Malta’s iGaming Industry Comes Under Increased Scrutiny

Once again, Malta's iGaming sector has come under scrutiny.  The Mediterranean nation is home to the largest online gambling industry in the world.

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What's This All About?

• Over the weekend, Forbes released a scathing report on Malta's criminal infiltration into the i-Gaming sector.
• Malta was the first EU state to regulate online betting and being able to generate billions in tax revenue and offering companies tax breaks at the same time.
• But over time, the European Union had become infuriated with the tiny island nation.
• “An EU delegation dispatched to investigate reported an atmosphere of fear on the island, where organized crime was said to operate with impunity”, it reads.
• Former Malta Gaming Authority (MGA) CEO Heathcliff Farrugia was to be charged with corruption.
• The Forbes pieces notes that the Italian mafia had laundered millions through Maltese betting companies.
• “Italian prosecutors state that RaiseBet24.com operated as a simple laundromat for one of the most feared families in the Cosa Nostra, who created a veneer of credibility and access to financial institutions by gaining a gaming license from the MGA”, Forbes reports.

Here is more of what Forbes had to say:

“Against the backdrop of the public inquiry into the assassination of journalist Daphne Caruana Galizia, Malta has been rocked by a series of scandals this month, which saw the Malta Gaming Regulator’s former anti-corruption tsar charged with corruption. Meanwhile, anti-mafia prosecutors in Italy allege that the Malta Gaming Authority-licensed site RaiseBet24.com laundered $74.2 million for the Cosa Nostra”, the piece reads.

“Malta’s gambling problem did not fully surface until 2017, when a series of devastating accusations against the island’s institutions and politicians emerged. In May 2017, whistle-blower Valery Atanasov, who had been dismissed from the MGA, showed Reuters email exchanges that demonstrated that the regulator had broken its own rules between 2012 and 2014. Atanasov told the news agency that Malta’s lax supervision of betting companies “creates conditions that allow suspicious financial operations, money laundering and other criminal practices’”, it continues.

The independent Brussels-based NGO JournalismFund.eu called “The Malta Files” a roadmap to “how the smallest EU country became a haven for global tax avoidance.”

The article also touches on investigations published by the Black Sea and MaltaToday into billionaire Oleg V. Boyko, who they claim used Maltese companies to pay extremely low tax rates on $69 million in profits during 2011-12, amounting to just $2.7 million.  Boyko is not alleged to have broken any law based on his payments of tax calculated in Malta, however.

The tragic death of Caruana Galizia was illustrated by The Wire.

That bombing last October did more than kill Daphne, as she was universally known on the island. It ripped open the dark side of Malta, a rocky speck in the Mediterranean that is a full member of the European Union – and a haven for people dealing in online gambling, offshore finance and cryptocurrencies. The brazen assassination and the lawlessness it implies appalled not only Daphne’s friends and family, but also political leaders across Western Europe.

Three men have been charged with her murder. They deny the charges. Police believe the person who ordered the bombing is still at large. Malta’s government told Reuters: “Her murder is being investigated vigorously” and that “police will have whatever resources they need to pursue and prosecute those responsible.”

A Reuters investigation, in collaboration with more than 15 other media groups, including Suddeutsche Zeitung, Le Monde and France 2 television, sheds new light on Daphne’s complex character and life, and for the first time pieces together in detail key elements of the plot to kill her. This story is part of the Daphne Project, an investigation coordinated by Forbidden Stories, a Paris-based group that continues the work of journalists silenced through murder or imprisonment.

For her son Matthew, who spoke extensively to Reuters, the events of that October day remain horribly vivid. He doesn’t know who ordered his mother’s murder, but he does believe, as do some European Union officials, that the nature of Maltese politics and society made her assassination possible. There was a toleration of corruption, he says, that enabled such acts.

- Jagajeet Chiba, Gambling911.com