The Malta Gaming Authority (MGA) is set to conduct a thorough review of all its Italian licensees in an effort to sever the embarrassing ties between Malta-licensed betting sites and organized crime in Italy.
According to the Malta Independent, the MGA will be “reviewing and scrutinising certain business models” of its Italian licensees after yet another round of arrests of license-holders by Italian police.
The Malta Gaming Authority suspended the license of one Phoenix International, Ltd earlier this month after police raided dozens of internet cafes in Italy that were connecting gamblers to sites owned by Phoenix International. Italian police also arrested Benedetto Bacchi, also known as the “betting king,” during the operation.
The illegal betting ring reportedly earned upwards of €1 million a month and some of the earnings were kicked back to Italian mafia members. Local media sources estimate that between €300,000 and €800,000 was distributed back to Cosa Nostra members every year through this operation.
That leaves the Malta Gaming Authority, which likes to tout itself as a serious and trustworthy gambling regulator, with egg on its face. One of their own licensees was not only running a massive underground gambling organization in another country, but he was also funding the murderous Cosa Nostra. Perhaps worst of all, betting websites licensed by the MGA were used to perpetuate the scheme.
In response, the Malta Gaming Authority has begun a licensing review process that will be paying special attention to licensed operators with ties to Italy. A response from an MGA source said one of the regulator’s top priorities is to keep the gaming industry free of crime.
The source told the Malta Independent that “the risk profile of certain business models adopted by Italian licensees and operators is currently under review and ‘enhanced security’ in order to address potential future risks to the Maltese jurisdiction.”
Same Old Story with the MGA
This is not the first time the MGA has been linked to organized crime. Back in 2015, Italian police broke up a massive international gambling ring and seized more than $2.5 billion worth of assets. ‘Ndrangheta members were reportedly among those arrested during the sting.
It was revealed at the time that the group operated dozens of gambling sites, many of which were licensed by the MGA. How the MGA manages to continually miss the ties between prospective licensees and powerful criminal groups remains a mystery, but the coincidence is too strong to ignore. Something needs to change.
What makes the story particularly vexing is Malta’s status as a major regulator. A license from Malta is generally viewed as a good thing among players and industry types alike. The MGA has licensed some of the world’s biggest brands and yet it can’t stop making sloppy licensing decisions.
To be fair, the issue may extend well beyond the Malta Gaming Authority. Malta as a whole has been targeted by criminal elements from Italy looking to clean their ill-gotten gains. Whether it is setting up shell companies in Malta or targeting the island’s gambling industry, the Italian mafia has taken a liking to Malta.
The Times of Malta also reported in December of mafia plans to specifically target the Maltese gaming industry. While Italian police have their hands full dealing with the mafia at home, criminal groups have sought to set up operations in Malta to launder dirty money through online gambling.
To the credit of the Malta Gaming Authority, they do seem to have an interest in cracking down on such abuses of the industry. Just today, the Times of Malta reported that the MGA is looking to strengthen ties with Italian police forces in order to combat mafia activities in Malta.
One challenge the MGA noted recently is its lack of law enforcement capabilities. The MGA says it does try to monitor licensees, but does not have the same access to intelligence and other resources available to actual law enforcement organizations.
One source with the MGA put it this way:
“The problem is there is no collaboration between the Italian authorities investigating the Mafia, the Malta police and authorities like us. We are literally kept in the dark and find out what’s happening from the Italian press.”