The European Gaming and Betting Association (EGBA) has filed a formal complaint with the Bank of Lithuania against Walletto, a Vilnius-based payment services provider, alleging that the firm processed deposits on behalf of illegal online gambling platforms. The complaint is based on test transactions conducted during an EGBA investigation into unlicensed gambling websites and apps targeting European consumers.
The case centres on merchant category miscoding: the allegation is that transactions linked to illegal gambling operators were routed through Walletto in a way that obscured their true nature, allowing them to travel over mainstream card networks. Walletto holds principal membership of both Visa and Mastercard. EGBA said it has raised the matter with both card schemes and with the European Commission’s DG FISMA.
The EGBA’s secretary general, Maarten Haijer, framed the issue as structural rather than isolated. “Illegal operators flourish by exploiting legitimate financial channels and the mainstream payment networks that consumers rely on every day,” he said. “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.”
Lithuania’s regulatory standing under scrutiny
The complaint lands at an awkward moment for Lithuania’s fintech hub. The country has become a significant EU gateway for payment services providers seeking passporting rights across the bloc, attracting hundreds of licensed e-money institutions and PSPs in recent years. That model depends on credible supervision.
The European Commission last week launched infringement proceedings against Lithuania and three other EU member states for failing to transpose anti-money laundering rules correctly into national law, adding regulatory pressure on Vilnius at exactly the point the Walletto matter becomes public. The transactions EGBA investigated took place in Denmark and Poland, meaning Lithuanian regulatory oversight has cross-border consequences. The payments sector as a whole, not only Walletto, faces the question of whether the Lithuanian e-money licensing regime is adequately resourced for the volume of business it supervises.
In the US, pressure on card schemes over illegal gambling transactions is also building, EGBA noted, suggesting the enforcement climate is tightening on both sides of the Atlantic.
Regulatory and enforcement read-across
The EGBA complaint explicitly invokes PSD2 and the EU’s anti-money laundering framework as the legal basis for enforcement action. Under PSD2, payment service providers are required to carry out adequate due diligence on their merchant base, and the misclassification of gambling transactions is a known vector for regulatory evasion. The incoming PSD3 and the revised Payment Services Regulation (PSR) are expected to sharpen merchant onboarding obligations, but implementation timelines remain subject to member-state transposition.
More immediately, the case illustrates a structural gap in current enforcement: gambling regulators in individual member states can revoke licences from unlicensed operators, but they have limited direct reach over the payment intermediaries that keep those operators commercially viable. EGBA is pushing for financial regulators to use existing powers against PSPs rather than waiting for new legislation.
The illegal gambling market is a significant concern for 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 of 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 operating alongside unregulated competitors reinforces 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.
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