The Russian gambling business has once again started a new large-scale expansion into Ukraine and is gathering personal data of Ukrainians. And it got local support. With the participation of high-level Ukrainian officials, there have been created optimal conditions for Russians to work and prosper.
In 2022, InformNapalm released a series of OSINT (open-source intelligence) investigations that detailed attempts by the Russian bookmaker 1XBet to gather personal data of Ukrainians. We initiated the fight against the bookmaker empire belonging to FSB-related 1XBet owners Russian citizens Sergey Karshkov, Roman Semiokhin, and Dmytro Kazorin.
Back then, we found out that representatives of Ukrainian businesses, law enforcement agencies, and authorities at various levels were involved in lobbying the interests of Russians.
It took almost a year to finally rid Ukraine of this company’s presence. On March 10, 2023, a new list of sanctions signed by the President of Ukraine finally had Your Betting Company LLC, a company used by 1XBet to enter the Ukrainian market.
Despite unwavering opposition, it became possible thanks to First Deputy Prime Minister Yuliia Svyrydenko, who chairs the Interdepartmental Working Group on the implementation of the sanctions policy, KRAIL Chairman Ivan Rudy, and NSDC Secretary Oleksiy Danilov, who, in the last moment before the President signed the sanction list, did not let 1XBet lobbyists take away the Russian company from it. At the same time, sanctions were also imposed on 1XBet‘s main competitor, Parimatch, which exited the Russian market following a full-scale invasion, suddenly “noticing” the war that has been going on since 2014.
After this success, we spent several months analyzing what had changed in the market. As a result, we exposed a large-scale scheme to reincarnate 1XBet by turning Ukraine into an open market for any Russian online casinos and bookmakers who still wanted to make money in Ukraine and get the personal data of Ukrainians who like gambling. The plan was particularly dangerous as it involved employees of the Security Service of Ukraine (SSU), who were also responsible for forming sanctions policy in Ukraine.
Why so long?
Deciding to sanction the owners of 1XBet took incredibly long and, apparently, the decision faced furious resistance. The assumption that the Russian gambling business has agents in the sanctions mechanism, unfortunately, appears justified. One of these agents has already been publicly named in the Bihus.info investigation.
Artem Shylo, a high-ranking SSU employee, has had a great influence on decisions on Ukrainian sanctions. In August 2022, under the patronage of Oleh Tatarov, Shylo was appointed deputy of the SSU Department of National Statehood Protection and head of the SSU Main Directorate for counter-intelligence support of critical infrastructure facilities and countering the financing of terrorism. Under the leadership of the SSU Deputy Head Anatoliy Sandurskiy, Shylo became one of the main people responsible for sanctions policy in the Security Service of Ukraine.
“Among Shylo’s well-known achievements, the main ones were: working as an adviser to the Office of the President and attending Oleh Tatarov’s birthday. This is what is relevant to his career success. Talking about his personal financial success, Shylo was much more successful, which allowed Bihus.Info journalists to discover two three-room apartments in the elite residential complex Novopechersky Lypky (owned by Shylo, a market value of about $700,000). Another two-room apartment and a 360 square-meter commercial real estate worth more than $2 million were also found in the same residential complex. In the best corrupt traditions, the documents mentioned his wife as the owner of these two real estates. Apart from that, Shylo’s wife has a total of 275 square meters in a clubhouse in the center of Kyiv. Nearby, she has a beauty salon with a $1 million market value. In addition to real estate, Shylo’s wife has two Mercedes and a Toyota. Shylo’s father owns a house in the Kyiv suburbs. An interesting fact: the apartments in Novopechersky Lypky were purchased already during the full-fledged war, in May 2022,” journalist Sergii Ivanov writes about this person on Cenzor.net.
Artem Shylo has already appeared in our OSINT investigation regarding 1XBet as one of their patrons, who introduced Russians to Ukraine back in 2016-2017. Journalists discovered that in 2021 when he was dismissed from the SSU, Shylo established Prikker LLC at Shevchenko Boulevard 58, Kyiv, where Tarasyuk and Partners JSC is registered. The company owners Serhiy Tarasyuk and Anna Bryn accompanied the licensing of 1XBet and defended Your Betting Company LLC in court.
Artem Shylo’s influence on sanctioning mechanisms was not enough to turn a blind eye to the scandal with the Russian bookmaker 1XBet. The NSDC, the Interdepartmental Working Group, and KRAIL did what they had to. However, according to our study of the situation, once falling under sanctions, the Russians came up with a new plan: to completely get rid of or ban gambling legal operators in Ukraine. This will open the doors for 1XBet return: if the Ukrainian operators become illegal, then the Russian ones will be able to take over the market.
This plan is already being turned into action with the same figures supporting it. There is a series of events to prove it.
Pressure on legal operators
In the fall of 2022, when sanctions on 1Xbet seemed inevitable, high-ranking SSU representatives started to talk about arranging the gambling industry, which pays taxes poorly. This rhetoric was supported by MP Danylo Hetmantsev, who is associated with Russian agents. He constantly offers new ideas to put pressure on legal market operators. Back in 2019, Danylo Hetmantsev had a stake in the lottery operator M.C.L. He is also known for his working for the Party of Regions deputy and KGB ex-employee Volodymyr Sivkovych from 2002 to 2010, and also him supporting legally the companies of former chairman of Ukravtodor Volodymyr Demishkan, a friend of ex-President Viktor Yanukovych.
Discussions about the tax campaign (against the background that it is Danylo Hetmantsev who has been blocking the law on taxation in the gambling industry for two years, and the SSU’s interest in taxes generally seems weird when the country is at war) were accompanied by actions contrary to this goal: pressuring licensed gambling operators in such a way that they would leave the market or transfer to the grey zone.
Under the control of the Security Service of Ukraine, two criminal proceedings were initiated in the National Police (NPU) and the Bureau of Economic Security (BES) – GSU NPU 12022000000000558 dated 23.06.2022 (Part 3 of Article 362, Part 3 of Article 209 of the Criminal Code) and BES 42022000000000938 of 13.07.2022. (Part 2 of Article 203-2, Part 3 of Article 212 of the Criminal Code). The mentioned articles refer to “Unauthorized change, destruction, or blocking of information; legalization of proceeds obtained through criminal means; organization or conduct of gambling without a license; intentional tax evasion.” Ukrainian licensed gambling market operators were included in the listed proceedings. Now these cases are being used to cause problems for legal operators under artificial pretexts.
At the same time, mass and, likely, commissioned publications against other licensed market operators started to appear in the information space of Ukraine. In April, we recorded more than 250 articles about Pin-Up, Favbet, Cosmolot, VBet, and First on dozens of media outlets with a rather dubious reputation. In fact, these are the largest licensed players remaining in the Ukrainian market. All articles were written according to the same scheme and promoted a single key thesis: the brands are associated with the Russian Federation. It looked like someone was preparing the grounds for the SSU to intervene. One can easily see the chronology of hit pieces in media on the Antikor website when searching for “casino.”
[Image:
22.04.2023, 13:39 – First Casino: Connections with pyramids and capital associated with Russia
04.13.2023, 09:00 – First casino owners: From financial pyramids to the Myrotvorets base
04.09.2023, 10:00 – Casino Cosmolot: How Ukrainians help enrich a Russian man from the NSDC sanctions list
04.08.2023, 15:04 – Russia is biting off our lands with the help of weapons, and the feudal lords are alienating them from the inside with the help of the dollar
04.08.2023, 12:45 – Russian connections in VBet. What connects Armenian men with BetConstruct and the owner of Ukrainian Forbes
08.04.2023, 12:39 – FavBet. How “emigrant” Matyukha’s company worked without a license and served the Russians during the war
04.06.2023, 7:00 – How not to pay 235 million in taxes and use it for PR: The Favbet case
04.05.2023, 19:35 – PR on the bones: How the online casino Pin-Up, which is sponsored by the Russian budget, is now trying to “save face”
04.04.2023, 15:10 – Pin-Up online casino with Russian roots withdraws Ukrainian money to Russia
04.03.2023, 18:41 – Why does the Russian online casino Pin-Up continue to operate in Ukraine, financing the budget of the occupiers?]
According to estimates, such a campaign for several hundred articles costs customers about $100,000. According to sources from Ukrainian media, the sponsored texts were offered by people who usually help law enforcement agencies to distribute the necessary information.
Controlled publications in this case allow initiating checks on companies based on media publications, and in some cases even replace real facts with information from the media. This may be enough to put pressure on companies, and in certain cases, it can even be used to argue for adding a legal entity to the sanctions lists.
In addition to the SSU, the National Bank of Ukraine (NBU) also joined the campaign. Following the personal instructions of the Deputy Chairman of the NBU, Dmytro Oliynyk, banks selectively stopped accepting payments from legal operators. Dmytro Oliynyk is considered one of the closest NBU board members to National Bank Governor Andrii Pyshny. According to Forbes, since the beginning of the year, every bank that provides acquiring e-commerce services has been a subject to unscheduled NBU inspections. In fact, the acquiring process was transferred to manual control. At the same time, the payments that were blocked did not refer to miscoding (when a payment imitates something else) but referred to the gaming industry with the legal code 7995.
And here the administration of Artem Shylo probably also played its role. According to Shylo’s comments in an article in RBC-Ukraine, he supported creating a unified online monitoring system of cashless payments based on the NBU. The fact that one article combines the comments of a little-known SSU employee together with the NBU Governor Andrii Pyshny, is also an anomaly. It could not help but attract attention, especially since the article resembles the program position of a certain group of individuals.
“The task of such a system is comprehensive control and monitoring not only of the gambling market but also other schemes for legalizing and laundering money obtained illegally. It should also focus on all prerequisites for financing certain destabilizing measures in our country. For example, financing separatist or terrorist activities,” Shylo said.
The return of black and gray casinos
Within two years after the legalization of the gambling business, Ukrainian players tended to abandon illegal bookmaking resources and online casinos. Black and gray resources have almost completely disappeared from the gaming market of Ukraine. But the pressure on legal operators and attempts to red rid of them radically changed the situation.
Now, by searching for “online casino Ukraine” on various resources, one can see a list of unlicensed gambling websites. Here are a few of those available in Ukraine: MELBET, SLOTOR, MONOSLOT, 1WIN, GRAND CASINO, SPRUT CASINO, FRESH, SOL, FONTAN, ElSlots, Lavina, GoXBet, RoxCasino.
Each of these websites offers to replenish the account from Ukraine using various methods: Visa, MasterCard, P2P, Skrill, Jeton, WebMoney, MoneyGo, Piastrix, ecoPayz, and cryptocurrencies. We have checked this possibility. And indeed, with a few exceptions when the payment system did not work, it was not a problem to put money into any of the listed resources. Most of all, we were interested in the possibility of depositing money into an account through Ukrainian banks.
In most cases, replenishment occurs in the P2Pay format, when a user sends funds to the merchant’s card, and the merchant replenishes the user’s balance with cryptocurrency. The user receives a receipt in the bank’s office.
Below are the results of replenishing an account on various websites from the list.
Some of these resources are directly associated with the Russians from 1XBet. This is most obvious in the case of MELBET, which was mentioned in one of InformNapalm’s OSINT investigations. It is a Russian subsidiary of 1XBet that tried to enter the Ukrainian market and obtain a license but was exposed by investigative journalists and had to rename itself Pointloto.
On the Internet, one can find information that the Pointloto brand, which is also currently under sanctions in Ukraine, officially belongs to Azartcore, a company registered in Curacao. The same company manages another casino website SLOTOR, which is available for play from Ukraine.
The GRAND CASINO resource does not hide its connections with Russia even on its own website:
“The owner of the online casino “Grand Casino” is Overcan N.V., E-Commerce Park, Vredenberg, Curacao. Receiving funds and paying out winnings on behalf of and in the interests of the casino owner is carried out by Nadontil Limited, Agias Fylaxeos&Zinoros Rossidi 2 1st floor, P.C. 3082, Limassol, Cyprus. Technical support is provided by Mir LLC, registered in the Russian Federation, St. Petersburg 7(812) 448-53-56.”
The FRESH, SOL, and RoxCasino websites turned out to be just as interesting. All of them belong to Galaktika N.V. Their connection to the Russian Federatoin is indicated by the specialists of the localization company: Lyubov Mayorova from Krasnogorsk, Moscow Oblast, and Nikolay Shevchenko from Moscow.
With the help of volunteers from digital marketing, we analyzed the frequency of advertising publications on the most popular websites. According to the analysis, the amount of advertising of illegal gambling business in February-April 2023 increased by more than 30 percent. In particular, on sports resources. Unlicensed players build and strengthen their brand awareness through branding, prerolls, and banner ads. They also increase referral traffic, including from social networks.
All these websites are working successfully, despite the SSU and NBU talking about their desire to “establish comprehensive control and monitoring of the gambling industry”. Effective control of transactions in cryptocurrency is almost impossible. P2Pay payment is a breach that allows Ukrainians to pay with the card of the state-owned Privatbank to illegal casinos and bookmakers. As we can see, there has been no success in defining this breach for six months. This once again confirms that “fighting for taxes and transparency of the gambling industry” is a delusion. In fact, we observe promoting the development of the black market for gambling and betting.
Consequences
If the Russian revenge plan for a comeback in the Ukrainian gambling market is not stopped, Russia’s intelligence will gain extremely valuable information about Ukrainian players. According to the Law of Ukraine “On state regulation of activities regarding the organization and conduct of gambling”, licensed operators, including 1XBet that had a license for a while, must identify and verify each player.
This involves the gambling organizer collecting information about:
- first name, last name, patronymic (if available) of the person;
- age (date of birth) of the person;
- presence or absence of the person in the Register of persons which limits access to gambling institutions and/or participation in gamblings.
In addition to this, operators can collect a color digitized image of the player’s face, the number (and, if available, the series) of the passport of a citizen of Ukraine (or other ID), information about the place of residence or place of stay, the taxpayer registration number, and information about all transactions related to bets and winnings.
At the same time, all legitimate websites must use SSL which encrypts data when sent between a client and a web service. As a result, even if data is somehow obtained, it will be impossible to use it.
As for black and gray casinos, no one forces them to use encryption. Moreover, no one regulates whether these resources have access to other personal data: information about the device, current location, passwords and logins, contact data, and much more, which can be useful to the special services of the Russian Federation in the war against Ukraine. As a nice bonus, the GRU and the FSB can get possibility to send out phishing links to gain access to the devices of Ukrainian players. Leaking of information about a player’s difficult financial situation is especially dangerous: if such a player serves in the Armed Forces of Ukraine, it becomes easier to recruit the person. Each such incident can lead to catastrophic consequences at a time when Russian missiles are targeting Ukraine every day.
Thus, the more black gambling market operators there are, and the fewer white ones, the greater will be the flow of incoming information for Russian special services and the more money in the pockets of Russian owners, wherever they may be, in Moscow or Cyprus.
It does not take much effort to stop the scheme that involves an alliance of commercial and ideological Russian agents. It only requires one to prohibit the SSU employees from engaging in commercial activities and using their influence on the sanctions of the President of Ukraine for the realization of commercial interests. One also needs to expel those who already did that from the SSU and give them a well-deserved punishment. Here, we hope for the assistance of the head of the Security Service of Ukraine, Vasyl Malyuk, and his attention to this investigation.
It doesn’t negate the need to work on creating legal working conditions for the gaming industry and the state register of players, which is conducted by the Ministry of Digital Transformation headed by Mykhailo Fedorov by order of Prime Minister Denys Shmyhal. After all, direct prohibitions and pressure lead to the opposite result. If a soldier of the Armed Forces of Ukraine wants to play in a casino or bet on sports, they should do so on a Ukrainian legal website, where the security of personal data is ensured, and which is under the control of Ukraine, not the FSB.
By Andrij Lisitsyn and Mykhailo Makaruk specially for InformNapalm. Distribution and reprint with reference to the source is welcome! (Creative Commons – Attribution 4.0 International – CC BY 4.0) InformNapalm social media pages: 
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