Italian Mafia bust implicates Malta in illegal gambling scandal… again

Malta has made headlines for all the wrong reasons once again due to its online gambling sector as a new investigation revealed a mafia group, the Santapaola-Ercolano clan, had run an illegal betting empire while basing their servers in Malta.

‘Operation Double Game‘ by the Organised Crime and Corruption Reporting Project (OCCRP) investigated some 336 individuals involved in the online gambling scheme in Sicily, Puglia, Emiliana Romagna, Germany, Poland and Malta.

The criminals set up a sports betting site called RaiseBet24.com which, despite being unauthorised to operate in Italy, based its servers in Malta to bypass the rules. 

They then encouraged illegal ‘over-the-counter’ bets in Italy which gathered more than €62 million. These illicit funds were then funnelled into companies in Italy and Germany.

OCCRP reports that this is a common modus operandi for the Italian Mafia. It also notes that “Maltese online gambling is an infamous cash cow” for Italian criminals. They have infiltrated the market by making deals with the owners of legitimate sites, many of whom have incorporated in Malta due to its “favourable” fiscal regime.

Malta’s online gambling sector has been involved in a number of high profile cases in recent years such as Operation Beta, led by the Italian Carabinieri in 2017. This case was also linked to the Santapaola-Erculano clan and saw 30 people arrested as a part of a clampdown on illegal gambling and money laundering.

In the same year, Benedetto Bacci was arrested along with 31 others in an illegal gambling bust. He was believed to have entered into an agreement with the Costa Nostra from Palermo. The accused had been using a Maltese company, Phoenix International Ltd, to launder the flow of cash from illegal gambling operations.

In 2018, Italian authorities seized more than €20 million in assets from a group accused of managing an illicit online gambling business on behalf of ‘Ndrangheta. They seized Malta company and online gambling license holder Centurionbet and a number of bars and betting shops in Calabria.

Centurionbet allegedly entered into a commercial relationship with an ‘Ndrangheta associated company. Prosecutors said they were “well aware” of what they were doing. It’s reported the Maltese company made some €5 million in illicit profits from the scam.

A report published in 2018 by two Italian organisations claimed that Malta’s tax regime and its geographical proximity to Italy made it an appealing option for both legal and illegal businesses.

Dipartimento Investigativo Antimafia (DIA) noted that “thanks to a privileged fiscal system and a rapid process to set up a company, in the last few years, Malta attracted large investments, even from Italian criminal organisations”.

DIA reports from 2016 point to the same Santapaola-Ercolano clan and their involvement in weapon trafficking, fuel smuggling, and illicit gambling, all involving links to Malta.

Malta’s gambling industry has led to problems for other EU countries. Sergio Nazzaro, journalist and adviser to the Parliamentary Anti-Mafia Commission, told the OCCRP that this issue is being exported to countries like Poland and Germany.

He added that the COVID pandemic further exacerbated the issue. And it looks set to get worse. Estimates put the global value of the online gambling industry at $160 billion by 2026 giving ample opportunity to those looking to launder illicit funds.

In 2015, the Malta Gaming Authority said that 10 out of every 200 licenses were held by Italians. This was the same year they revoked the licences of nine companies including BetUniq, for links to the Calabrian Mafia. The OCCRP referred to Malta in 2018 as the “ATM for the Italian Mafia”.