Multi-million euro illegal gambling activity remains unchecked in Malta

Investigation reveals illegal transactions carried out in broad daylight and in public places with no action from the authorities.

 

An ongoing investigation by The Shift has uncovered a thriving illegal gambling industry with sophisticated networks across the island and a multi-million euro turnover, which is seemingly ignored by law enforcement authorities despite pressure from Moneyval for Malta to clean up its act.

The police, the Malta Gaming Authority (MGA) and the anti-money laundering watchdog (FIAU) are doing next to nothing to rein it in. The Shift’s investigation was spurred by the reported discovery of some €2 million in cash during one of the police raids on Melvin Theuma – the middleman turned State witness in the assassination of journalist Daphne Caruana Galizia.

The probe has so far unearthed a sophisticated network of professional bookies, spread all over the island, with ‘runners’ taking illegal bets on their behalf on three particular gambling areas: lotto, lotto on the Super 5 games, as well as international football and horse race betting televised from France and the UK.

For clandestine lotto and lotto on the Super 5 games, bets are taken in parallel with the official national lottery games run by Maltco. For betting on football and horse racing, illegal bookies run their activities from public places in broad daylight, including from bars and restaurants, known to those connected to the gaming industry and the police.

Official statistics show the Maltese are avid gamblers, with bets reaching a staggering €130 million a year, according to the latest data. Industry experts have told The Shift that the ongoing clandestine illegal gambling industry is estimated to have a similar turnover to the highly regulated industry.

“Illegal gambling has been taking place in Malta for decades. The problem is that it is increasing, and the authorities seem not to be too keen to control it. This means that the exchequer is losing millions in gaming taxes every year,” sources in the gaming industry said.

“It is also known that proceeds from the industry are used in other criminal activities including money laundering and the drugs and smuggling trade. Those involved in running the illegal gambling are all well-known individuals also involved in all the other main criminal activities,” another source with experience in law enforcement said.

In court last November, Melvin Theuma admitted that he “was always involved in illegal gambling”. He was known to be one of the bookies with a multi-million euro income normally ‘laundered’ through the acquisition of real estate and property.

Melvin Theuma

Melvin Theuma, pictured here with former Prime Minister Joseph Muscat’s chief of staff Keith Schembri, was given a government job despite his illegal activities being an open secret.

Low number of reports and prosecutions

The lack of action by the police and the MGA is evident from the low number of prosecutions during the last years.

During the past six years, the MGA has filed only 36 reports of alleged illegal gambling activities to the police, according to replies given to The Shift. Reports by the MGA then decreased further, with no reports made in 2019 and just two last year.

Prosecutions too have been exceptionally low when considering the size of the underground industry.

While a police spokesman said raids are conducted regularly in areas known to be connected to the illegal gambling industry, this is not reflected in the number of people accused of crimes connected to clandestine gambling.

Since 2015, only 26 individuals have been charged with illegal gambling activities, or just four per year.

Industry sources claimed that the real problem is the “lack of will by the police to eradicate this illegal industry”.

“This activity is not complicated to control as it is mostly done in public, by known people and using mobile phones. If the police were serious about tackling the growing problem, they could use the MSS (Malta Security Service) and gain the evidence necessary to put an end to this rampant abuse,” The Shift was told.

The Shift is informed that scrutiny by the international anti-money laundering body Moneyval on this clandestine industry is also increasing, particularly due to Malta’s reputation as an online gambling hub as a result of hundreds of remote gaming operators on the island.

                           
                               
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