Ukraine Blocks Sites As It Finalises Russian Sanctions

March 13, 2023
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Ukraine’s regulator says it has blocked 709 illegal gambling sites and shut down 606 unlicensed gambling establishments, as it readies new powers to expunge Russia from its gambling market.

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Ukraine’s regulator says it has blocked 709 illegal gambling sites and shut down 606 unlicensed gambling establishments, as it readies new powers to expunge Russia from its gambling market.

Ivan Rudy, the head of Ukraine’s Commission for the Regulation of Gambling and Lotteries (KRAIL), said in a Facebook post that as part of its enforcement activities the agency has performed “extensive work” to identify 1,789 websites that relate to unlicensed gambling and 55 websites which contain links to unlicensed lotteries.

“The collected information has been regularly provided to law enforcement agencies,” the official said.

More than 700 sites have been blocked in recent weeks, the regulator said. “Just last week, a number of illegal gambling halls were discovered on the territory of Ukraine,” KRAIL added.

Of the 606 sites the regulator claims to have shuttered in recent months, 369 were located in Kyiv and the surroundings of the country’s capital.

KRAIL is also finalising work on sanctions to be imposed on gambling operators with ties to Russia, according to the regulator’s head.

"KRAIL has developed two packages of sanction lists of entities that are related to [Russia]. They are already in the final stages of adoption” by the country’s authorities, Rudy said.

Last month, the Ukrainian Cabinet implemented a decree that empowers KRAIL to initiate sanctions on Russia-backed members of the gambling industry active in Ukraine. The move is part of the country’s efforts to cut off its ties with Russia after it invaded its neighbour in February 2022.

The unlicensed market continues to capture a major share of Ukrainian gambling revenue.

Entities currently operating illegally include Russia-backed gambling operators which are banned from obtaining licences, but nevertheless continue to provide their services to Ukraine-based gamblers.

In late 2022, the agency cancelled the online casino and bookmaking licences of three such companies, stating that the penalised operators are “controlled by residents of the Russian Federation”.

Last December, the Economic Security Bureau of Ukraine (ESBU) said that the unlicensed gambling industry posts revenues of up to UAH12bn (€305m) per month. The resulting losses of the Ukrainian Treasury “can amount to UAH2bn in unpaid taxes” monthly, according to the agency.

Separately, the National Bank of Ukraine’s board has revoked a banking licence and liquidated JSC IBOX BANK, partly for its failure to carry out enhanced due diligence on clients that organised poker tournaments.

JSC IBOX BANK was liquidated on March 7, according to the National Bank’s press release on the same day.

The bank failed to “develop and implement internal documents on AML/CFT issues, taking into account the requirements of the legislation, the results of the national risk assessment and the assessment of the risks inherent in its activities”, according to the National Bank.

The decision follows a two-year period during which the National Bank has imposed a fine on the bank, ordered it to stop certain operations twice, suspended an official at JSC IBOX BANK and sent written warnings to it twice.

As the liquidated bank only accounts for 0.1 percent of the assets of solvent banks in the country, “its withdrawal from the market will not affect the stability of the banking sector”, according to the National Bank.

At the time of writing, JSC IBOX BANK had not responded to a request for comment.

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