EU Online Casinos Key Mafia Laundering Tool, Says Study

December 22, 2022
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There are few better tools than online casinos for criminals to launder their illicit funds, according to a new study on money laundering in the European Union.

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There are few better tools than online casinos for criminals to launder their illicit funds, according to a new study on money laundering in the European Union.

Commissioned by Martin Schirdewan, MEP and chair of The Left in the European Parliament, the study was produced by Mafianeindanke eV, a Berlin-based NGO established to tackle mafia activity in the wake of the 2007 Duisburg killings, where six people were shot dead as part of an ongoing feud between two rival Italian gangs.

“The study only shows the tip of the iceberg and only gives an idea of the worrying extent of cross-border money laundering risks in European online gaming,” Schirdewan said.

The German wants his fellow MEPs to “wake up” and introduce EU-wide specific transparency rules to combat money laundering in online gambling.

“The Union has slept through this so far. Therefore, in the current renegotiations of European money laundering legislation, I am fighting for effective transparency rules that enable us to keep track of the mafia clans,” Schirdewan said.

The study was released on December 19, the same day as the European Parliament discussed the European Commission’s package of legislative proposals from 2021 aimed at strengthening the EU's anti-money laundering (AML) and anti-terrorist financing rules.

The study calls for every element in the payment chain to be transparent and understandable for gambling regulators as “this is already standard in the payment transactions of banks and other payment institutions in the EU”.

The EU plans to establish a new Anti-Money Laundering Authority next year to address some of its current concerns. However, details on its precise remit are scant.

In the study, Malta is described as the “Eldorado” of online gambling, due to its low fees and favourable tax rate. However, the island’s financial service framework, including non-transparent cross-border payments, is described as “worrying” when it comes to AML efforts.

The island was subject to Financial Action Task Force blocklisting over concerns around its lax money laundering policies, but exited the list earlier this year after making what the watchdog's president described as “significant progress.”

The Schirdewan study was based on the evaluation of around 100 Italian investigations into illegal gambling connected with money laundering over the past 25 years.

Its authors conclude that between 2015 and 2022 Italian mafia organisations laundered billions of illegally generated assets via online gambling in Malta.

According to the study, “from the €6.7bn of assets that were confiscated in the investigations, €4bn alone came from investigations into online gambling related to Malta. A massive amount of bloody money that 'Ndrangheta, Camorra and Co (Italian mafia) are trying to cover up via online gambling and funnel back into the legitimate economy. Notorious names from Germany such as Wirecard also appear prominently in these investigations.

In Malta, “several platforms with a variety of betting sites were either attacked by the criminal organisations or were connected with them. Mafiosi also managed to use established companies for their purposes."

To address these concerns, the study urges the Malta Gaming Authority to “prevent criminal companies from infiltrating the gaming industry, monitor the business activities of the licence holders and ensure the regularity of gaming operations”.

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