Ukrainian Regulator Cancels Licences 'Controlled' By Russia’s Residents

December 15, 2022
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The Ukrainian Commission for the Regulation of Gambling and Lotteries (KRAIL) has announced it has removed the licences of a number of gambling operators who are active in the country but are “controlled by residents of the Russian Federation”.

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The Ukrainian Commission for the Regulation of Gambling and Lotteries (KRAIL) has announced it has removed the licences of a number of gambling operators who are active in the country but are “controlled by residents of the Russian Federation”.

The regulator said in a statement it has scrapped the online casino licence of Joker UA (ТОВ «ДЖОКЕР ЮА»), the bookmaking and online casino licences of Play Fan Investment (ТОВ «ПЛЕЙ ФАН ІНВЕСТМЕНТ») and the online casino licence of Alphagime (ТОВ «АЛЬФАГЕЙМ»).

The Russian invasion of Ukraine has pushed the authorities in Kyiv to ban local businesses from maintaining ties with Russia-based individuals and entities.

Despite this, such entrepreneurs and legal persons are still present in the Ukrainian gambling market, as indicated by KRAIL’s latest move.

Last month, the regulator said it is working closely with the Security Service of Ukraine (SBU) to probe into the existing ties between various Ukraine-based gambling industry players and Russia-based legal persons and individuals. The cancellations of the licences held by the three sanctioned companies are the result of this joint effort.

“Analysis of the information submitted by the Security Service of Ukraine and the National Police in Kyiv regarding the specified business entities, it was established that inaccurate information was found in the documents submitted by those business entities to obtain a licence,” according to the statement.

KRAIL said the inaccurate information concerned the required declaration “that the licensees do not act in the interests of residents of foreign countries that carry out armed aggression against Ukraine, and/or whose actions create conditions for the emergence of a military conflict and the use of military force against Ukraine, and/or establishing the existence of such control over the activities of gambling organisers.”

The investigation into such ties continues, and it could push KRAIL to scrap more licences of local gambling industry players in the near future.

Meanwhile, the Ukrainian regulator’s own future is uncertain following a scandal surrounding the shutting down of the Ukrainian operations of Russia-backed bookmaker 1xBet.

Ukraine’s Deputy Prime Minister Mykhailo Fedorov, who is also minister of digital transformation, has been calling for KRAIL’s closure.

Earlier this year, the regulator enabled 1xBet to operate in the Ukrainian market despite Russia’s invasion of Ukraine. Following reports in the media and the resulting public outcry, KRAIL moved to scrap the bookmaker’s Ukrainian licence.

Fedorov, who is the top government official in charge of overseeing the nation’s gambling industry, has stated that, in order to fight corruption and ensure transparency, KRAIL should be replaced with an automated licensing system.

Ivan Rudy, the head of KRAIL, said when the controversial licence was awarded to 1xBet, he was volunteering in the Ukrainian armed forces, and was not involved in the process.

Defending KRAIL’s role, Rudy also said that his agency has been working on a mechanism similar to the one proposed by Fedorov. The regulator has tasked its experts with developing a process of an automatised review of submitted licence applications, he said.

As of late September 2022, there were eight casinos and 60 slot halls licensed to run operations in Ukraine. This said, as a result of the ongoing war, only five casinos and 39 slot halls were open to Ukrainian players, according to data from KRAIL.

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