Malta-based gaming firm accused of failing to declare €4 billion taxable income

Updated to include SKS365’s response.

Italian police have accused scandal-stricken online gambling company SKS365, registered in Malta, of evading €124 million in taxes.

The Italian authorities found that SKS365 had failed to declare some €4 billion in taxable income between 2015 and 2016, derived from “carrying out gambling activities illegally in Italy”, according to a statement by the Guardia di Finanza.

The company, registered at a St Julian’s address, is already the subject of an ongoing investigation into links with the Italian mafia. Last November, two men leading ‘Ndrangheta clans were arrested in Reggio Calabria on charges linked to Malta-based gaming firms.

Read: Further arrests in anti-mafia probe involving Malta-based gaming firms

The two men, Carmelo Consolato Murina, 54, and Giuseppe Pensabene, 42, were accused of money laundering, tax evasion, and operating unlicensed betting parlours. Yet, the company still has an active operating licence issued by the Malta Gaming Authority, according to the online register.

The report issued by the investigating body, the Guardia di Finanza, gives the operator 60 days to submit a reply. A decision will then be taken on the amount to be paid.

SKS365 management told The Organized Crime and Corruption Reporting Project (OCCRP), the network of investigative journalists investigating the activities of the company and those of its subsidiary Planetwin365, that the current management had no links with the company prior to 2016.

That year, SKS365 was acquired by a Dutch company Ramphastos Investments for €158 million. The management said legal action would be taken against the previous owners, the OCCRP reported quoting an investigating police offer who described it as “the largest ever tax evasion claim issued against an online gambling company in Italy”.

During the corporate acquisition of a business, an intensive and far reaching due diligence exercise is usually performed, designed to reveal any issues, discrepancies, liabilities, or illegalities. Questions have been raised on the due diligence conducted before SKS365 was purchased, and how €4 billion of revenue was missed.

The claim was issued following a wider investigation into mafia links to the gambling industry resulting in the arrest of 60 people last November. Two of those were arrested were Carmelo Consolato Murina and Guiseppe Pensabene, members of the ‘Ndrangheta organised crime gang who are also linked to SKS365.

SKS365 and its brand Planetwin365 was given a concession by the Maltese authorities in 2011 allowing it to control a network of betting shops in Italy. Then, in 2015, the Italian authorities initiated an amnesty programme that would lift foreign licenced entities operating in the country, out of a “legal grey area”.

SKS365 was issued with an Italian licence but the company still used a vast network of unlicenced shops owned by mafia-linked Franceso Martiradonna to conduct activities.

Paolo Tavarelli, Giuseppe Decandia, and Paolo Sipone – three of the original founders of the company – are awaiting trial for making deals with mafia clans to ensure their brand would dominate, as well as laundering money for them. A third founder, Ivana Ivnovic was arrested at the beginning of August.

Over recent years, Malta has increasingly been at the centre of a number of investigations by Italian authorities. The country has been described as “ATM for the Italian mafia” by the Investigative Reporting Project Italy (IRPI).

SKS365 reacted to The Shift’s article,  insisting the findings were not definitive and objecting to the use of the term “tax evasion”, preferring to call it “unfaithful tax return”, according to a reply received by a consultant to the company.

The reply (link to full statement) confirms that the amount of money the Guardia Di Finanza is claiming “corresponds with €124 million” and it stresses that SKS365’s current management is not among the suspects of any illegal activity, as The Shift reported.