EGBA files complaint with Bank of Lithuania over alleged miscoding of illegal gambling transactions at Walletto

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, over alleged processing of deposits for illegal online gambling platforms. For PSPs, the issue is not the gambling content itself but merchant category miscoding: if the transaction is coded as something else, it can move through mainstream card rails without the usual friction.

1. The complaint is based on test transactions carried out during an EGBA investigation into unlicensed gambling websites and apps targeting European consumers. EGBA says the transactions linked to illegal gambling operators were routed through Walletto in a way that obscured their true nature.
2. 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, which tells you this is being treated as a network-level issue, not just a single-merchant dispute.
3. EGBA secretary general Maarten Haijer called the problem structural. “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.”
4. The timing is awkward 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, and the Walletto complaint puts that supervision under the microscope.
5. 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. The EGBA transactions it investigated took place in Denmark and Poland, so the regulatory fallout is not limited to Vilnius.

EGBA’s complaint explicitly invokes PSD2 and the EU anti-money laundering framework. Under PSD2, payment service providers are required to carry out adequate due diligence on their merchant base, and misclassification of gambling transactions remains a familiar route around controls. EGBA also noted that pressure on card schemes over illegal gambling transactions is building in the US, which makes this look less like a local compliance skirmish and more like a tightening enforcement pattern across major payment networks.