It is no secret that gambling has always been a profitable business. The legalization of gambling brought a large portion of taxes to the budget. However, not all the money from online casinos and land-based gambling halls went to the state budget. The main reason for this is the “shadow” accounting of casinos. Read on to find out what schemes law enforcement officers have uncovered in the work of gambling facilities.
Not all online casinos operate legally. On https://inscribemedia.co.uk/, you will find the best licensed gambling establishments that honestly pay out the money won. Not so long ago, a scheme was exposed whereby some online casinos and bookmakers did not add huge amounts to the budget. According to preliminary estimates, the market turnover amounted to 12-15 billion hryvnias per month.
Fraudulent casino schemes
On February 28 this year, the Temporary Investigation Commission on Economic Security was convened. It included members of the Verkhovna Rada, representatives of the tax service, the National Bank, the Security Service of Ukraine, and the KRAIL commission. The incredible scheme allowed to withdraw almost $1 billion in a year! What methods did online casinos use to withdraw money to avoid paying taxes?
Method one: misdirection
This term refers to a scheme whereby all transactions are carried out under a code that differs from the gambling code when players replenish their balance. Usually, all money for a deposit in an online casino is credited under a special code 7995. The fraudsters spent all these amounts under other codes, such as “selling flowers”. Players did not even suspect that they were replenishing their deposits illegally.
Method two: crediting to third-party accounts
All the money that online casino players made to their deposits was credited to the accounts of third-party companies. For example, these could be private entrepreneurs whose activities are in no way related to the gambling business.
Many of the suspects in such money transactions were employees of the National Bank. They provided online casinos with software for withdrawing funds through third-party accounts. Interestingly, the National Bank did not “notice” the transactions until the staff of the department responsible for online casinos was changed in September 2022.
Method three: matching
This scheme is the largest and most costly for the budget. The scheme involves several participants:
- banks
- online casinos
- supermarkets;
- gas station chains.
The essence of the scheme, under which online casinos withdrew money to avoid taxes, is impressive:
a player makes a deposit on the website of a gambling establishment;
the money deposited is transferred to the processing center;
the funds are waiting for an application for the payment of “black” wages to the cards of gas station or supermarket employees.
Thus, online casino players transferred their own money to the cards of strangers. At the commission meeting, SBU representative Artem Shilo told how the scheme was exposed. At night, during the curfew, a lot of activity was noticed in payboxes and transfers of funds between cards of individuals.
All participants in the scheme were profiting from it. Supermarkets and gas stations paid lower taxes on employee salaries. All funds were given to online casinos in cash, which then withdrew money abroad in cryptocurrency.
According to SBU estimates, this scheme allowed laundering up to 54 billion hryvnias a year. Of this amount, 13 billion was spent on organization costs: bribes and intermediaries’ earnings. Another UAH 2.7 billion was spent on advertising.
Thus, the net profit from this illegal scheme amounted to about 36 billion hryvnias per year. And the Ukrainian budget did not receive money in the amount of about UAH 10 billion in taxes.
Banking scheme
A total of 6 banks became full participants in the fraudulent scheme. Their task was to “not notice” illegal transactions. The banks also ignored the absence of the final recipient of funds in the payment documents.
The full list of banks involved in online casino fraud schemes is not disclosed. Only some of the participants have been identified:
Ukrgasbank (a state-owned bank!);
- Concord Bank;
- Ayboks Bank;
- MTB Bank;
- Oxi Bank;
- Sense Bank (formerly Alfa-Bank);
- Unex Bank.
The latter categorically denies its participation in the scheme, which did not add a large amount of taxes to the Ukrainian budget. However, given the list of participants in the process, we can conclude that most of these banks are unpopular. Their activities are focused on certain operations, including illegal withdrawals and cooperation with illegal online casinos.
