The increased regulatory burdens on iGaming operators has unsurprisingly lead to a talent drought in the specialised field of legal and compliance. Small to medium sized operators are now implementing in house legal and compliance functions almost from start-up phase, whilst larger online gambling operators are challenged with multiple and greatly deviating local territory gambling laws alongside managing the sideways onslaught of various consumer protection regulations and consequently have to implement large and complex legal, regulatory and compliance structures akin to those that are usually seen within large banks.

The difficulty is that the number of professionals qualified and experienced in this area, particularly for gambling operators whom have established operations in areas with a smaller resource pool such as Malta, is incredibly lean. CV’s can be incredibly misleading in an environment where fast paced promotion is easy and placing the high risk area of legal or compliance in the hands of someone whom is not qualified to hold that role or whom is unable to assess and understand the specifics of a given situation can be fatal.

Legal and compliance headcount turnover in Malta, where the fall back statutory notice periods are short and where opportunity and employee churn are high, can constitute a very real and very expensive business risk and recruiting, retaining and developing the right legal compliance people should be high on the list of priorities for all operator UBO’s and other C level gaming executives.

Compounding this, only a small number of iGaming executives could claim to have real experience in managing a reporting line to legal and compliance functions and therefore are not able to differentiate between different levels of knowledge and experience, good or bad legal advice or an approach which considers the commercial versus an outright inability to understand some real risks that are facing the relevant iGaming operator.

Here are some legal and compliance recruitment, structuring and support hacks that can assist with managing, establishing and maintaining a stable legal and compliance function:

Recruit from within and train, train, train

Whilst there are roles where a legal qualification from an EU jurisdiction plus a requisite number of years PQE can simply not be avoided and where a evidential legal training and background is a must, a number of compliance roles within gaming can be successfully met from internal headcount and a good training program which should then be revised annually. A number of the best compliance professionals I have encountered in the online gambling industry have been promoted from within. Look to those teams whom are working closely with operational compliance, such as fraud and payments, for internal promotion and succession.

Gambling experience is not always better

Whilst internal promotion for compliance roles can be successful, in order to achieve a more robust legal and compliance function in larger operators this must be counterbalanced with sound legal training, knowledge and experience. Such legal experience and knowledge is usually much more well-rounded when legal (or indeed compliance) experience has also been obtained from areas other than (or as well as) gambling. The gambling industry has a lot to learn from other industries and having a legal and compliance function that is too gambling specific can be limiting. Some easy fit sectors for recruitment include: ECommerce, Fintech, Financial Services, Telecomms and Technology. Whilst you must ensure that those with no gambling specific experience are onboarded with high intensity gambling specific training, the benefit to the iGaming business of gaining insights into processes and structure as implemented in more mature industries or within innovative fast growth sectors can be invaluable to strategy and workflow across the legal and compliance function.

Establish your shared services outside of Malta

Recent years have seen a number of high growth operators with Malta licences establish offices for recruitment and retention purposes outside of Malta. Lack of infrastructure, schools, increasing rent and property values mean that even if you are able to recruit talent to Malta, it can be hard to keep them there. In legal and compliance, it has also undoubtedly lead to a somewhat warped pay structure for such professionals with salaries for persons with relatively little experience easily surpassing salary levels for lawyers with comparable number years PQE within regulated industries in central London. Depending on the size of your legal and compliance requirements, consideration could be given to establishing your legal and compliance function in a jurisdiction with a high volume influx of legal and compliance professionals, where salary levels are less opportunistic and employee churn and loyalty more stable.

Compliance culture

One issue that is regularly cited for legal and compliance employee churn is the lack of structure within online gambling organisations, with issues finding their way to legal and compliance too late, with too tight and unrealistic deadlines and with the larger business not engaging on any real level with legal and compliance requirements. Where you see a stable legal and compliance function within the gambling industry, it can often be a safe assumption that the business at large is structured in such a way that the legal and compliance function are able to do just that: function. Legal and compliance can often be seen as something uninteresting by those working in the online gambling industry but leaving legal and compliance matters solely with an unloved legal and compliance function to fully manage, with no real engagement from the wider business other than to push back on requirements and processes will unquestionably lead to a higher than usual employee churn in this area and systemic issues of non-compliance throughout the business. It is in everyone’s interest to foster a culture of compliance ownership throughout the business, a legal and compliance team is better when functional, stable and supported. The possible business risk if it is not is simply not an acceptable risk for a regulated online gambling business to take.

Plan for overflow and outsource

Resource issues can often lead to legal and compliance departments being under resourced at times of increased workflow and tight deadlines. Quick commercial deals, M&A activity and new local licensing regimes, as well as increased regulatory monitoring and enforcement means that a good plan for management of overflow of work should be in place enabling an overstretched legal and compliance function to be able to outsource work to trusted service providers, consultants and advisors.

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