Mario Galea and the Malta Lotteries And Gaming Authority: the continuing corruption of this puppet online gambling licensing body

This is a follow up to the previous Malta LGA article I wrote for Midas Oracle earlier this year, and a re-working and extension of the Mario Galea and the LGA article on my own site a few weeks ago.

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Since my previous articles, I should point out that there have been some changes pertinent to the title: Mario Galea has resigned from his position as CEO of the LGA. Why this is I do not know.

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In those articles I highlighted the case of the Malta-based bookmaker Betchance, apparently insolvent and offering to make partial settlements to players, in the region of twenty five to thirty percent of their balances, upon the signing of a potentially highly compromising and unsatisfactory contract. None of these players have received any money that I am aware of.

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Although Betchance continued to maintain a full Maltese Class 2 license all this time, there were two facts which one could at least hesitatingly class as a demonstration of quasi-integrity: the bookmaker was not accepting new customers, and they were not actually denying their debts. In addition, the Lotteries And Gaming Authority, though almost totally silent on the matter, were also not denying that these players were owed.

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Since then things appear to have changed, and not in the players’ favour:

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Betchance, apparently insolvent and semi-closed, is now fully up and running, accepting new players and taking bets. In fact, business as usual. This is odd, considering that the situation which caused their insolvency – insufficient funds to pay players – does not appear changed in the slightest, no players having been paid.

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So did something change?

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Yes. But not the substantive facts of the matter. What changed was the spin the LGA have now chosen to put on it.

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The following was reported by Bookmakers’ Review in late October 2008:

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At the recent European iGaming Conference in Barcelona, Galea told some industry operators, worried about news that several Maltese bookmakers were in financial distress, that stories on internet sites like Bookmakers Review are all lies and that at Betchance it is business as normal, with payments to players being made correctly.

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Furthermore, according to Galea, there is an international police investigation into players accused to have defrauded Betchance.

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Then earlier this week, an employee of a popular Maltese bookmaker, who on my behalf tried to get an answer about why Betchance is still allowed to operate, was told by Mr Galea the same story about players being investigated for defrauding Betchance. Galea also invited this person to stick to what he knew if he wanted to last in the gambling industry.

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So, to summarise these jaw-dropping remarks made by Mario Galea, the (then) LGA CEO who until reasonably recently was owner of BellMed, a company which provides internet facilities to the sportsbooks “regulated” by the LGA and who, it is rumoured, is still involved with the company:

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1) Betchance is paying players.

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2) The players who claim to be owed are liars, against whom there is an international police investigation.

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3) If anyone says anything against Betchance or any other Maltese sportsbook, they’d better watch out.

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Examining these remarks in order:

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1) Betchance is NOT paying players. Bill Dozer, head man at Sportsbookreview, has chronicled the events in his Betchance news updates, and at no point have more than sporadic payments been made. Betchance still appears to owe a minimum of $100,000 USD. This is not guesswork on the part of Bill Dozer, who researches and corroborates his information before going to press.

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As such, Galea’s comment about Betchance “paying players” was a total fabrication – unless, of course, Galea actually meant “paying the few select players they choose to pay and ignoring everyone else”, in which case the remarks probably contain more than a grain of truth.

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2) The players are not “lying”: see above comments. The facts of the individual cases have been investigated, corroborated and chronicled by a highly credible source: Bill Dozer of SBR. The circulation of a partial payment agreement is a matter of public record. Why was Betchance offering to pay players a percentage of balances if those balances don’t actually exist or were “fraudulent”? Why did Betchance claim to be “working on the problem”, with apparent new investors lined up, if the players were fraudulent and, as such, not owed, and there was no problem in the first place?

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Again, Galea’s comments appear nothing more than utter fantasy. As to the “international police investigation”, there is no corroboration of this from any source other than Galea’s Barcelona outburst, and I suspect it is equally fictional.

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3) Yes, I suspect that you had better watch your back if you question the liquidity of sportsbooks in Malta – the Lotteries And Gaming Authority may well have high contacts in low places. I’m sure this is not a fabrication on Galea’s part. However, how is the Maltese situation, in reality?

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Here’s a little more recent history:

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“Waubet”, another holder of a full LGA Class 2 license, was defunct as of September 2008. According to the message on the homepage, it will be paying fifty percent of player balances. Of course, that message has now been there for over four months.

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So, another Maltese sportsbook where at best half of players’ funds are gone.

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“Bettingstar 24″ was also defunct as of September, according to Bill Dozer’s Bettingstar24 updates. This latest Malta casualty has now, however, been taken over and appears to be paying.

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The security of Maltese sportsbooks does not appear all that good at all, with two books folding in the space of a month and at least one other fully operational again whilst not paying players. As such, Galea’s pugnacious and threatening attitude, with dark hints at the risk to people’s livelihoods if they question the viability of Maltese operations, was almost certainly bourne out of the fear that these prognostications are correct.

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My advice with regard to gambling operations “licensed” by the Malta LGA: if you know the book from long experience and are confident with it, play there – play there whether it’s listed by Malta or not. If you do not, do NOT patronise ANY bookmaker which is supported only by the Malta LGA.

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It could be a very expensive mistake.

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Since Mr. Galea is now no longer involved with the Malta Lotteries And Gaming Authority, I think he is deserving of a fitting epitaph in recognition of his services. I offer this in the form of two articles, written for Malta Today by journalist Matthew Vella:

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Authorities declare Gaming Chief Executive is free of conflict of interest

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Gaming chairman defends employees’ past connection in industry

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I only discovered these articles two days ago, but they add corroborative detail to my previous comments about a belief expressed by Maltese sources that Mario Galea may not have divested himself as entirely as one was led to believe of his investments in Bell Med, the company he owned which provided internet service facilities to companies located in Malta and which thereby represented a substantial conflict of interest.

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…outside the orbit of Malta’s leading internet gaming service provider Bell Med Ltd, reputedly the technical service provider of choice for 70 per cent of Maltese-registered internet gaming operators, questions are asked of whether Galea, formerly the owner of Bell Med, has indeed disposed of his interests in the company in a way that places him above suspicion.

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It would appear that Galea’s interests in Bell Med were divested through a nominee company called “Knights Corporate Business”…

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…a legal structure for trustees to act on behalf of clients which do not wish to have their names appear on paper. As directors of Knights Corporate Business, Gatt, Galea and Privitelli appear as the trustees for whoever owns Computer Aided Technologies, and for that matter, Bell Med Ltd.

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The articles go on to say:

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The transfer of Mr Galea’s shareholding to a nominee company has been made according to all legal provisions and does not give rise to any suspicions…”

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But what about passing the test of being “above suspicion”?

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It remains for the rest of us to speculate on whether or not Mario Galea did, in fact, divest his conflict of interest effectively to… himself. And since the company into which the interest was transferred was one that specifically hides the clients’ identities, there is little to allay the suspicion. This certainly appears to be what journalist Matthew Vella is alluding to.

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If this were the case, then since its inception in 2004 the Malta Lotteries And Gaming Authority would have effectively been “regulating” those exact same companies with which its CEO had a continuing business relationship as an internet facility service provider.

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Which is, I believe, a “conflict of interest”.

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As such, we should maybe not be too surprised when the legitimately owed players of an insolvent sportsbook are referred to as “liars”, irrespective of the independent corroboration of their cases by one of the industry’s most trusted sources.

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It would be equally less than eyebrow-raising to discover that said insolvent, defunct sportsbook was still fully licensed by the LGA, open and accepting deposits.

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And we can probably also avoid having to pick our jaws up from the floor when we hear the former LGA CEO telling people to watch their backs if they choose to question the integrity of Maltese-licensed operations.

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Best of luck for your future career, Mario. May you always be treated with the same level of integrity that you demonstrated during your time with the Malta Lotteries And Gaming Authority.

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