Illegal parallel lotto estimated at €10 million

Investigators say millions in cash ends up being laundered in sectors where cash is king, like construction

File photo
File photo

An illegal lottery that is run nationwide and was first flagged during the arrest of the Caruana Galizia assassination middleman Melvin Theuma, is believed to be creaming off 30% of the legitimate market.

Financial investigators who follow the comings-and-goings of this lucrative game told MaltaToday the players behind this illegal ‘national’ lottery, have inherited the operation, or at least part of it, from Theuma himself.

Theuma turned State’s evidence after he was granted a presidential pardon to testify against the alleged mastermind in the assassination of journalist Daphne Caruana Galizia, back in November 2019.

Theuma had been under the eye of financial crime investigators that same year, when a raid on his property found – according to some press reports – over €2 million in cash stashed away.

But sources who are investigating financial crime believe such amounts are not unrealistic. “We estimate that 30% of well over €30 million that gets played in the legitimate lottery market every year, could be played in the illegal lotto,” one source told MaltaToday.

The illegal game is a parallel lotto, which comes with tickets, in which pundits stand the chance to win large amounts of cash – even higher than previous lottery prizes until years back.

The lotto is pegged to the national one, with players placing bets on a string of numbers and waiting for the national lotto winning numbers to be announced at the end of every week.

“The major operators of this illegal lotto are a few, but they each have a corner of the island or ‘districts’ that fall under their control, with their runners taking the numbers in the village bars and każini,” said one source with knowledge of the parallel lotto.

Investigators say the operators of the illegal lottery tend to be closely connected to the world of construction or property speculation.

“They all have legitimate businesses – they are well known in town, they can be respectable types who get snapped with local politicos in the village festa. But construction is important to them because it is a world where cash transactions are constantly used. And with the volumes of cash they collect on a monthly basis... well it has to be cleaned somehow, or in some cases given to charity, if it enhances their respectability.”

MaltaToday understands that property transactions concerning the suspects in Malta’s parallel lotto are under the eye of financial investigators, but the lotto itself tends to be ignored by local police. “The parallel lotto is a fact of life in the village bars where it is played – regulars have a tab with the runners, where they always play the same numbers.”

Over the last three decades, the operators of the illegal lotto have built reasonable cash floats that allow them to pay out their prizes when players win the numbers, but also by playing the same numbers with the official lottery as a kind of insurance. “They know which numbers tend to be played the most, or which are usually returned more frequently than others... so just a way of ‘insuring’ themselves against successful players, they play the same numbers themselves in the legitimate lottery.”

A veteran social worker who spoke to this newspaper also spoke of clients with regular gambling patterns on both the legitimate, and illegal lottery. “In certain village bars, people play their numbers in both the illegal and legitimate lotto... some have accumulated debts with the runners, and hope they will pay off their loans, naturally at usurious interest, when they finally win the big prize.”