What’s happened

The cyber police found that the members of the criminal group had created a company, allegedly for the development of web resources and online games in Ukraine. In fact, they provided services for the creation, technical support, and customer service of online casinos. The company has also developed bespoke gambling platforms.

The customer paid $20,000 and received the ownership of the online casino with its constant support. For an additional $100,000, the company set up Internet marketing to promote the resource on the network and attract new users. According to preliminary data, the company’s monthly income was over $ 500,000.

The police have found over 20 online casinos, the developers and administrators of which was this company. They are now blocked. The user base of their web resources consisted of about 500,000 people.

Law enforcement officers searched the office of the developer company, seized computer equipment, mobile phones, draft documents, and money for examination.

About the company

According to the law, until the investigation is completed, law enforcement officers cannot disclose any names and names of suspected legal entities. Therefore, the release does not say what company it is. It is only known that the office is located in Kyiv. The company’s staff consisted of more than 80 IT professionals.

Also, the press service of the cyber police published photos from the company’s office.

Photos: Cyber Police

Based on the photos, we can assume that this company is Soft2bet. The company bills itself as a European product tech company in the field of online entertainment, developing turnkey online casinos on its engine. In the Soft2bet portfolio, there are 7 Stars Partners (7SP), online casinos Malina Casino, YoYo Casino, and Buran Casino, etc.

Soft2bet offices are located in Bulgaria, Serbia, Portugal as well as in Cyprus and Malta. The company has employees in Kyiv (you can find them on LinkedIn), but the Kyiv office is not mentioned on the Soft2bet website.

However, it exists and is located at 14V Vasylkivska St., in the business center Stend. The company is actively hiring people in Kyiv. There are 13 job openings on DOU.

Photos: Jubee

The editor of AIN.UA sent a request to Soft2bet but has not received a response at the time of publication.

The final version with all the amendments of people’s deputies is not yet available on the website of the Parliament. The June edition of the bill proposed such regulations:

• The allowed activities include casinos, online casinos, betting shops, slot machines, lotteries, and online poker. Businesses must obtain a license to conduct such activities.
• Lotteries, sports poker, billiards, and bowling are not considered gambling.
• Casinos can be placed in specific locations: five-star hotels with at least 100 rooms (150 for Kyiv), suburban complexes with an area of at least 10,000 square meters, or special gambling zones.
• Betting shops can be located in three- to five-star hotels with at least 25 rooms (50 for Kyiv) and on racetracks.
• Licenses are issued for five years. Prices for licenses depend on the size of the minimum wage. According to the text for the second reading, for example, the price of the license for online casinos is 6,500 minimum wages for 5 years (about ₴30.7 million for 5 years, or slightly more than ₴6 million per year).
• There is an online record of market operators kept in the country: it is a state-maintained system that all licensed companies must be connected to.
• Players in such places must be identified: in particular, citizens under the age of 18 must not be allowed to gamble (in the previous version, this restriction was applied to 21 years old persons). There is a register of persons who are restricted access to such establishments.

Details of the June edition of the bill you can read in our previous peace.

AIN.UA has found the document and picked out the main points. For example, licenses for online casinos have become several times cheaper.

Background

The Law “On Prohibition of Gambling Business” has been in force since 2009, and Article 203-2 of the Criminal Code establishes criminal liability for such activities. At the end of 2019, the Parliament failed to pass several bills on the legalization of gambling. After that, by order of the Cabinet of Ministers, authorities began closing down casinos and gambling halls. In January 2020, Verkhovna Rada reconsidered the legalization of gambling and adopted the bill in the first reading.

What was proposed in January 2020?

The version of the law supported by the deputies in January contains such provisions:

• The allowed activities include casinos, online casinos, betting shops, slot machines, lotteries, and online poker.
• To conduct such activities, a business must obtain a license.
• Licenses are issued for five years; the prices are: 12,500 minimum wages per year (UAH 59 million per year) for online casinos, upfront payment is required; 120,000 minimum wages for a five-year license, i. e. UAH 566 million for five years, or UAH 113 million per year, for bookmakers.
• Gambling software developers also need a license.
• There is an online record of market operators kept in the country: it is a state-maintained system that all licensed companies, etc. must be connected to.

What does the June version propose?

As of June, the amended bill differs from the January version in some substantial details:

• License prices have become several times lower. For example, an online casino license price equal to 6,500 minimum wages (against 12,500 minimum wages per year in the first reading).
• Moreover, licenses are issued for five years, and the wording “per year” has been removed from the text. This means that, whereas previously online casinos were offered to pay 12,500 minimum wage per year, now it is 6,500 minimum wages, spread over five years (i. e. approximately UAH 30.7 million for 5 years, which is just over UAH 6 million per year).
• The price for bookmakers has also been reduced: 30,000 minimum wages for five years (previously, 120,000 minimum wages). Meaning, that under the amended law, companies would have to pay UAH 28 million per year.
• One more important point here: under the earlier version, casino software developers could be subject to the license-buying rule. In the latest version, the bill’s authors distinguish between gambling software supply services and the development of the same software. License is needed specifically for the software supply services. Now, if Ukrainian programmers develop programs for a company that is going to supply software for casinos, they need no license.
• The online registration system for gambling market operators has been preserved.
• As contrasted with the January bill, companies are required to have a website with the domain extension .ua, but there are no second-level domain restrictions, so extensions like .com.ua or .net.ua are acceptable. The January version demanded a website with the country-code top-level domain (available just for registered trademark holders). Now, a casino can have a website not only at, say, casino.ua but also at casino.com.ua or casino.net.ua.
• Similarly to the January bill, separate licenses should be obtained for online casino activities and bookmaking.

Murka

Murka was established in 2011 and is known for such social casino brands as Slots Journey, Slots Journey 2, TX Poker, S&H Casino, Vegas Slots, Royal Fortune Slots, Bubbla Cadabra, Scatter Slots and others.

The key feature of the social casino genre is its legality – one cannot convert their winnings into real currency. Such games are available in mobile app stores and on Facebook. The publisher of social casino games profits from in-game content and/or on ad impressions. According to various sources in 2018 publishers on the global market of social casino games raised somewhere between $3.2 billion to $3.46 billion only from mobile platforms.

Terms of the deal

The notice of Blackstone Group says that a shell company Tribe Cyprus Bidco Ltd will be established to support the deal.

Presently, Kyiv, Dnipro, and Lviv offices of Murka employ over 100 employees. The terms of the upcoming deal have not yet been commented on by the company. One of the principal investors of the company is an international asset management firm Noosphere founded by Max Polyakov.

Previously we informed about the acquisition of an Israeli developer and publisher of social casino games with offices in Ukraine Playtika by a Chinese consortium for $4.4 billion.

The Investigation Department of the National Police of Kyiv is investigating the work of the online casino Azino777. According to law enforcement officers, casino administration was operating through the Royal Game company, registered in Ukraine. Its establisher and owner is a 33-year-old Russian IT specialist Albert Valiakhmetov. The name of the owner was figured out by The Bell journalists according to Ukrainian court documents.

What is Azino777?

Online casino Azino777 is one of the largest in runet. In the Russian Federation, the related to it sites are blocked and still continue to be blocked, however, the casino continues to operate. According to RBC, the total amount of interest rates per year is estimated at about 15 billion rubles (about $228 million). According to the Mediascope study, in the first half of 2018, this casino became the largest advertiser of the runet in terms of video advertising (7.1% of impressions), overtaking such TMs as PepsiСо and Yandex by the number of impressions, reports TJournal. The casino is well-known, including thanks to aggressive online advertising: viewers of pirated online cinemas have seen its video ads more than once, where the rapper AK advertises the service: “Everyone says: AK, and how to raise the money? Azino-three-axes, the game is on.”

The RBC editor who registered at the casino wrote in his investigation that letters from the online casino support service come through the Yandex service from Moscow’s IP addresses. However, it turned out that the casino owner managed it through a company established in Ukraine.

Why are the Ukrainian police involved?

In June 2018, in the Kyiv office of Royal Game, Ukrainian police officers conducted a search within the criminal investigation under Art. 203-2 of the Criminal Code of Ukraine (operating gambling business), since gambling in Ukraine has been banned since 2009.

During the investigation, law enforcement officers discovered that starting from 2014 until the present time, citizens of the Russian Federation and Ukraine organized the activities of the online casino Azino777 in Kyiv. These individuals developed electronic games and simulators for gambling, as well as administered the sites azino777.com, azino777.net, 777azino.com, 777azino.net, azino-777.com, and others. During the search, police officers seized computers, mobile phones and flash drives, on which they found files related to the activities of Azino777.

In court rulings on search, examination, and so on the casino managers are not named, however, The Bell journalists have found other documents by the case number, where the owner of the company is listed.

Using the name and EDRPOU (Unified State Register of Enterprises and Organizations of Ukraine) code of the company from court documents, which is LLC Royal Game, 39191558, you can make sure that Albert Valiakhmetov is its head manager. It is impossible to reach the Valiakhmetov over the number indicated as the one listed in registration documents, the caller is redirected to the answering machine.

How was the work of the company organized in Ukraine?

According to AIN.UA, a team of about 15 people under the Orion Lab brand was involved in the work of the casino in Kyiv. In the Russian Federation, Alfa Script company, located in Naberezhnye Chelny (registered at Mashinostroitelnaya Str. 91a, office A707 (7th floor, IT park), is engaged in development, one of its managers is Stepan Sobchik. In the Kyiv casino office, located next to “Palace Ukraine”, developers, designers and marketers worked. The connection between Orion Lab and Azino777 is indirectly indicated by the domain orionlab.ru (which is now unavailable) which was on the same IP address with azino-azino.com and azinoazino.com, and also had a common Azino Subdomain – v16.orionlab.ru, as well as Shared SSL Certificate –orionlab888.com. The employees of the company have gambling indicated in their resumes as current occupation. However, the last months of work end in 2015, which suggests that the company has closed or changed its brand in Ukraine.

Photo of the alleged casino organizer, source: The Bell

The organizer of the company, Albert Valiakhmetov, does not have large property or companies in the Russian Federation. Valiakhmetov lived in Naberezhnye Chelny (Azino777 has one more office there). According to The Bell, in 2013, he began to travel to Kazan and Kyiv, at the same time the Azino domain appeared in the .ru zone. At the same time, he deleted accounts in all social networks. In the summer of 2015, Valiakhmetov opened n Royal Game bank account at the Kyiv branch of Sberbank, through which a part of the casino payments was processed.