Parimatch’s Ukrainian operations suspended as part of government crackdown
President Volodymyr Zelenskyy signs off on a decree sanctioning 287 companies and 120 individuals with links to Russia
Three of Parimatch’s subsidiaries have seen their Ukrainian operations suspended for 50 years following a new decree enacted by the country’s president, Volodymyr Zelenskyy, on Friday.
Zelenskyy moved to sanction 120 individuals and 287 entities connected to gambling under the auspices of the National Security and Defense Council of Ukraine (NSDC).
The sanctions come in the form the introduction of changes to personal special economic and other restrictive measures after Zelenskyy said the gambling businesses implicated in the decree had “withdrew funds from our state and financed various Russian schemes”.
The three subsidiaries included are Parimatch LLC, Parimatch Foundation and Parimatch United Investments.
At the time of writing, Parimatch has suspended its activities in the market and its Parimatch.ua website has been blocked.
In a LinkedIn post, the CIS-focused operator laid out its three-point strategy for the immediate future following the termination of operating activities and the website block.
The operator said it was committed to returning money to its customers and said all funds were “currently safe, frozen and will be transferred in full”.
Parimatch also said it would cancel its existing employment contracts as it cannot fulfil its obligations to staff. The firm added that it would also suspended all of its partnership contracts as well, with a view to repayment of financial debts too.
The operator also stated it had paid a total of UAH485m (£10.96m) in taxes and licence payments for 2023.
In its closing statement, Parimatch said it expects further analysis from the NSDC and is hoping for a future review of the decision.
In March 2022, Parimatch pulled its franchise operations from Russia following the invasion of Ukraine, with the firm continuing to donate to the war effort over the last 12 months.
The company employs more than 2,000 staff in Ukraine.
Other companies sanctioned include BetCity, Marathonbet, Sportloto, First International Bookmaking Company, Bet.ru, CreditService, Sportbet and Matchbet.
As part of the suspension, the companies will have their assets frozen, and players will not be allowed to withdraw funds from Ukraine.
The government has also enacted sanctions against 120 individuals from the UK, Cyprus, the Netherlands, Poland and Armenia.
EGR has reached out to Parimatch for comment but has not received a response at the time of writing.
Yulia Sviridenko, First Deputy Prime Minister of the Ukrainian Government said: “Our special services checked significant work on the verification of persons associated with the aggressor state […] we are closing another source of tax replenishment of the Russian budget.”
On the new decree, Zelenskyy said: “These are more than 280 companies and 120 people who, through gambling business schemes, worked against Ukraine, withdrew funds from our state and financed various Russian combinations.
“The solution was prepared for some time; it has been thoroughly worked out and closes schemes worth tens of billions. And this is not the last such decision.”
The decree came after NSDC had issued the sanctions, and the further sign-off by Zelenskyy came on 10 March.
NSDC secretary Oleksiy Danilov has been entrusted with the implementation of the sanctions.
Hennadiy Novikov of boutique consulting firm 4H Agency said: “Separately, it is worth noting that the decision of the National Security and Defense Council instructs the Ministry of Foreign Affairs to inform the competent authorities of the European Union and the United States and other states about the application of sanctions and raise the issue of applying similar measures on their part.
“Seeing how the Ukrainian government has focused its efforts on the application of sanctions on Russia-related businesses and individuals, it would be fair to assume that Ukrainian sanctions is not the end of the story for the included individuals and companies.”
Last week it was announced that the government had reneged on a policy which included the right for gambling operators not to pay licensing and equipment fees for the period of martial law and three months after it ends.
This has left licensed operators with a race against time to pay off their “debts”.
Also, last month, Zelenskyy enacted a bill preventing gambling firms from benefitting from the simplified 2% taxation system brought in following the Russian invasion.