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Ukraine’s gambling regulator has said it has resumed operations and will focus on supervising online operators, in part because much of the nation’s land-based industry has been literally destroyed.
The first official decisions by the Commission for the Regulation of Gambling and Lotteries (KRAIL) since the introduction of martial law were taken at an extraordinary meeting held on March 30.
The commission has since published several bulletins on its website, together with a statement about resuming work.
“Currently, the legislative and executive authorities of the country, in order to support the economy under martial law, urgently carry out measures aimed at facilitating the work of enterprises through the introduction of a number of tax preferences and innovations,” KRAIL’s statement says.
Two newly published documents in particular, seen by VIXIO GamblingCompliance, have attracted local media attention.
Both are related to a company called Tvoya Bettingova Kompaniya (“Your Betting Company” in English), which has been issued with licences for online casino and sportsbook operations in Ukraine.
The documents approve the company to operate under the 1xBet brand and use the 1xBet.ua domain name, after the state receives corresponding fees.
Apparent clear connections between 1xBet and businessmen with Russian origins have caused bewilderment in Ukraine.
The country’s gambling law tightly limits Russian involvement in Ukraine’s gambling market, even before the invasion.
Recent statements by KRAIL also indicate that it plans to systematically purge the Ukrainian gambling business of any ties with Russia, and Ukraine’s parliament has recently adopted a law to nationalise all Russian-owned property in the country.
Major local operators, including Cyprus-headquartered Parimatch, have announced they are cancelling all Russia-related business.
1xBet confusion
KRAIL has not addressed 1xBet’s apparent Russian connections. In a formal statement it said: "The national business is returning to work. Thus, TBK LLC announced its intention to start operating in the gaming industry of Ukraine by applying to the commission in March with an application for obtaining a licence to organise and conduct betting activities. Based on the results of consideration of this statement, the commission decided to issue an appropriate licence."
According to the state register, TBK LLC has authorised capital of UAH30m ($1m) and was registered in June 2021. It is founded by Sergei Tsybin and its company director is Alexander Rodin, according to the register. Tsybin also owns the First City Pawnshop and LLC Medov, both registered in the Ukrainian city of Dnipro.
Meanwhile, the 1xBet trademark specified by TBK LLC when obtaining its licence was issued in 2015 at the request of 1XCorp NV, registered on the island of Curaçao.
That company is the target of a lawsuit by a player advocacy group in Curaçao, as a result of which 1xCorp NV could be declared bankrupt and lose its licence there.
1XCorp NV is owned by three people of Russian origin — Roman Semiokhin, Sergey Karshkov and Dmitry Kazorin — who have received passports in Cyprus and reportedly live there.
Despite these Russian connections, the company is officially banned in Russia and a criminal case has been initiated against its owners.
An industry obliterated
Signs of a revival in online gambling in Ukraine are set against the backdrop of a land-based sector that has in many cases been physically destroyed.
All casinos and slot halls in Ukraine have officially closed and dismissed their staff and management, although there are unconfirmed reports that a handful of locations continue to operate in Lviv and Odesa.
Storm International, the only Western investor in Ukraine’s land-based casino sector, with two luxury Shangri La casinos in Kyiv and Kharkiv and seven Slots City slot halls in various cities, recently made an official announcement about the complete suspension of its business in Ukraine.
“Storm International, together with its Ukrainian partners, invested huge funds in Ukraine, starting at the end of 2020.
“Due to the war, operational activities are now suspended and foreign specialists have left the country. We look forward to the day when peace will be restored and we can return.”
Michael Boettcher, the founder of Storm, told VIXIO that all operations were suspended on the first day of the war, but an official statement was only just released, after the company finally completed the evacuation of its staff who wanted to leave Ukraine.
Boettcher believes the buildings in which their facilities are located are currently intact, but said “it is unethical even to think of reopening casinos in a country that is in such a position as Ukraine”.
