Ukrainian Deputy PM Calls For Regulator's Closure Over Russian Bookmaker Scandal

November 25, 2022
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In the aftermath of the scandal surrounding the shutdown of the Ukrainian operations of Russia-backed bookmaker 1xBet, Mykhailo Fedorov, Ukraine’s deputy prime minister, is calling for the closure of the country’s Regulatory Commission on Gambling and Lotteries (KRAIL).

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In the aftermath of the scandal surrounding the shutdown of the Ukrainian operations of Russia-backed bookmaker 1xBet, Mykhailo Fedorov, Ukraine’s deputy prime minister, is calling for the closure of the country’s Regulatory Commission on Gambling and Lotteries (KRAIL).

Fedorov, who is also the country’s minister for digital transformation, believes that gambling licences should be awarded to local operators through an automated electronic system instead of by officials at the regulator.

Unhappiness with the current system has been fueled by the controversies related to the regulator’s dealings with 1xBet.

Earlier this year, the Russia-backed company was allowed to operate in the Ukrainian market despite Russia’s ongoing invasion of Ukraine. After this was reported in the media and resulted in public outcry, and after initially saying it did not have enough evidence to prove Russian links to 1xBet, KRAIL decided to cancel the bookmaker’s Ukrainian licence.

The deputy prime minister’s comments were recently addressed by Ivan Rudy, the head of KRAIL, in an interview with the Ukrainian edition of Forbes magazine. The regulatory chief claimed that, when the controversial licence was awarded to 1xBet, he was volunteering in the Ukrainian armed forces.

“When this licence was issued, I was in the armed forces, so I cannot comment on the whole process. I know figures, dry facts. Requests were sent to the Security Service of Ukraine, the Economic Security Bureau of Ukraine, the State Financial Monitoring Service, and then there was public outcry,” Rudy said.

“Only after establishing that the commission was provided with unreliable information, [1xBet] was deprived of its licences, both for bookmaking and activities on the internet,” said Rudy, who is a former anti-terror operative.

Asked about Fedorov’s proposal to shut down KRAIL and replace the agency’s activities with an automated process, Rudy backed the idea of automation, saying it would “completely remove corruption, make the industry transparent, and … attract international companies to Ukraine”.

Rudy said the agency has already begun work on a mechanism similar to the one pitched by the deputy prime minister.

“We started to work on automating how licences are awarded in the first months of the KRAIL's existence. We assigned the task to our experts to develop the process of submitting documents in an electronic form,” Rudy said.

“It would be great to implement a lot of automation and digitisation with Fedorov and the Ministry of Digital Transformation. But certain issues need to be studied in-depth,” said the KRAIL boss.

Earlier this month, KRAIL announced it had teamed up with the Security Service of Ukraine to initiate a probe into the potential ties between Ukraine-based gambling industry players and persons and entities based in Russia.

Moscow’s invasion has pushed Kyiv to ban local businesses from maintaining such ties, but, despite this move, the Ukrainian government believes some Russia-backed companies are still present in the country’s gambling market.

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