Italian gaming interests becoming more high-risk

Enforcement agencies spend years working on an investigation utilising tools and mechanisms including phone interceptions, secret services and controlled delivery of certain offences to get to the bottom of things and the ultimate beneficiaries who do not result anywhere on paper, having clean individuals fronting them

Palermo police arrested 'betting king' Benedetto Bacchi, an operation that led to the suspension of the Malta betting licences for products owned by Phoenix International Ltd.
Palermo police arrested 'betting king' Benedetto Bacchi, an operation that led to the suspension of the Malta betting licences for products owned by Phoenix International Ltd.

The Malta Gaming Authority is treating gaming companies hailing from Italy with clear caution after a spate of anti-mafia crackdowns has led investigators to gaming outfits based in Malta.

Already three police investigations in Italy led to the shuttering of gaming companies with Italian ownership in Malta, after connections between licensed gaming companies here with organised crime in Italy were revealed.

In a comment to MaltaToday, the executive chairman of the MGA, Joseph Cuschieri, said the authority was now open to collaborate with the Italian anti-mafia commission and any other law enforcement agency “to iron out any concerns or misunderstandings in order to keep gaming free from crime.”

He said it was too early to comment on what type of collaboration the authority was carrying with Italian police, after reports emerged that the MGA was carrying out its own probe into Italian-owned gaming firms here.

“The MGA follows its own supervision, compliance strategy and intelligence gathering within a risk based approach covering the whole spectrum of licensees. Needless to say when a company is at the centre of any media attention, enhanced investigations are carried out and prompt action taken. Our risk appetite is very low hence we don't take any chances.”

In 2015, the Italian police busted an entire online betting network of companies, part of which was headquartered in Malta, with direct connections to the ‘Ndrangheta, the notorious Calabria criminal organisation. Calabria police had described 41-year-old Mario Gennaro of gaming brand Betuniq, who was registered at a Pendergardens address at St Julian’s, as the mastermind behind the web of illegal online betting and gambling in Italy on behalf of the ‘Ndrangheta.

Then in 2017, the MGA suspended the licence of another Malta-licensed gaming company, CenturionBet Ltd, which operated the Bet1128 brand, after having already been alerted to the firm’s criminal ties in both the Italian and Maltese press.

CenturionBet – through the services of crime associate Francesco Martiradonna – was accused of having granted access to its online system to the company Kroton Games, which has connections to the ’Ndrangheta’s Arena clan, so that it could transfer large amounts of cash. The crime syndicate reportedly earned €1.3 million over a 17-month period for allowing CenturionBet to set up internet-connected retail operations on ’Ndrangheta-controlled territory.

And earlier this year, the MGA suspended the licence of Phoenix International Ltd, which operated several online betting sites, including B2875.com, Bsport24.com and B28sport.com, following a raid in a Palermo anti-mafia operation that arrested ‘betting king’ Benedetto Bacchi.

Cuschieri said the MGA was using every opportunity to review its processes and systems and see whether things could have been handled better.

“Having said this, one must note that the intelligence which is in possession of agencies like the police force and the anti-mafia are singular and given the sensitivity of such cases no information is shared with any regulatory authority.

“Such enforcement agencies spend years working on an investigation utilising tools and mechanisms including phone interceptions, secret services and controlled delivery of certain offences to get to the bottom of things and the ultimate beneficiaries who do not result anywhere on paper, having clean individuals fronting them. The latter mechanisms are not available to any regulator and hence we resort to other forms of intelligence where possible.”

Cuschieri said there will always be a level of risk for crime infiltration “like in any other sector”, and insisted that keeping gaming free from crime was one of the MGA’s objectives. “Prohibition would only drive such services underground,” he added.

Cuschieri said gaming remains a lucrative industry and the risk of infiltration by certain organisations appears to be heightened.

“One needs to be more vigilant and carry out enhanced checks in order to minimise this risk,” he said.

In 2016 there was a significant increase in suspected transaction reports from investment services licensees and remote gaming companies to Malta’s Financial Intelligence Analysis Unit; the majority dealing with non-Maltese nationals or foreign companies. One of the predominant ways of using the remote gaming industry to launder money was chip dumping – the intentional loss of chips to another player, especially on a virtual poker table.

In one case, considerable amounts of cash denominated in high-value notes were exchanged into gaming chips in a casino and then changed back into lower-value notes in what appeared to be an attempt to break down the proceeds of crime into more usable denominations.

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