13 Mar 2023 16:40
Sanctions endorsed by Zelensky target gambling businesses and bookmakers, including offshore companies
MOSCOW. March 13 (Interfax) – Betting giant Parimatch LLC has officially suspended its operations in Ukraine, Ukrainian media said, citing the company’s press release.
“The company’s operations have been suspended. The platform is unavailable to clients. The pm.ua website has been blocked,” the company said in its press release circulated on social media on Sunday.
Parimatch said that it is acting in compliance with Ukrainian legislation and President Vladimir Zelensky’s decree dated March 10.
The company also said in the press release that it is looking for a legal refund mechanism and for a mechanism to repay debts under partnership agreements.
The company said that it will terminate “employment relations with the team.”
Taxes and license payments transferred by the company for 2023 stand at 485 million hryvni, it said.
“We will expect an additional analysis and consideration of the situation around the National Security and Defense Council’s [NSDC) sanctions against Parimatch LLC, and will hope that this decision will be revised in the future,” the company said.
Ukrainian media also said, citing Parimatch holding CEO Maxim Lyashko, who said at a press conference on Sunday that Zelensky’s decree on sanctions against Parimatch LLC and a number of the holding’s other companies caused it to stop almost all its operations in Ukraine.
“Overnight, banks began switching off the function for the clients to withdraw their money. Some 250 million hryvni of the clients’ money was blocked. These funds are in the company’s current accounts,” Lyashko said, adding he is hopeful that the clients would be able to access their funds.
Natalia Gilevich, general director of Parimatch LLC, which holds a bookmaker’s license and an online casino’s license in Ukraine, said, in turn, that the company has several tens of thousands of clients.
Banks started to sever relations with the company two-three weeks ago, and state-owned banks were the first to do so, Lyashko said.
The sanctions affected the key B2C companies of the holding, for which the Ukrainian market was a major one, he said. The holding also has B2B companies, he added. (In January 2023, the holding announced the launch of a new company, GR8 Tech, which would operate on the B2B market and became Parimatch Tech’s successor).
When speaking about the Ukrainian sanctions’ impact on the holding’s operations on other markets, Lyashko said that it will be almost impossible to mend the reputational damage that has been caused, however, the Ukrainian sanctions do not apply to other markets and there is no widespread practice of other jurisdictions adopting sanctions in Ukraine’s wake.
The Parimatch CEO reiterated that the company perfectly understands what it was sanctioned for.
Due to a transition to a 2% simplified tax, the company paid 280 million hryvni in taxes last year, and, after this option was abolished, over 400 million hryvni in January-February 2023 alone, Lyashko said, adding that it planned to pay 250 million-280 million hryvni in March and to post proceeds on a matching scale.
As reported, President Zelensky signed a decree on March 10, enacting the NSDC’s decision adopted earlier that day to impose sanctions on 120 individuals and 287 legal entities, among them Ukrainian companies such as Parimatch LLC, Leo Financial Company, PokerMatch UA, Your Betting Company, and Play Fan Investment.
As regards the Parimatch holding, the new sanctions also target Parimatch United Investments Limited (UK), Fullgear Investments Ltd and Auspicia Limited (both registered in Cyprus), Suncast Furure N.V. (Curacao, Netherlands), Parimatch Foundation Limited (Cyprus), and a whole group of individuals abroad.
The decree affected three out of the five companies licensed by the Commission for Regulation of Gambling and Lotteries: Parimatch, Your Betting Company and Play Fan Investment. The commission had earlier canceled the licenses of the latter two – in September and December 2022, respectively. The other two companies still on the register are the FavBet bookmaker and Vbet Ukraine.
Among the Russian gambling businesses targeted by the latest sanctions are Sportloto LLC, First International Bookmakers Company LLC, Bet.Ru LLc, and CreditService LLC.