MALTA’S IGAMING INDUSTRY URGES URGENT ACTION AGAINST CORRUPTION

A body representing international gaming companies operating from Malta has urged authorities in the tiny Mediterranean country to take “clear and decisive” action against corruption. 

IGEN (iGaming European Network) has warned that corruption in Malta is now causing real damage to the sector, with the island’s high-profile corruption cases attracting international media and political attention, resulting in “higher costs, an increase in operational complexity, loss of business and substantial reputational damage.” 

IGEN’s membership includes Aspire Global, Betsson Group, GiG, Kindred, Catena Media, Mr Green, LeoVegas, Entain, Casumo, Raketech, Bethard Group, VideoSlots, ComeOn, Tipico, Betway, NetEnt, Genesis, SuprNation, Trustly, Microgaming, Hero Gaming, Greentube, Gamesys Group, Singular, and Relax Gaming.

The association said it backs the Maltese police and judiciary in their efforts to investigate corruption, and has urged authorities to prosecute any guilty parties to the fullest extent of the law, with iGEN Chairman, Enrico Bradamante, saying: “We are satisfied to see that the relevant institutions have started to take decisive action against these claims, but much more remains to be done. Anyone who is or was involved in corruption and graft must be held accountable, and a clear message must be sent to demonstrate that the law applies to all without fear or favour.”

Down the Rabbit Hole on Corruption Island

Though Malta has long been known as a hotbed of political and commercial corruption, the past year has seen investigators uncover shocking levels of crime, involving some of the island’s most prominent business people and officials. 

From the arrest of business tycoon Yorgen Fenech in November 2019 in connection with the murder of investigative journalist Daphne Caruana Galizia (who uncovered extensive Maltese connections to the so-called ‘Panama Papers’ scandal), as he attempted to flee the country on his yacht, to the recent criminal charges levied against former Malta Gaming Authority (MGA) CEO, Heathcliff Farrugia, for his dealings with Fenech, the country is facing a growing corruption crisis. 

Indeed, Farrugia isn’t the only official who has been accused of being far too close to Fenech. Local newspaper The Times of Malta also revealed that former head of the Malta Financial Services Authority (MFSA), Joseph Cuschieri, had gone on an all-expenses paid trip to Las Vegas with Fenech. Cuschieri, who was forced to resign after details were made public, had previously been head of the MGA. 

If that wasn’t bad enough for the MGA, it has also emerged that the MFSA’s legal counsel, Edwina Licari, who previously served with the gaming regulator, had drafted a letter for Fenech, regarding an application to expand his Casino. Licari also accompanied Fenech and Cuschieri on their Las Vegas trip. Despite this, Licari is denying any wrongdoing and is still with the MFSA. .

However, the web of corruption in Malta expands far beyond gaming. Keith Schembri, former chief of staff to former Prime Minister, Joseph Muscat, along with ten others have also been charged with corruption and money laundering, among other things, after police traced millions of dollars in dodgy transactions and backhanders relating to the sale of printing machines. 

And, things could get a whole lot worse as investigators continue to follow trails. Vincent Muscat, who is now serving a fifteen-year prison sentence after confessing to murdering Daphne Caruana Galizia, has alleged that a former Maltese government minister has also involved in a plot to murder the journalist. 

All of this comes at a time when Moneyval is deciding whether or not to greylist Malta, which as previously reported, could effectively destroy the nation’s financial services and remote gaming industry. 

AYO.NEWS says:

Malta really is on a knife edge. For years it has enjoyed incredible economic growth, driven by mass tourism, iGaming, and financial services. Indeed, until last year, the iGaming industry contributed around 13% of Malta’s GDP. However, since the utter decimation of the country’s tourism sector due to the COVID-19 pandemic, its relative importance has no doubt increased significantly.

At the same time, the iGaming industry is changing, and Malta’s inherent appeal is facing other challenges too. Firstly, as more countries regulate and introduce their own gaming licenses, the value of a generic license like Malta is undeniably diluted. 

Secondly, Malta’s long-time rivals are upping their games. In the Caribbean, Curacao is forming a new regulator and vowed to bring its standards in line with the Netherlands. Though this may scare off dodgy operators, it could make it more attractive to legitimate players, like those currently based in Malta.

Meanwhile, in the Irish Sea, the Isle of Man, which has handled the COVID crisis far better than Malta, and has a much better reputation in terms of integrity, is investing heavily in infrastructure and services, for example setting up Digital Isle of Man – which has resulted in a significant increase in license applications over the past year. 

Thirdly, even before the COVID-19 crisis, Malta-based iGaming companies were starting to find recruitment challenging. With rents rocketing, infrastructure buckling, and the local environment being destroyed, companies found they couldn’t easily tempt and keep talent from elsewhere in Europe with the promise of a cheap, relaxed life in the sunshine anymore.

Maybe the COVID-19 crisis, which may still have a long way to go before its over, will serve as a wake-up call for Malta to clean up its act and reassess its economy? To ensure a long-term future for the gaming industry, the country needs to focus on creating a better environment in every way. But, is it too late?