Malta, one of the world’s leading online gaming hubs, suffered a big dent in its reputation as the Financial Action Task Force (FATF) gray-listed the tiny Mediterranean-island country in a vote taken during a plenary session earlier this week.

The decision, which had been widely expected, could have far-reaching economic repercussions on Malta’s financial services, foreign investment as well as gaming industry. All of Malta’s financial activities could suffer sluggishness as the gray-listing by FATF will make them more expensive for investors to engage with. In simple words, it could decrease Malta online gaming industry’s attractiveness for foreign investors as gray-listed businesses would be considered at a higher risk as well as subject to more financial red tape.

Founded by the Grup-7 (G7) countries, FATF is an intergovernmental organization that takes such decisions as part of its efforts to combat money laundering and terrorism financing.

The small Mediterranean-island country now reluctantly finds itself on a list that includes terrorism-hit countries like Syria, Yemen, Burkina Faso, Myanmar, and Nigeria. While many countries are already on the notorious list, Malta earned the dubious honor of being the first EU member state to be gray-listed by FATF.

Malta’s Opposition Leader Bernard Grech urged the government to set up a national task force with the goal to place Malta back on the FATF’s white list at the earliest possible.

Commenting on the issue, Grech said, “The FATF will meet again in October and Malta must be on the agenda – this time for our country to go back on the FATF white list. This will be made possible if we work together at a national level with the participation of both sides of the room … This will seek to limit the long-term damage on Malta’s economy.”

As per a report published by media outlet Lovin Malta, the island country has become a breeding ground for financial crime in the past few years.

Recently, it faced severe international criticism for its controversial policies that include the sale of national passports and failure of the government to act against the officials mentioned in the Panama Papers for secretly owning offshore businesses.

Malta’s senior government figures, including Finance Minister Clyde Caruana and Foreign Affairs Minister Evarist Bartolo, spent the past couple of weeks lobbying to turn the tables in Malta’s favor. But, the United States, Britain, and Germany kept on pressing for Malta to be grey listed.