Bookmakers and online casinos annually launder UAH 54 billion in Ukraine. In the scheme, the National Bank, banks, payment systems, chain stores, gas stations and grain exporters
A member of the Committee on Anti-Corruption Policy and a People’s Deputy of the Servant of the People Oleksiy Zhmerynetsky described schemes for laundering billions in gambling business in a column for the publication Censor.
As it turned out, the total turnover of legal and illegal gambling business is 12-15 billion UAH per month. Or UAH 180 billion a year. At the same time, they paid UAH 730 million in taxes and UAH 1.16 billion in license fees to the state budget for 2022. Or together 1.2% of turnover. According to SBU estimates, 95% of companies in the market do not pay taxes at all.
How do they launder money?
The most popular scheme is the so-called “matching”
Casinos, six banks, in collusion with NBU employees, supermarket chains and gas station chains, launched a system for paying shadow wages to employees of these networks.
When an online casino player deposits a betting account and receives virtual points for playing, real money goes to the payment system server under the guise of a transfer for a random individual, but actually goes to the salary of a store clerk or gas station cleaner.
This transfer of the player can “hang” for weeks in the payment system until the final recipient is determined, so the salary of the conditional cleaner of the gas station arrives during the month in installments in the form of transfers from random casino players.
Banks from whose accounts players transfer money ignore the fact that the transfer does not contain data on the final recipient of money, but “freezes” in the system.
Instead of this black salary, stores and gas stations provide gambling companies with cash. The companies then use this cash to buy grain from “black” farmers, which is exported abroad, and the proceeds from the sale of grain abroad are received by the owners of gambling companies.
Another way to withdraw money is because of the cryptocurrency.
The second scheme is the so-called “miscoding”
Players make deposits on gambling sites for betting, but these payments go to the bank with a code to buy flowers or movies.
Or players transfer bank funds with the correct transaction code 7995, but then the bank, in collusion with gaming companies, sends these funds to fictitious accounts.
In Ukraine, 9 banks acted in such a criminal way, of which 6 banks were systematic, they serviced the vast majority of all illegal money transfers in the country. And one of these banks serves half of all illegal transactions so far.
Payment terminals (payboxes) are massively involved in the schemes, at night thousands of fictitious transactions are generated on them between cards of individuals. 2 million bank cards and 120 payment terminals were involved in criminal schemes.
According to the SBU, UAH 54 billion, or 30% of the turnover of the game, is laundered a year — this is the gross income of the organizers. 25% of this amount is spent on expenses for organizing a criminal scheme – bribes and earnings of all intermediaries, and this is UAH 13 billion. Another 5% goes to illegal advertising of gaming tools.
That is, the net profit of gambling companies is UAH 36 billion per year, or 20% of the total turnover, which organizers receive abroad without taxes and accounting.
Zhmerynetsky writes that the state budget annually loses about UAH 10 billion in taxes.
Until September 2022, none of the authorities “knew” about the existence of these schemes. The National Bank “did not notice” that scheme transactions were being carried out through the accounts until the staffing of the relevant department was completely changed. State financial monitoring also did not notice these transactions.
The SBU and BEB opened 45 criminal cases, but one bank still operates, servicing half of all illegal gambling transactions.
Among the suspects are employees of the National Bank, banks and fintech companies that provided software for fraud.
97% of all 54 billion hryvnias laundered are produced by companies with Ukrainian licenses, not these thousands of illegal sites.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.