German prosecutor complains Malta-licensed gaming franchises are a backdoor for laundering drugs money

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2019-06-14T09:15:33+02:00Fri, 14th Jun '19, 09:15|0 Comments

German public TV NDR ran an investigation this week into links between sports betting shops in Germany and organised crime. The feature interviews the Chief Prosecutor responsible for organised crime in Frankfurt, Noah Krueger, who says his office is investigating whether several dozen betting shops have been used as fronts for operations laundering money for criminal activity particularly drugs trafficking.

The shops are operated as franchises for a large betting brand which the TV investigation identifies as Malta-based Tipico. Prosecutor Krueger, who does not himself name Tipico in his responses, says that whatever due diligence the franchise owners say they make before licensing a franchise holder, they are still allowing criminals to open up shops and possibly helping clean dirty money for organised crime.

“People who clearly belong to organised criminal organisations are operating sports betting shops. We have strong evidence that suggests drug money is laundered there. Proper due diligence does not seem to have happened at all. If you take a more serious look at the people operating these shops, it would be obvious to anyone that these are at best shady characters”.

Prosecutor Krueger complains that in effect, he cannot police gaming companies properly because he has no jurisdiction over Malta licensed gaming organisation. Maltese rules allow for insufficient due diligence and easy to exploit franchising contracts that enabled the infiltration of Tipico’s shops by organised crime.

Indeed Tipico tells the investigators that its contracts with the shop operators in Germany “are known to the Malta Gaming Authority”.

The report says that Malta’s licensing regime is allowing bookmakers in shops throughout Germany to offer criminals good business opportunities.

The report, in German, is by NRD’s Markus Reichert and Willem Konrad.