Investigators Reveal Illegal Operation Dominating 30% of Malta’s Lottery Market

Reports from local media indicate that an unregulated lottery operation linked to the Malta National Lottery is illicitly capturing nearly 30% of the market, resulting in significant losses.

According to investigators, an illegal lottery operation in Malta has been found to be siphoning off as much as 30% of sales from the country’s official national lottery.

MaltaToday, a local news outlet, has reported that financial investigators stumbled upon the operation during their investigation into the 2019 assassination of journalist Caruana Galizia, which led to the arrest of Melvin Theuma. Theuma, who has turned state’s evidence in exchange for a presidential pardon, is believed to have passed on the illegal lottery operation, or a part of it, to its current operators.

“We estimate that around 30% of the annual turnover of over €30 million in the legitimate lottery market is being diverted to the illegal lotto,” revealed a source. This parallel lottery is linked to Malta’s National Lottery, with players betting on the same numbers and winning based on the official game’s drawn numbers.

The source further explained, “The major operators of this illegal lotto hold sway over specific areas or ‘districts’ of the island, with their runners collecting numbers from village bars and ‘każini’.” Many of these operators reportedly have ties to the construction and property market, maintaining legitimate businesses and even mingling with local politicians at village festivals.

“Construction is a significant part of their operations as it involves large cash transactions, which can help launder the sizable amounts of cash they collect on a monthly basis. Some even claim to donate to charities to enhance their respectability,” the source added. “The parallel lotto has become a norm in village bars, where regulars maintain tabs with the runners and consistently play the same numbers.”

The National Lottery of Malta

In July of last year, the Malta Gaming Authority (MGA) issued a new ten-year license for Malta’s National Lottery, awarding it to IZI Group’s National Lottery PLC, which replaced Maltco Lotteries Limited as the lottery operator. The exclusive rights were granted to the new operator after the government’s Privatization Unit released a Request for Proposals. A concession agreement was subsequently signed by the Ministry for the Economy, European Funds and Lands in March 2022.

This marks the first time in 18 years that a fully Maltese-owned company has operated the lottery, as IZI Group had previously participated in the bid in 2012 but lost to Maltco Lotteries. Maltco Lotteries, owned by Intralot, Associated Supplies Limited, and The Players Group (24%), had been running the Malta National Lottery since its privatization in 2003 but did not participate in the recent tender.