SZ: does the Mafia like online casinos from Malta?

For years Malta has been established as a European centre for the online gambling market. In the past, the early liberalisation of online casinos together with low tax rates and charges had attracted many gambling providers to the Mediterranean island. In an exciting exercise we looked at the importance of the Maltese online casinos as money laundering means for the Italian Mafia groups.

In the middle of December the Süddeutsche newspaper (SZ) had published an article with the title “How come the mafia is a fan of Malta’s online casinos“. This is a study about the Anti-Mafia organisation “Mafia – No, thanks” from Berlin. The study was commissioned by the European Member of Parliament, Martin Schirden. Those responsible concluded that it is too easy for the criminal mafia groups to conceal the origins of the money and thus it is possible to launder money in great style. In May 2021 we had for example already reported about the investigations against a Maltese offshore company because of illegal revenue amounting to around 600 million Euro.

Is money laundering in online casinos too easy?

In the study of the Anti-Mafia organisation from Berlin, it was concluded that online casinos make it too easy for the criminals to conceal the origins of the money. During this study around 100 investigative procedures on the issue of gambling which were carried out in Italy during the past 25 years were evaluated. The relevant investigative authorities confiscated a total of 6.7 billion Euro. In most of the amounts (around 4,1 billion Euro) the criminals used online casinos based in in Malta to launder money. In an article we had published on GambleJoe in June 2021, we had raised the issue of whether BaFin is responsible for money laundering in the online gambling sector or not.

How does money laundering in an online casino function?

Of course, we do not want to convey instructions of how one can launder money in Maltese online casinos. It is however obvious that in many cases this can be done so easily. Many criminals for example, open a player account in an online casino, make deposits there, play just a little and after some time, they use a bank transfer to transfer the balance which is left in the account to their bank account. They declare the money transferred as casino winnings, and thus the whole amount which is transferred ends up in the legal economic cycle.

The authors of the Berlin Anti-Mafia organisation are suggesting that deposits are only done by bank transfer, direct debit or personal credit card. Using other payment options such as PayPal or Crypto currency make it difficult to understand where the money is going and to control money laundering. This will make it difficult to launder money.

EU regulations are too lenient – member countries themselves are responsible

There are currently already extensive EU regulations in place to prevent money laundering, especially in the sector of online gambling. However, in many cases these are not strict enough or can be easily circumvented. For this reason, the member states themselves are currently obliged to prevent criminal activities through the anti-money laundering regulations for online casinos.

Whereas for example Germany has comparatively strict regulations to prevent money laundering, the politicians in Malta have till now not amended the laws and regulations about money laundering. This is paradise, especially for the Italian Mafia groups who can launder their money and inject it in the legal financial circuit.

Since Summer 2021, the European Parliament has been discussing the amendments to the EU regulations on money laundering. In the coming months, the parliament wants to agree on a negotiating position and then be able to discuss things with the EU Council of Ministers. Therefore it will take some time till the EU regulations are adapted. The commissioner of this study, the European Member of Parliament Martin Schirdewan, is actually seeing that a lot needs to be done:

“to be able to combat money laundering in online gambling we need transparent rules which are EU wide. It is only in this way that we can track mafia clans – till now the EU has been asleep.” 

Conclusion

It is no secret that many online casinos which are based in Malta are wrongly used by Mafia groups to launder money. The EU parliament is discussing the introductio of stricter regulations. However till they are agreed on, it will still take some time. T the moment it is too easy for criminal groups in some EU states to launder their money and to bring the money in the legal financial circle. In the future it will not be so easy to disguise the origin of money, as is the case in some Maltese online casinos.

Image source: https://pixabay.com/de/photos/gangster-mann-mafia-kriminell-4146707/