Six betting companies accused of having links to the Calabrian Mafia are threatening to sue the Malta Gaming Authority for millions of euros after it suspended their licence.

Sources close to the gaming industry told The Sunday Times of Malta that the authority had been contacted by the Italians’ local legal representatives.

“If the Italians, who were extradited, are acquitted or there is not enough proof, they could sue the authority for loss of millions of euros in business,” the sources said.

The authority had taken action after gaming companies in Malta had their assets seized when Italian police swooped down on illegal activities linked to ’Ndrangheta two weeks ago and extradited six suspects.

The companies identified by the Calabria police are: Uniq Group, Uniq Shopping, Tebaral Holding, Teberal Trading, Betsolution4U Ltd, and Fast Run Limited.

The authority suspended six gaming licences when the news emerged, because they did not adhere to its rigorous “fit and properness” criteria to conduct business. However, at least two of these companies are still licensed in Italy, the sources said.

And with Italian football’s Serie A about to start in a few weeks, the companies involved are envisaging a loss of millions of euros which they would have normally raked in from betting predictions.

The authority maintains it had no choice but to act swiftly and suspend the operating licences, but many within the industry are now fearing that this will be used by international competitors bent on trying to dent Malta’s burgeoning online gaming business.

Described by EU officials in the past as “Europe’s gambling hub” – Malta has managed to attract nearly 300 online gaming companies due to its attractive legal taxation regime – the island has over the years fought against harmonised regulation. To date this sector makes up a whopping 10 per cent of Malta’s GDP.

‘It will not tarnish our industry’

Due to Malta’s success, sources said, many member states have been for years trying to influence new EU laws to restrict the market as much as possible and entice back companies, which relocated to Malta.

“A few European countries begrudge the island’s success so those trying to depict Malta as a tax haven will now attempt to foul-mouth us,” the sources said.

“Luckily, the industry is strong and it won’t be easily damaged. What it will do, is that those who have always looked upon Malta with suspicion will try to further fuel this perception.”

The Malta-registered gaming companies, which had their licences withdrawn over suspicions of money laundering and alleged links to the Italian Mafia had been through multiple extensive due diligence checks but no red flags were raised.

This sparked a controversy over whether the proper checks and balances were in place and if this incident threatened to put Malta’s reputation at risk.

Finance Minister Edward Scicluna on Thursday told the Times of Malta he would be looking into the way due diligence was carried out and if the government felt it had to strengthen the existing framework it would.

However, one local operator, who works with British and Danish companies, is not perturbed by what happened and he believes the due diligence process was rigorous. “The general feeling is one of business as usual and our shareholders have so far not reacted to this incident,” said Karl Buhagiar, director and key official of iGame Holding.

“It seems what happened is contained to a particular jurisdiction: Italy. I’d be more worried if players were not being paid. That would really put a stain on the industry,” he added.

When contacted, Malta Gaming Authority chairman Joe Cuschieri was also convinced recent events would not tarnish the island’s remote gaming industry.

“On the contrary, it will continue to thrive. This industry has come a long way from its inception and I have every intention to take it to the next level by learning from past experiences,” he said.

“With the reforms and innovative plans the authority has in the pipeline, I am confident Malta will remain a role model for others.”

Suspending the licences of those operators facing serious charges of organised crime by Italian authorities is a clear message that illegality and abuse will not be tolerated, according to Gaming Malta.

“Malta expects the highest levels of compliance from licensed operators, and Gaming Malta supports the actions taken by the Malta Gaming Authority to maintain the island’s reputation,” it said in a statement.

It urged stakeholders and authorities to evolve and adapt to the challenges posed by the growth of the iGaming industry. “While ongoing probity and due diligence checks and monitoring serve to ensure crime is kept out of gambling, the industry as a whole is encouraged to remain vigilant to ensure Malta’s reputation as a ‘home’ to gaming is not threatened,” it said.