Gambling/betting companies are keen to explore the eSports market, where video games are played competitively for both online and in-person audiences.  ESports are increasing in popularity, and are widely considered to be the fastest growing “sport” market in the world. Cue this week’s announcement by UniKrn, who recently concluded their ICO raising $100 million, that they have been awarded a gambling license in Malta.  Their utility token is being used as a medium for real-money betting in licensed jurisdictions on their platform and eSports is one of their target growth markets.  UniKrn also will provide B2B services to other providers to use their platform for marketing, sponsorship and events.

Off-shore/on-shore destinations such as Malta, Gibraltar and Isle of Man offer favourable regulation and taxation structures.  Until Brexit, the playing field between these small states was relatively balanced with each focusing on gaming, taxation and/or niche financial services. Fast forward to the world post-Brexit and Malta finds itself the smallest EU member state and therefore still connected to the European Union, the single market and financial services passporting. The Malta Gaming Authority announced a change to its regulatory framework for gaming earlier this year, exempting B2B licensees from gaming tax, thus increasing Malta’s competitiveness as a hub for these service providers.  This change will benefit companies, like UniKrn, that provide services to other B2B businesses through their platform. For Betting and eSports platforms looking for favourable tax and regulatory jurisdictions for gaming and ICOs, Malta has a very clear competitive edge.

However, there is a darker side to Malta and its off-shore designation.  On Monday this week, the journalist, Daphne Caruana Galizia, who led the Panama Papers investigation into corruption in Malta, was killed by a car bomb near her home.  Malta’s past corruption and violence are still very much alive and well under the surface veneer of respectability.  As a journalist she highlighted corruption and questioned the establishment and underworld figures that still hold sway in Europe’s smallest member state.  Her death is a huge loss to investigative journalism around the world and her courage, an inspiration to us all to speak the truth.

Malta is a new Panama in the heart of the Mediterranean. A tax haven where money from rackets, extortion, drug trafficking courtesy of the Italian Mafia can be laundered. There is no need to go through customs or board planes.  A briefcase stashed with cash, which arrives by boat, or often even just a wire transfer, and money launderers are set: millions of dirty euros can be reinvested in the legal economy. Once laundered, that money can even yield a profit and pay very low or non-existent tax. More importantly, it is a secure system, because Malta is a member country of the European Union, with the euro as their currency, and no one checks if you are arriving from Italy because of freedom of movement. Malta is the perfect destination to launder money through legal business structures such as gaming.

Utility tokens used on betting platforms are in many ways the perfect vehicles through which to launder money from criminal activities, clean it and exchange via crypto back into fiat currency. In the wild west of ICOs and tokenisation, I can’t be the only one who noticed.

Sign up for ICO News and Updates

Join our mailing list to receive the latest ICO/Crypto news and updates from our team.

You have Successfully Subscribed!

Share This