international licenses (foreign guarantees deposits; insurance and certificates for gaming software) to create equal competitive conditions for both local and international companies across global markets. In these countries, both the consumer (a high level of service with all the innovations) and the state (tax revenues) will win.


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