Malta sees igaming suspicious transaction reports double in 2019

The annual total of 1,445 represented a 106.4% increase on the 700 reports recorded in 2018, while the FIAU – an agency of the Maltese government – also noted that in the five months to May 2020, a further 741 reports were received.

This represented the fifth consecutive year of an increase in the number of STRs filed with the FIAU, with this having risen each year since 2014, when just 22 reports were raised.

Three – unnamed – companies were responsible for filing 32% of all STRs in 2019, while five other companies raised 35% of the reports. The remaining 33% of STRs were put forward by 72 entities, with 29 remote gambling operators having filed one report during the year.

According to the FIAU, the main reason for filing STR reports was concern over a transaction, which accounted for 46% of all reports. Here, the FIAU said that the main areas of concern were unexplained transaction activity, large deposits not in line with usual behaviour, complex transactions and chargebacks.

Some 21% of STRs were related to behaviour, including when the customer failed to provide details and documentation on request, while 16% of all STRS in 2019 were for identification and verification process and documentation issues.

In addition, 3% of reports were for adverse media and the other 2% were due to the involvement of high-risk jurisdictions.

Looking at suspected offences, most of the STRs did not give a specific infraction, with 46% being filed at ‘unknown’ and another 16 as ‘other’. Some 26% of STRs listed fraud as a possible offence, with 3% each for forgery, tax crimes and theft or robbery, with 4% related to illegal gambling.

In terms of the amount of money involved, while 46.0% of cases were unknown, 9.2% were in excess of €1.0m (£902,217/$1.2m), 17.1% between €100,000 and €1.0m and 6.9% between €50,000 and €100,000.

Aside from the figures, the FIAU presented a number of case studies to illustrate some of the issues facing operators.

One young player with a declared annual income of around €30,000 deposited approximately €250,000 in 2019, with amounts ranging from €10,000 up to €36,000. They claimed they were a successful poker player, but the bulk of the individual’s gambling spend was on sports betting.

The FIAU said that the customer’s source of funds and wealth could not be established, and as the known income of the customer was inconsistent with the level of funds going through the account, the case was raise as an STR.

Another case saw an operator review of one customer’s activities in response to a law enforcement enquiry. Initial online searches indicated the customer was involved in an online fraud, while further analysis showed the use of multiple accounts by the customer.

The client deposited mostly from prepaid cards, remote gaming partners and his own account, while he played using significantly low odds, short combination lengths and placed bets on non-European football. Instead of being withdrawn, the deposits were being lost on these bets.

Last month, the Malta Gaming Authority (MGA) launched a new tool allowing licensees to report suspicious betting activity to the regulator’s dedicated Sports Integrity Unit.

The Suspicious Betting Reporting Mechanism (SBRM) is available to all Malta-licensed operators that offer sports betting.