Ukrainian regulator wins case over Ibox Bank gambling licence

The KRAIL had cancelled the bank’s licence to offer gambling services.

Ukraine.- The Ukrainian Gambling and Lottery Regulation Commission (KRAIL) has won a legal case brought by Ibox Bank. It had contested KRAIL’s decision to cancel the bank’s gambling licence after the Economic Security Bureau of Ukraine (ESBU) uncovered a criminal conspiracy.

The financial watchdog revealed a tax evasion scheme involving more than 20 Ibox subsidiaries and several gambling operators. It accused them of evading more than UAH 400m (€9.80m) in tax by accepting “miscoded” payments and bank transfers through unlicensed online casino and sports betting operators.

Users topped up their accounts on the sites by depositing cash at self-service terminals. The gaming businesses then credited the funds to their current accounts, even when the numbers didn’t coincide with stated revenue. Ibox was accused of handling UAH 20bn.

KRAIL cancelled Ibox’s gambling licence after carrying out its own probe, but the bank sued, claiming that the decision damaged its reputation. However, the Supreme Court said the regulator’s decision could not cause a loss of reputation since gambling services are not related to its activity as a bank.

Ukrainian government proposes replacing gambling regulator

Last week, the Ukrainian deputy prime minister and minister for digital transformation Mykhailo Fedorov submitted a draft law that would dissolve KRAIL and create a new more centralised executive body to regulate the sector.

Fedorov said he had submitted the bill to the state legislature, the Verkhovna Rada, because of KRAIL’s long delays in issuing gambling licences. The problem has been KRAIL’s collegial structure, which requires at least five of its six members to be present at a committee meeting to approve a licence application.