Gaming Body Accuses Lithuanian Fintech of Processing Illegal Bets

The European Gaming and Betting Association (EGBA) has lodged a formal complaint with the Bank of Lithuania against Walletto, a Vilnius-based payment services provider. The trade body claims the firm routed deposits for illegal online gambling platforms operating without licences in EU markets.

EGBA's investigation included test transactions on unlicensed gambling websites and apps targeting European consumers. The association alleges that Walletto processed these payments in ways that obscured their gambling nature, enabling them to pass through mainstream card networks. Walletto holds principal membership of both Visa and Mastercard.

The complaint has been escalated to both card schemes and to the European Commission's DG FISMA, the directorate responsible for financial services policy.

Maarten Haijer, secretary general at EGBA, characterised the issue as systemic rather than a one-off incident.

Illegal operators flourish by exploiting legitimate financial channels and the mainstream payment networks that consumers rely on every day. Card schemes also have a crucial role to play: they are better placed than anyone, as they set the rules for these payment networks and see transaction flows no one else can.

The transactions flagged by EGBA took place in Denmark and Poland, meaning oversight failures in Lithuania have direct consequences for consumers and regulators across the bloc.

The complaint arrives as Lithuania's role as an EU fintech gateway faces renewed scrutiny. Hundreds of payment services providers and e-money institutions have sought Lithuanian licences in recent years, drawn by the country's access to EU passporting. That business model depends on credible supervision by national authorities.

Last week, the European Commission launched infringement proceedings against Lithuania and three other member states for failing to transpose anti-money laundering rules correctly into national law. The timing adds regulatory pressure on Vilnius just as the Walletto case becomes public.

The payments sector as a whole, not only Walletto, now faces questions about whether the Lithuanian e-money licensing regime has adequate resources for the volume of business it oversees. EGBA noted that pressure on card schemes over illegal gambling transactions is also rising in the US, signalling a tightening enforcement climate on both sides of the Atlantic.

The EGBA complaint cites PSD2 and the EU's anti-money laundering framework as the legal foundation for enforcement action. Under PSD2, payment service providers must conduct adequate due diligence on merchants, and the misclassification of gambling transactions is a known route for regulatory evasion.

The incoming PSD3 and the revised Payment Services Regulation (PSR) are expected to strengthen merchant onboarding obligations, but implementation timelines depend on member-state transposition. In the meantime, the case highlights a structural gap in current enforcement: gambling regulators in individual member states can revoke licences from unlicensed operators, but they have limited direct authority over the payment intermediaries that enable those operators to stay in business.

EGBA is pushing for financial regulators to deploy existing powers against payment services providers rather than waiting for new legislation.

The illegal gambling market poses a significant threat to licensed operators including EGBA members Flutter, Bet365 and Entain, which together account for roughly 30% of European online gambling gross gaming revenue.

Unlicensed platforms carry none of the consumer protections mandated for regulated operators: no identity verification, no safer gambling tools, no AML controls and no guarantee of payout. The commercial and reputational damage to the licensed sector from competing alongside unregulated platforms explains why industry bodies are willing to drive regulatory complaints rather than leave enforcement solely to public authorities.

The Bank of Lithuania has not yet issued a public response to the complaint. The next indicators to watch are whether the central bank opens a formal supervisory process against Walletto and whether the card schemes impose any remedial requirements on their principal member.