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BlogEuropean Anarchy in the Gambling Market

European Anarchy in the Gambling Market

Lottery ticket and casino – that was once! Gambling mainly takes place on the Internet these days. The sports betting and non GamStop slots operators are often based in other European countries. They run a business that is bankrupting many people and is difficult to regulate.

Christian, whose real name is different, is in his early twenties when he gambles away his grandfather’s inheritance alone at the computer, intoxicated with blackjack.

In the previous months he had been fortunate and even doubled his fortune in online sports betting and online casinos.

He has lost the feeling for money and sums: “Since the deposit options are so extremely simplified, immediate transfer or with a credit card, you can deposit new money within seconds if you lose it.”

In his opinion, that’s the crux of the matter: “That you then play yourself into such a frenzy and quickly top up on further losses and try to make up for these losses again.”

Gamble, Lose, Lie .. The Chain of Playing at Non GamStop Casinos!

Christian quickly gets to the point where small sums of money are no longer enough for the intoxication. In search of the bigger kick, he becomes addicted: “The more addicted I became, the more I slipped into it, the less I then revealed, of course,” he says.

“Of course, you’re also ashamed of the big losses, and then, you kept the profits to yourself at some point. Of course, that’s also very dangerous if you don’t reveal anything to the outside world and get involved in all these lying constructs.”

The operators of the non GamStop casinos that Christian deals with are based outside of the UK, many in Malta. On the Mediterranean island south of Sicily, the word of the Catholic Church still carries great weight. So it is special when the Archbishop denounces the online gaming and betting industry, as happened a few weeks ago.

Daniel Darmanin, President of the Archdiocese’s Justice and Peace Commission, also takes this line: “The economy, our way of making money, should first and foremost serve the people. You shouldn’t make money with people’s weaknesses,” said Darmanin.

“We say: Let’s think about how we make our money. What’s behind the money we make?”

“Illegal Subsidies”

Tens of companies from the betting industry have settled on the island. No coincidence, says Green MEP Sven Giegold: “Malta has an effective tax rate on gambling winnings of five percent and below.”

Malta is dealing with the providers of sports betting and online casinos in a similar way as Luxembourg, the Netherlands and Ireland did with large, multinational corporations when they lured companies like Ikea, Starbucks or Apple with extremely low tax rates.

And that has to change, Giegold demands in an interview with Deutschlandfunk: “I call on the European Commission to conduct its own investigation into the area of online gambling because I assume that this is at least partly illegal aid from Malta acts in a tax sense.”

Malta attracts with a good infrastructure and with a very liberal regulation of the market, which allows – quote: “simple and uncomplicated to successfully set up a global business.” That’s what the website gamingmalta.org says, which is run by an institution backed by the government and the gaming regulator.

Growing Industry in Malta

Silvio Schembri, Deputy Minister for Financial Services and Digital Economy at the Prime Minister’s office, intends to bring companies to the smallest EU country by removing bureaucratic hurdles: “Online games are one of the main pillars of the Maltese economy,” said Schembri.

“iGaming industry makes up around 11 percent of our gross domestic product and has around 8,000 employees,” says the Maltese politician. “But that’s not all: this is part of an ecosystem for the digital economy. With a strong gaming economy, a strong IT and communications infrastructure, and a strong financial economy, we have everything we need to keep the digital economy growing in Malta.”

However, the online gaming industry does not always grow in the right direction, as it also attracts criminals. The Italian mafia has long since discovered that you can do good business and launder money via Malta.

Just a few months ago, the withdrawal of five online betting providers from Malta made the headlines because they were the focus of Italian anti-mafia investigations.

Last year, Palermo prosecutors uncovered some clans’ intention to invest heavily in the Maltese online gaming economy. The operation was appropriately titled “Game over,” and 30 people were being investigated.

Legal Gray Area

It is striking that the Maltese authorities usually first deny such connections and often only intervene when the evidence from abroad, for example, from Italy, is overwhelming.

James Scicluna sees it differently. The lawyer does most of his business in the online gaming and betting industry: “This industry, like many others, has attracted some undesirables. I can’t rule that out. But if you focus on that in Malta, you’re on the Wood way”, according to the lawyer Scicluna.

“There is always room for improvement. But if you look at the Malta Gaming Authority and how it compares to other regulators, it does very well in terms of its ability to assert itself and its actual intervention in the market.”

The business model that Malta and tax havens like Gibraltar rely on works mainly because the world of non GamStop casinos is a gray area.

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