German regulatory and tax enforcement bodies have intensified their scrutiny of foreign iGaming firms operating in the German market. Several operators licensed by the Malta Gaming Authority (MGA) have reportedly come under investigation, receiving official notices from German tax departments. Under German law, any gambling business catering to local users must fulfill tax obligations, including value-added tax (VAT) and levies on sports betting. Failure to meet these financial duties is classified as tax evasion—an offense that can carry criminal charges and serious consequences for company leaders, as demonstrated by the recent detention of Iosif Galea.
The Iosif Galea Case
In May 2022, Maltese gaming consultant Iosif Galea was detained by Italian authorities while vacationing in the country. Although German officials had issued a European arrest warrant more than a year earlier, Maltese authorities had not taken action against Iosif during that time. Galea’s arrest in Brindisi ultimately led to his extradition to Germany, where he was placed under house arrest.
As reported by The Times of Malta, Galea was already under investigation by Maltese police for suspected financial offenses and had been released on police bail, requiring prior approval for international travel. According to sources, Galea himself was allegedly unaware that a European warrant had been issued for his arrest.
Bet90 and the Veltyco Connection
Iosif Galea, formerly a compliance officer at the MGA, later established his own consultancy firm. He served as a director for Bet 90 Sports Limited, operating under the brand Bet90 (www.bet90.com), a company regulated by the MGA. Bet90 was associated with the Veltyco Group, linked to alleged cybercrime figures Uwe Lenhoff and Betim Tasholli. Lenhoff died in pre-trial detention in summer 2020, while Tasholli is currently on trial in Germany.
Industry Reflection and Legal Concerns
The arrest of Iosif Galea has triggered a wave of reflection across Malta’s gaming industry. Numerous executives at MGA-licensed companies are reconsidering their roles—particularly those acting as nominee directors for businesses largely managed by foreign stakeholders.
Legal expert Joerg Hofmann from the German law firm Melchers has previously warned that German tax authorities view Malta-registered iGaming firms catering to the German market as subject to local VAT and sports betting levies. Ignoring these obligations could expose directors to criminal prosecution and lead to hefty penalties for the companies involved due to tax evasion.
Implications for the iGaming Industry
The unfolding events underscore the importance of regulatory compliance for iGaming companies operating across jurisdictions. Directors must be vigilant about the tax obligations in each market they target to mitigate legal risks and uphold the integrity of their operations.