Italian police busts mafia gambling operation with links to Malta
Maltese regulator suspends licences of two companies believed to be involved in a £1.4bn gambling ring run by a notorious criminal gang
The Malta Gaming Authority (MGA) said it will work with police to keep the jurisdiction free from crime after it suspended the operating licences of two companies alleged to have been part of a £1.4bn gambling ring run by a notorious Italian criminal gang.
In what has been dubbed ‘Black Wednesday’ in Italy, Italian police yesterday arrested more than 50 people connected to a mafia organisation believed to have been illegally offering online gaming products in Italy while also laundering proceeds of crime and committing tax fraud.
The gambling sites were being offered via a network of approximately 1,500 internet cafes each holding foreign gambling licences, known as CTDs, which are outside of the remit of the Italy’s gambling regulator.
Two of the licences believed to have been used by the criminal ring are held by companies called Betuniq and Betsolution4U, registered and regulated by the MGA since 2011.
Six Italian nationals, who were thought to have been running the sites, were yesterday arrested in Malta. The MGA immediately suspended the two licences and said it was working closely with Italian law enforcement authorities and Maltese police.
“The MGA is providing full support to the relevant authorities so that Malta’s reputation as a gaming jurisdiction of excellence is kept free from crime and money laundering,” a spokesperson for the MGA said.
“The MGA is also alerting counterpart regulators in other EU jurisdictions about this case,” the regulator added.
In total, 45 Italian companies and 11 foreign entities – six in Malta, two in Spain, two in Romania and one in Austria – were seized together with 1,500 CTDs and 82 websites, which included both Italian licensed and foreign licensed gaming platforms.
According to DLA Piper partner and gaming lawyer Giulio Coraggio, while the arrests will live long in the memory, they could lead to a positive liberalisation of the Italian gaming market.
“These events show that measures restricting the offering of games only lead to an increase in criminal activities,” Coraggio said.
“An adequate licensing regime with deep controls as those ensured by the systems of the Italian gaming regulator coupled with an appropriate tax regime and obligations that are not excessively burdensome and allow a competitive gaming offering is the best solution to limit potential criminal conducts,” he added.
Italy has made attempts to regulate the CTD market, which is almost as large as licensed betting shops, by offering the chance to operate as Italian licensed entities should they commit to the re-payment of back-taxes at a discounted rate.
However, while some decided to take up that offer, many decided to remain operating through their foreign licences, boosted by a judgment passed the European Court of Justice which ruled any restriction would be against the freedom of trade principle.