The Organized Crime and Reporting Corruption Project (OCCRP) has published a detailed report, How Maltese Online Gambling Became an ATM for the Italian Mafia, that deals with concerns over corruption and money laundering taking place within Malta’s current gaming system. The report was created by an international consortium of journalists which has been laboring for months to complete the work of murdered investigative journalist Daphne Caruana Galizia, who tragically died in a car bomb attack last October.
The speculation is that Galizia was likely murdered for exposing criminal activity in Malta to public scrutiny. As a result, some forty-five journalists, representing eighteen news organizations from fifteen countries, have created The Daphne Project, under the aegis of the OCCRP, as a means of following in her footsteps. The project is dedicated to continuing the stories Galizia worked on during her lifetime; online gambling is just one of them.
In the publication linked above, the consortium offers a wide-ranging critique of the existing systems of gambling regulation in Malta, exposing several regulatory shortcomings which have left the door open to exploitation in the service of such criminal actions as money laundering. It appears, based on the report, that the problem is of significant scale.
Amongst other things, the OCCRP notes that, over the past decade, Italian investigators have “found repeated instances of criminal infiltration and a lack of effective oversight by the Malta Gaming Authority.” They further note that anti-mafia prosecutors in Palermo, Sicily have commenced a major crackdown on a Maltese-based gambling ring. One police informant is quoted as stating that the local mafia has “… infiltrated the sector by making deals with the owners of betting websites, many of whom are set up in Malta because it guarantees a more favorable tax regime.”
As part of this lengthy report and long-running investigation, the OCCRP reports several cases in which operators whose licenses have been revoked continue to operate, offering as one example the case of LeaderBet, a leading online bookmaker. “(O)ver a month since the suspension of LB Group’s license, the (revocation) measure appears toothless. The company is still working out of its state-of-the art base in Malta’s gambling district of Gzira.” The firm apparently used a third party’s Austrian license, allegedly without permission, only ceasing to do so once reporters alerted the third party. Even after this, the OCCRP states, LB continued to operate. As a result, Leaderbet is currently operating in Malta without a valid license.
The OCCRP also highlights concerns over transparency in terms of licensee beneficiaries, quoting the Malta Gambling Authority (MGA) themselves as saying that “there are structures that make it harder for the MGA to detect and identify the true beneficial ownership, especially when structures are offshore and the applicants provide partial or misleading information.”
These problems, and more like them, are detailed in what is ultimately a very strong piece of investigative journalism, hopefully one which will in the long run support Malta’s stated goal of being transparent and responsible in its regulation of its gambling sector, which now accounts for 12% of the nation’s entire GDP. It’s brave work. Thank goodness someone is willing to do it.
