Ukraine Shuts Over 30 Illegal Operations

The Security Service of Ukraine (SBU) has revealed that it has raided and shut down over 30 illegal gambling operations across various cities in the country, along with two casinos, since the outset of March. Its efforts were aided by close collaboration with the country’s Commission for Licensing of Gambling and Lotteries (KRAIL).

The Ukrainian city of Lviv in the summertime, with churches and buildings dotting the green, hilly landscape.

Over 30 illegal gambling operations across Ukraine have been raided and shut down by the country’s Security Service (SBU), in close collaboration with Ukraine’s Commission for Licensing of Gambling and Lotteries (KRAIL). ©Roman_Polyanyk/Pixabay

Illegal Operations Shut Down in Various Cities and Regions

The Security Service of Ukraine (SBU) has announced the sudden closure of over 30 illegal gambling schemes across the country, including two casinos.

The raids on and subsequent closures of the illegal gambling operations have been occurring since the beginning of March.

Further details in the cases emerged in the form of the fact that the Security Service of Ukraine (SBU) worked in close collaboration with the country’s Commission for Licensing of Gambling and Lotteries (KRAIL).

The illegal gambling establishments shut down as part of the security service’s crackdown were located in cities all across Ukraine, including the Kiev, Donetsk, Zhytomyr and Odessa regions of the country, along with several others.

It was also claimed that part of these raided and shuttered establishments were operated by so-called “terrorist organizations”, as per the SBU’s labels.

As part of the operations, the Security Service of Ukraine (SBU) seized a verifiable treasure trove of evidence: over 600 units of computer equipment, 14 poker tables, 5 roulette wheels, numerous playing chips, cards and card game accessories, the illegal establishments’ staff’s mobile phones, as well as client database records, video recorders and cash.

Further leads on whether law enforcement officers were involved in the illegal gambling operations is currently being investigated by the relevant authorities.

Link to So-Called “Terrorist Organizations” Has Been Established

As previously mentioned, a perhaps unexpected turn in the shutting down of illegal Ukrainian gambling operations arrived in the form of alleged links to terrorist organizations.

The Security Service of Ukraine (SBU) asserts that part of the funds generated by the illegal gambling operations had in fact been used to finance certain self-proclaimed states within Ukraine, namely the Donetsk People’s Republic (DPR) and Luhansk People’s Republic (LPR).

This revelation proves to be significant, at least within Ukraine, seeing as the state officially categorizes both the LPR and DPR as so-called “terrorist organizations”.

Many other international bodies and institutions, as well as entire nations, such as the EU, Russia and the United States, do not label the LPR and DPR as “terrorist organizations.”

Gambling Finally Legalized in Ukraine in July 2020

The reality of fully legalized and regulated gambling in Ukraine is still a relatively recent and novel one, seeing as almost all forms of gambling were legalized in the country as recently as August 2020.

Ukraine’s president Volodymyr Zelensky signed the country’s first-ever Gambling Act into law in August, following the bill being passed in Ukraine’s parliament, known as the Verkhovna Rada, in July 2020.

Verticals such as online gambling, bookmaking, slot halls and land-based casinos have all been legalized as part of the bill, though casinos may only be located on the premises of a hotel.

The bill, 2285-D, was submitted by Oleg Marusyak, head of Ukraine’s Committee on Finance, Tax and Customs Policy, after being amended multiple times in response to reforms proposed by the governing party in Ukraine — the Servant of the People Party.

A somewhat controversial aspect of the Gambling Act are the surprisingly high license fees expected to be paid by operators every five years after their gambling license expires, with the amount currently being set to UAH30.7 million.

Though it is perhaps the limitations placed on the origins of the companies attempting to apply for gambling licenses in Ukraine which might prove to be most controversial.

Provisions in the bill specify that any operator managing and operating slot machines in Ukraine cannot originate from a country that is considered an occupying or aggressive state.

What this essentially means in practice is that no companies operated by Russian-owned organizations will be granted a license in Ukraine. 

This also extends to any Russian-born directors or high-ranking staff members.

Based on this provision, it seems quite likely that this same logic was used to raid and shut down over 30 illegal gambling operations in Ukraine accused of harboring links to so-called “terrorist organizations” in the country’s disputed Eastern regions.

First Ukrainian Gambling License Awarded to Spaceiks

Following the official launch of Ukraine’s legal gambling market in August 2020, the first actual Ukrainian gambling license was not awarded until February 2021.

Earlier this year, Ukraine’s Commission for Licensing of Gambling and Lotteries (KRAIL) awarded Cosmolot operator Spaceiks a gambling license, allowing it to operate a casino in the country.

Just as every operator granted a license will now have to do moving forward, Spaceiks LLC had to first pay the UAH39 million online license fee before being actually permitted to offer casino games in Ukraine.

In fact, Spaceiks initially applied for a license in December 2020, prompting Ukraine’s Commission for the Regulation of Gambling and Lotteries (KRAIL) to request further documentation concerning the operator’s ownership and management structure.

However once it had been established that Spaceiks met Ukraine’s strict requirement that all licensees must be based within the country, the operator was successfully awarded the gambling license.

Parimatch Recently Awarded First Sports Betting License

In even more recent news, international sports betting giant Parimatch was the first operator to receive official approval for a Ukrainian sports betting license.

Much like Spaceiks LLC before it, Parimatch clarified that it still needed to carry out a number of procedures required by Ukraine’s current gambling legislation before actually receiving the license.

One of these requirements was the payment of its UAH39 million license fee, which it hoped to have completed within ten working days following the announcement of Parimatch being granted the license.

The operator had expressed its desire to pursue a Ukrainian gambling license almost immediately upon president Volodymyr Zelensky signing the country’s Gambling Act into law in August 2020.

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