FavBet vs 1xBet: skeletons in the closet of the biggest bookmakers

FavBet vs 1xBet: skeletons in the closet of the biggest bookmakers

The interests of millions of Ukrainian families remain unnoticed behind the dirty showdowns of gambling business bigwigs.

The story of the redistribution of the fat betting market is developing at a dizzying pace.

Yesterday it became known that the Bureau of Economic Security (BES) under the procedural guidance of the OGPU prosecutors began a pre-trial investigation in criminal proceedings regarding the bookmaking activities of gambling operators without a corresponding license. In particular, this concerns the bookmaker with Russian roots 1xBet.

“As part of the pre-trial investigation, the circumstances under which the company’s officials, by prior agreement, together with other persons, using special gaming equipment and software, organized and conducted bookmaking activities and casino gambling on the Internet without the appropriate license over the past period are being investigated,” the BES statement said.

The Bureau of Economic Security emphasized that the bookmakers’ activities were initially found to contain signs of deliberate evasion of income tax and payment of funds for obtaining licenses for the implementation of the relevant type of activity. Which, in turn, led to the actual non-receipt of funds to the budget in particularly large amounts.

It is noteworthy that the BES reported on the opening of proceedings against 1xBet after a public statement to this body about the bookmaker’s crimes, filed by public activist and blogger Tetyana Lokatska. Earlier, she launched a flash mob with appeals to the National Security and Defence Council to impose sanctions on 1xBet.

According to documents from the Unified State Register of Court Decisions, since 2014, 1xBet, like other players in the Ukrainian betting market, has been involved in criminal proceedings for illegal gambling, tax evasion, money laundering, terrorist financing, etc. However, the storm broke out after 1xBet, which is backed by Russians with Cypriot passports, managed to legalize itself in Ukraine through the front company “Your Betting Company” by obtaining the appropriate license from the Commission for the Regulation of Gambling and Lotteries on March 30 of this year.

Shortly after, on April 27, criminal case No. 42022102070000148 was registered under Part 3 of Article 190 of the Criminal Code (large-scale fraud) and Part 3 of Article 110-2 of the Criminal Code (financing actions aimed at the violent change of the borders of Ukraine, etc., by prior agreement by a group of persons). Its main defendants are LLC "Your Betting Company" and bookmaker 1xBet.

On the day of the searches within the framework of this criminal case, May 23, a portion of dirt on one of the main competitors of the "Russian Cypriots" - the FavBet office of Andriy Matyukha - was thrown into the information space. The defendant was convicted of the same things that 1xBet is now publicly branded for - working with an aggressor country, illegal gambling, tax evasion, etc.

In the end, the media, public activists, law enforcement officers, politicians and even the Supreme Commander-in-Chief Volodymyr Zelenskyy himself were drawn into the showdown between the fighters for the wallets of the slaves of gambling.

Now I consider it appropriate to retell with some additions the February article by Artem Horovenko, published in the RBC – Ukraine edition. In order, so to speak, to fill in some gaps.

Thus, the author draws attention to the experience of Georgia, where gambling business was legalized much earlier. Moreover, Georgia pursued a policy in the sphere of gambling regulation similar to the Ukrainian one. For citizens of Georgia, such liberalization resulted in gambling addiction, dominance of gambling advertising, and uncontrolled spread of online casinos.

According to research by non-governmental organizations, 48% of Georgian schoolchildren gamble online. This future may also await Ukraine.

In Ukraine, sociological research is being conducted at the initiative of the public organization Ukrainian Gambling Council, which demonstrates a positive attitude of citizens towards the legalization of the gambling business. This is not surprising, because the main players of this market are among the members of UGC, including the largest whales - "Cosmolot", FavBet and PariMatch. All of them are interested in demonstrating public support for lobbying the interests of the industry.

The author writes that the first online gambling operator license was issued by KRAIL to the limited liability company Spacex, which bought the trademark Kosmolot. As noted by the company, when submitting documents for a license, one of the main requirements was the presence of a registered trademark. In this case, the company had the trademark Kosmolot.

I would like to point out that the registration data of SpaceX LLC says absolutely nothing about who is actually behind it now. The only nominal beneficiary and CEO of the company, Serhiy Potapov, has not previously been noticed in the gambling business. Apart from what he says about himself, little is known about him, and it remains a mystery how he scraped together astronomical sums for the company’s 30-million authorized capital, license, and other considerable expenses.

Serhiy Potapov

The author of RBC-Ukraine notes that the success and growth of Cosmolot is often associated with the influence of former Interior Minister Arsen Avakov. The company’s operation is attributed to the former co-founder of the IT company Lucky Labs, Sergey Tokarev, which became known thanks to a number of accusations of illegal online business and financing terrorism.

By the way, Sergey Tokarev is currently trying to legalize himself in Ukraine by obtaining a passport with a trident. The head of the Ministry of Digital Development, Mykhailo Fedorov, is personally interceding for him.

Sergey Tokarev

Today, Lucky Labs is effectively out of business — mass layoffs occurred due to numerous investigations into their activities, accompanied by the confiscation of equipment. One of the reasons for such actions by law enforcement officers was the company’s servicing of the Kosmolot casino. SpaceX says that they have no relation to Lucky Labs or the offline Kosmolot casinos.

Sergey Tokarev himself fell under the sanctions of the National Security and Defence Council in 2017, which were extended for another three years in 2018. During this period, Tokarev was actively getting rid of his Ukrainian gambling assets. The new owner of Lucky Labs was a resident of Zaporizhzhya, Oleksandr Kravchenko, who said in an interview that he had never heard the names Tokarev and Gilfanov (the second owner of Lucky Labs).

Lucky Labs played an interesting role in the development of another giant of Ukrainian online gambling. In 2016, PariMatch rebranded its poker division. As a result, PokerMatch became part of the PokerDOM network, a Lucky Labs project.

Eduard Shvindlerman and Tetyana Biloruska, the ultimate beneficiaries of PariMatch

In 2020, PariMatch acquired PokerMatch: for this purpose, the legal entity PokerMatch.UA was created. The owner of its 40% of shares, among others, through the Cypriot holding WePlay Media Holding Limited, was listed as a certain Sergey Kartashev (Serhiy Kartashov) - Senior Partner in the Roosh investment fund, which is owned by the same Sergey Tokarev.

In 2021, the development department of PariMatch also absorbed the marketing holding Mr.Fish, which was part of the portfolio of JKR Innovative Investments LTD. The controlling stake in this fund belongs to the Cypriot legal entity Viman Limited, which is owned by the CEO of Parimatch - Serhiy Portnov. After this purchase, he is listed as the owner of Mr.Fish through another Cypriot legal entity IQ Creative Lab Ltd. The deal to change the owners took place in Cyprus, not in Ukraine, which may look like a way to avoid paying taxes to the Ukrainian treasury.

In a comment to RBC-Ukraine, the company denied this point, claiming that they are a responsible taxpayer.

PariMatch Group Ownership Scheme. Click on image to enlarge

Another large company, Favorit-Sport (FavBet), deserves special mention. Its main beneficiary is non-public businessman Andriy Matyukha. Previously, it was accused of illegal gambling, financing terrorism, and tax evasion on an especially large scale through an affiliated person, Lucky Land LLC – the relevant documents are contained in the unified state register of court decisions.

The company had to publicly comment on accusations of illegality in its activities - they insisted on their innocence and denied the accusations.

Key beneficiary of the bookmaker FavBet Andriy Matyukha

In 2020, security forces again took an interest in Favorit Sport — they conducted searches in the offices and homes of the company’s employees. At first, the fact of the searches was denied. However, they were later confirmed by the press service, which stated that they were caused by the actions of Russian companies "that are not satisfied with the provisions of the draft law "On state regulation of activities related to the organization and conduct of gambling" adopted in the first reading, namely in terms of prohibiting the activities of companies in the gambling market of Ukraine whose ultimate beneficiaries are individuals or legal entities of Russian origin."

It is impossible not to notice that in this statement by Favorit there is a “thick” hint at 1xBet – an aggressive player with Russian roots, which is trying to break into the Ukrainian betting market.

At the time when 1xBet managed to negotiate a license from KRAIL by hook or by crook, the market was actually divided between three main players: Cosmolot, FavBet and PariMatch. None of them would be happy about the appearance of a contender for their piece of the pie. But the most active participant in the information war against the "Russian Cypriots", as stated in our previous investigation, is obviously Andriy Matyukha’s FavBet.

And, paraphrasing the author of the publication from "RBK - Ukraine", I would like to note the following. Against the background of the showdown between the gambling business bigwigs about which of them is connected with the aggressor country and has more rights to cut Ukrainian gambling addicts, the interests of millions of Ukrainian families whose members suffer from gambling addiction remain unattended. And it is not surprising, because both bookmakers and casinos, as well as officials who "ticket" the bigwigs, make money on them.