On September 6, the State Fiscal Service wrote on Facebook that they discovered an international online casino with an annual turnover of $30 million. They did not mention its name in the release, as usual. The editorial board of AIN.UA succeeded in finding out which company it was.
What happened
The SFS presented in its release a scheme of how the company should have organized an illegal online casino in Ukraine for foreign markets where such activity is prohibited.
“During the investigation, our officers found out that in Kyiv, over 60 people worked in a single office — both Ukrainian and foreign citizens, the legality of whose stay in Ukraine is checked at the moment,” said the SPS release.
The main business areas of the company are the development and administration of online casinos and the support for several gambling provider sites.
According to the report, in the past year, the non-taxable turnover of this business in Ukraine was over $30 million. The cash was supposedly transferred with various financial means, including cryptocurrencies.
Their business went through several individual entrepreneurs registered within Ukraine, and according to the authorities, they were used to hide violations. In particular, the casino runners haven’t declared the real income of the casinos and correspondingly not paid taxes. During the search, the SFS officers discovered gaps in the company’s employee tax reports and large amounts of not paid social tax.
The officers seized unaccounted cash, seals of a non-resident company, individual Ukrainian entrepreneurs and legal entities, document drafts, hard drives, computers, etc. The investigation continues.
What about online casino
The “discovered” scheme of a casino, working in several countries illegally, is mentioned in the SFS release several times. But it is stated only at the end of the article that Ukrainian authorities did search the company because of non-paid taxes. However, discovering illegal casino businesses working from Ukraine abroad does not belong to the jurisdiction of the SFS of Ukraine. There is also no information about the participation of the cyberpolice in searches.
It is also noteworthy that two weeks before the visit, the legal entity of this online casino — SEO CORE LLC — received a gambling license in Ukraine. “This information looks especially strange in the context of the fact that on September 25, 2021, the Ukrainian SFS should end its existence, pending the creation of a unified Economic Security Bureau, the ESB,” said a source familiar with the situation in the market.
About Gamingtec
In the release of the SFS have been published photos of the Kyiv office of Gamingtec. Here are pictures of the Fiscal Service:
And here’s a photo from the Gamingtec website (turn attention to the wall):
It is a developer of casino and betting platforms and a provider of payment solutions, marketing tools, and technical support. By the way, the office looks in the photos of the SFS like a call center, not a development office. Now there are over 3,000 games based on the Gamingtec platform. The company is registered in London and has a large R&D center in Kyiv near the Universytet metro station. There work about 80 employees. In total, the company has 100+ workers.
In response to a request of AIN.UA about the search, Gamingtec replied that the SFS came to the office of SEO CORE, which is a partner of the company in gambling software development and has a special Ukrainian license:
“Gamingtec is neither a Ukrainian company nor legal entity but an umbrella brand for the producer of online gambling and iGaming software. Therefore, we are not talking about a search at Gamingtec. So, there was a search at SEO CORE, which has a Ukrainian license for gambling software development. SEO CORE is among the partner companies of the Gamingtec brand.”
Reasons for the search
The Gamingtec‘s management believes that the SFS did it due to motives of corruption.
“Although just a few days ago, SEO CORE got the gambling software development license, this investigation looks like a reaction to granting that license from the Ukrainian Gambling and Lottery Commission (UGLC).
That incident in Ukraine will not directly influence the operation of companies that use the Gamingtec brand worldwide. It may harm the reputation of Ukraine as a jurisdiction for software developers. We are thinking about a recommendation to worldwide Gamingtec partners not to consider Ukraine in their further software development projects,” said a representative of Gamingtec.
Gamingtec also confirmed that they already think about leaving Ukraine and terminating the cooperation with Ukrainian companies.
Details from SEO CORE
According to the company representatives (we did not receive a copy of the document), the court decision contains only the address of the office rented by SEO CORE but not its name. There are also multiple charges against the company:
- about 100 illegal workers of Turkish nationality
- illegal transactions with cryptocurrencies
- avoiding taxes
- not paid social tax
- tax return overdue
- organization of illegal gambling
“However, the court decision contains no link to the Article 203-2 of the Criminal Code of Ukraine (illegal activity to organize or conduct gambling or lotteries),” admitted SEO CORE representatives in the commentary for AIN.UA.
“The Migration Service of Ukraine and an inspector of the State Labor Agency were also involved in the search, so they checked if the workers were registered properly. It could disappoint someone, but they found no unregistered Turkish or other foreign citizens in the office. All employees have required documents and work in Ukraine absolutely legally,” added in the company.
Damage done
After searching SEO CORE, the officers seized 120 units of computer hardware. According to the company workers, the officers also seized servers, laptops and cellphones, and even personal funds of employees that the officers found in the office.
The management believes that the cause of that search was the license issued for SEO CORE on August 25.
“We have been developing software for the gambling industry for several years. For all our clients, we provide this very service. It can also include client staff assistance if technical issues arise. Before gambling legalization, there was no special regulation in Ukraine; that is why there were many different opinions about what online gambling is and how to separate software development from it. Of course, there were many misunderstandings in communication with authorities,” the company commented.
“Now there is a new law in Ukraine, so we have got all the documents and applied by the UGLC for a gambling software developer license (literally, a license for conducting actions in the area of gambling service providing). And today, you can see the result.”
What casino was that
Based on the photo published by the SFS, it was BetTilt. It is an online casino working in Australia, Canada, Finland, Germany, India, Japan, Norway, and Turkey. It is not working in Ukraine.
Probably, it was BetTilt which software was developed and supported by the IT company from Kyiv that was searched recently by the Ukrainian police officers. According to their annual revenue of $30 million, it is a legal small-sized company doing business in the area of online casinos.
The Gamingtec representatives did not confirm if BetTilt is their client.
