27.12.2024 Cybercrimes

PariMatch: Shadow schemes, offshores and a corruption shield that destroys the state budget

Как скачать приложение Париматч на телефон Андроид или IOS | Другие | XSPORT.ua

For several years now, Ukraine has been a field for heated discussions regarding the activities of online casinos and related entities. One of the most prominent examples is PariMatch, which is at the center of a number of high-profile scandals related to money laundering, offshore, corruption, and violations of license conditions. All of this has been concealed for a long time by the authorities: the recently detained head of KRAIL, Rudyi, and the Minister of the Ministry of Digital Transformation, Fedorov.

How does PariMatch work?

An extensive network of offshore companies, including Ericius Investments Limited, Parimatch United Investments Limited, WELPAY MEDIA HOLDING LIMITED, allows PariMatch to conceal financial flows and avoid paying taxes.

Particularly alarming is the fact that most of the revenue generated by gambling in Ukraine is directed to the Russian Federation through offshore accounts. This calls into question the legality of the operations, especially in times of war, when any financial support for the aggressor country is a crime.

NSDC sanctions: Formality or reality?

In March 2023, the National Security and Defense Council imposed sanctions against PariMatch. The reason was the company’s ties to Russian business structures and financial cooperation with the aggressor country. However, despite the sanctions, the casino’s activities not only did not stop but also actively expanded.

The company quickly obtained new licenses through its subsidiaries, such as SITIKOD LLC and GORILLABET LLC. The issuance of licenses in record time indicates the presence of “connections” in government agencies. In KRAIL, the Ministry of Digital Transformation and the Cabinet of Ministers in general. A logical question arises: have the sanctions become just a PR campaign that has no real consequences?

How does the scheme work?

The activities of PariMatch in terms of financial fraud and tax evasion can become a textbook for corrupt officials:

  1. Transaction misdirection. Payments for gambling are disguised as payments for consulting services or marketing advertising. This allows avoiding the recognition of income as gambling, which is subject to high taxes.
  2. The proceeds are transferred to foreign jurisdictions, which complicates their monitoring.
  3. Although Ukrainian legislation prohibits the use of cryptocurrencies in gambling, casinos actively use them as a payment method, reducing the ability to track financial flows.
  4. Customer data is often sold to third parties, including companies from Russia.

Experts estimate that the Ukrainian budget loses hundreds of millions of hryvnias annually due to the shadow activities of PariMatch. In 2022, the expected tax revenues from the gambling business amounted to only 30% of the projected amount, which is a direct consequence of the use of evasion schemes.

In addition, the lost funds could have been used to supply the Armed Forces or restore the destroyed infrastructure, but they end up in the pockets of corrupt officials and international criminals.

Corruption and lack of control

In recent years, PariMatch has repeatedly been at the center of corruption scandals. Lobbying for the company’s interests at the level of high-ranking officials, quick licensing, and ignoring the NSDC sanctions indicate the large-scale influence of PariMatch on government agencies.

Why is this happening? The answer is simple: profit. Participants in the scheme receive huge kickbacks, while the company continues to operate with virtually impunity.

In addition to economic losses, PariMatch’s activities pose a threat to national security. The company’s ties to Russian structures are a cause for concern, especially in times of war. Every hryvnia that goes to Russia can be used against Ukraine.

What’s next?

Investigating PariMatch should be a priority for law enforcement agencies. Among the top priorities:

  • Conduct a detailed audit of the company’s financial transactions.
  • Bring to justice the officials who facilitated tax evasion.
  • Stop issuing new licenses to subsidiaries.

To this end, we have already sent materials to the controllers, but when we will receive a response is a rhetorical question.

Did you witness a crime?

Let us know about it. We will help protect the violated rights!

Share the post:

Last news

ALL NEWS ALL ARTICLES