Transcrime report: Malta still major hub of illegal gambling Luke Haward, CDC Gaming Reports · January 5, 2019 at 4:30 pm By publishing their landmark study MORE at the end of 2018, Italian research centre Transcrime has presented the international community with a truly valuable look into the Mafia’s continuing operations in the European Union. The project has revealed ongoing activities on both the macro and micro level related to organized crime, revealing corporate red flags as well as internationally mapping of activities. The research used in the report was conducted by a coalition of entities, including Germany’s SWP, Sweden’s Brå and EUROPOL, and funded by the European Commission. It builds on two previous studies, OCP and ARIEL. Some of the findings of the report, which incorporated data from 2010 – 2016, are quite revealing. In terms of prominent activity, Spain, Germany and the Netherlands ranked highest overall, with Malta, Luxembourg and the Netherlands ranking highest relative to population size. Malta was also singled out as a location favoured by Italian Mafia members on the run and was highlighted as a country of concern for all sorts of illicit activity, including smuggling of drugs, guns, oil and humans. Malta was also indicated to be a major centre of illegal gambling activity. Several contributing issues were identified: a higher level of financial secrecy than much of the rest of Europe, a high complexity of business ownerships, and a high percentage of shareholders listed in the EU blacklist of countries who are not cooperative on tax matters. The report also singled out the tax incentives Malta offers to incoming companies, including gaming firms, as a complicating factor. Malta and Italy recently agreed to tighten up their efforts in tackling organized crime. All well and good, but Malta’s office for asset recovery in organized crime is barely three years old and still not fully operational. The National Risk Assessment also released a review recently which concluded that the risk of money laundering and terrorist financing in Malta was still “medium to high”. Hundreds of remote gambling firms operate out of Malta, and with a collective GGR of around €3 billion there is plenty of room for illicit activity to go unnoticed. Without political will and investment in analytics and IT resources geared to this problem, this is going to continue to be the case. Over 90 percent of transactions in Malta are cash-based, as estimated by the ECB, so auditing activity is extremely challenging. Malta is a champion of cryptocurrencies, which will also need regulating at some point soon, yet until 2020 firms in this sphere will not be regarded as “subject persons” under the law and as such will not be required to put in place anti-money laundering measures. A number of other nations were singled out for detailed reports, including Germany, Italy and Sweden, and whilst the exploitation of opportunities for corruption and illegal activity within the gambling industry is certainly not limited to Malta, the island nation nevertheless has quite a lot of work to do.