In a significant operation to combat illegal gambling and tax evasion, Ukrainian authorities have taken decisive action against a premier gambling provider in the nation. The Bureau has formally accused the said operator of failing to pay upwards of UAH1.20 billion in taxes.
According to the findings of an extensive investigation, the gambling operator, despite holding a valid Ukrainian license, was found to be associated with illicit online gambling activities. It was revealed that individuals linked to the operator had been managing over 30 “mirror” sites, offering unlicensed gambling services, identical to their officially licensed counterpart.
Further investigations exposed an elaborate strategy purportedly employed by the operator to steer payments in a way that facilitated large-scale tax evasion. This “misdirection” of funds, as identified by the Bureau, has been described as a stratagem operating on a particularly large scale.
Detailing the irregularities, the authorities uncovered that the physical location of the operator did not correspond with the address registered on the license issued by the national regulator KRAIL. This discrepancy fueled suspicions which led to additional discoveries. Upon further inquiry, it surfaced that staff members had been actively concealing crucial evidence, documents, and information that were vital to the Bureau’s thorough investigation.
As a result of these discoveries, the Ukrainian authorities have frozen a substantial sum of UAH700 million from the operator’s accounts. The gravity of the allegations has initiated a pre-trial investigation, currently advised upon by the Prosecutor General’s Office.
While the Bureau refrained from publicly identifying the gambling operator in question, external reports from The New Voice of Ukraine, supported by information from Forbes, identify the firm as Cosmolot. In response to the charges, Cosmolot has strongly contested the claims, deeming them baseless and subsequently appealing to the courts. Cosmolot asserts that its staff are solely engaged in the upkeep of its official website, cosmolot.ua, which operates strictly within the bounds of its official licensing.
The case represents the Ukrainian authorities’ latest strategic move in a series of efforts to clamp down on unauthorized gambling within the country. Within the previous year, Ukraine has put into effect several new laws and has proposed additional measures to fortify its stance against illegal gambling operations.
Among the new legislation is a law detailing anti-money laundering and counter-terrorist financing (AML/CTF) protocols for relevant organizations, operational since the previous July. This new regulation subjects operators to more rigorous inspections. Furthermore, a prospective amendment was proposed in August, aimed at preventing banks from extending credit to individuals who have chosen to exclude themselves from gambling activities, necessitating expanded due diligence by lenders.
In addition to these measures, there could be impending changes within the nation’s regulatory structures. Mykhailo Fedorov, Ukraine’s Deputy Prime Minister, proposed in May 2023 a draft law that advocated for the dissolution of the KRAIL and its replacement with a new executive body. Fedorov’s proposal cited KRAIL’s persistent delays in issuing gambling licenses as a significant issue.
KRAIL, structured as a collegial entity with a chairman and six members, has faced operational challenges, particularly with the mobilization of some Commission members into military service following Russia’s invasion. The absence of these Commission members rendered it impossible to convene the meetings required to process license applications, leading to prolongations in regulatory tasks.
As the situation evolves, the Ukrainian government maintains a resolute stance against illicit gambling activities and tax fraud, reinforcing a legal landscape designed to ensure fair and lawful conduct within the gambling industry.
