07.06.2024 Cybercrimes

Gambling in the Armed Forces. Who is helping illegal casinos rob Ukrainians during the war?

The problem of gambling addiction among the Ukrainian military is becoming increasingly known. Pathological gambling is a dangerous way to distract yourself, as the amount of money lost in online casinos is many times higher than donations and all volunteer help.

For example, in 2023, the revenues of the leaders of the gambling business in Ukraine increased 28-fold to UAH 54.9 billion. At the same time, the total amount of taxes paid by the industry last year also increased and reached UAH 10.4 billion. However, legal players are only one side of the coin.

Reaction of the state authorities

On 20 April, the President enacted a decision of the National Security and Defence Council to counteract the negative effects of online gambling.The Ministry of Health, the Ministry of Social Policy, the Ministry of Digital Transformation, the Security Service of Ukraine, the Office of the Prosecutor General, the National Bank, the Commander in Chief of the Armed Forces, etc. were supposed to work on this.But who is actually fulfilling their responsibilities?

Ministry of Digital Transformation.The Ministry of Digital Transformation ordered to hold negotiations with Apple and Google within a month to ban the placement of gambling apps without a relevant licence in the UA zone in their stores.

The Ministry reported that it had already done so. Companies were provided with a list of unlicensed apps prepared by the Commission for Regulation of Gambling and Lotteries (CRGL). Corporations are urged to check and block illegal apps. But negotiations are still ongoing.

Law enforcement agencies.Officials of the Bureau of Economic Security and the Office of the Prosecutor General report daily blocking of websites with illegal online casino resources and combating offline gambling halls.

On the initiative of the NON-STOP organisation, criminal proceedings were also initiated against the wave 4444 casino chain, which operated without a licence:

  • The Zakarpattia Regional Prosecutor’s Office registered the case in the Unified Register of Pre-trial Investigations under No. 42024070000000073 (Part 1 Art. 203-2 of the Criminal Code of Ukraine)
  • The Lviv Regional Prosecutor’s Office registered the case in the Unified Register of Pre-trial Investigations under No. 42024140000000111 (part 1 of Art. 172 of the Criminal Code of Ukraine)
  • The Territorial Department of the Bureau of Economic Security in Volyn region registered the information in the Unified Register of Pre-trial Investigations under No. 72024031150000012 (Part 1 of Art. 203-2 of the Criminal Code of Ukraine).

To recap: “‘Wave 4444‘ is a casino chain that is located all over Ukraine. For example, in Kyiv alone, there are 86 establishments, each of which operates completely illegally, without a licence and does not pay taxes. 

The network does not take measures to prevent persons under the age of 21 from entering gambling facilities and participating in gambling; does not take measures to combat gambling addiction (ludomania), including not placing information materials on gambling addiction and responsible gambling, including limiting the age of the player, the chances of winning, the principles of responsible gambling, signs of pathological and problem gambling addiction, and places where help is available in case of gambling addiction.

The police have already launched proceedings and “investigations”, but no real progress has been made.  We believe that, in fact, our materials only helped the security forces to collect extortion – to visit gambling halls. This is the way our police system is built – to start an activity, take a bribe and stop the investigation just as quickly.  

Therefore, next time we will also mention the names of law enforcement officers who specialise in white supremacy. 

Online casino tax evasion schemes

The use of card-to-card schemes is becoming more and more common. This means that online casinos control a large number of cards of individuals to which players transfer payments to replenish their gambling accounts. The same cards are then used to withdraw funds in the opposite direction.

There are more than 51 million active payment cards in Ukraine. This means that at least one expense transaction has been made with them in the last month. In a month, Ukrainians make card-to-card transfers worth more than UAH 100 billion.

It is not easy to catch illegal casino operations in this flow. Especially if there is a chance of harming volunteer fees, which account for a large proportion of these transfers.

Cryptocurrencies also make it possible to avoid any prohibitions and sanctions, as they are outside the scope of Ukrainian and any other regulation. Nevertheless, it is not always convenient for an average player to top up their gaming account in this way. Nevertheless, when we talk about the gambling addiction epidemic, the target audience is the mass player.

Illegal casinos have also taken care of gamblers in Poland. There, Ukrainians have the option of replenishing their gaming account through the extremely popular Blik system in the country.

However, unlike the schemes in Ukraine, the Polish mechanism involves a player buying USDT stablecoins and depositing them into his or her gaming account. Apparently, the Polish Banking Supervision Commission would not allow such rampant p2p transfers as the National Bank of Ukraine is tolerant of.

Conclusion

The mechanism of replenishing gambling accounts of illegal casinos via p2p transfers from Ukrainian bank cards works despite the ban on websites. Casinos are always one step ahead and manage to create new sites faster than the government tries to close them.

On the contrary, law enforcement officers are interested in casino activities, as they receive their own kickbacks from winnings and cover up their activities.

I have information – where to go?

Report illegal gambling businesses to the chatbot or email info.nonstopukraine@gmail.com 

Important: we do not disclose personal data. All requests remain anonymous.

Did you witness a crime?

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

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