FavBet vs 1xBet: betting fights without rules

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The big shots in the gambling business have drawn the authorities, the media and public activists into their dirty showdown.

Back in 2019, when the "greens" who came to power had just started to rush around with the idea of legalizing the gambling business, many had a premonition that something monstrous and smelly would come out of it. The state budget would not swell from the sale of licenses and taxes paid by casinos and bookmakers, and the country would not turn into a flourishing Las Vegas. At least because the lobbyists for the relevant law had not even ears, but mafia horns sticking out. In fact, that’s what happened.

Large online casinos and bookmakers present in Ukraine, even if they did not have Russian roots, were historically strongly tied to the aggressor country (in terms of potential audience, this is the largest market in the former "scoop"). This was the case after the annexation of Crimea, and when our boys died in the Donetsk airport and near Ilovaisk. Bookmakers accepted bets and paid out winnings even in the ORDLO. And it seemed that 02/24/2022, when Russian missiles flew at Ukrainian cities, changed everything. Now the average person sometimes reaches out to throw something heavy in the direction of the sound of Russian speech. What can we say about some business with Russians or in the aggressor country - this looks not just disgusting, but also criminal.

It was the accusation of working with the occupiers that became the main killer argument in the war of bookmakers for the wallets of gambling slaves, unleashed by them in Ukraine. But first things first.

On September 2, 2019, six months after the election of President Zelenskyy, he gave the go-ahead to the process of legalizing the gambling business in general, and bookmakers in particular. The whole thing was presented to the public under the pretense that legalization would open the doors to the country for fat foreign investments. However, the presence in this performance, and even in the leading roles, of Boris Baum - a character associated with the Luzhniki organized crime group, suggested that the "gambling" was being legalized for former Russian bandits.

Boris Baum

However, even then experts pointed out that legalization (in the part concerning betting) was being carried out in the interests of the two largest domestic bookmaker networks – Parimatch and FavBet . They substantiated their guess by the fact that the corresponding bill was actually written by a friend of MP Davyd Arakhamiya , who was “supervising” the process from Servant of the People – Andriy Astapov , owner of the law firm Eterna Law. Among Mr. Astapov’s grateful clients is the bookmaker Parimatch. Incidentally, Arakhamiya himself was repeatedly spotted by investigative journalists in the head office of this bookmaker during the process of settling the issue of “legalizing” betting.

Both Favorit and Pari-Match have an ambiguous background.

Shvindlerman’s office - Biloruska

Founded in 1994, Parimatch is controlled by Ukrainian gambling magnate Eduard Shvindlerman and his daughter Tetyana Biloruska.

Eduard Shvindlerman and Tetyana Biloruska

As Kommentarii wrote, as a result of the ban on bookmaking companies in Ukraine in 2009, the activities of Pari-Match were outlawed. However, it managed to circumvent the ban on betting businesses by registering them as a Toto lottery (the website of the Verkhovna Rada of Ukraine provides the corresponding term : Toto lottery is a lottery in which winners are determined based on guessing the results of random events in various types of professional and (or) amateur competitions included in the published program of the lottery draw).

It is known from the ruling of the Pechersk District Court that on October 15, 2015, a search was conducted at the residence of one of the founders of the bookmaker’s office. The investigation into the fact of conducting a gambling business was conducted by the National Police. During the searches, documents, objects and things were found "that indicate the organization and conduct of gambling under the Pari-Match logo on the Internet." The company of the same name is also mentioned in the ruling.

In July 2018, Parimatch was once again “in the spotlight” in the context of a “criminal case”. As the publication “Apostrophe” wrote, according to the investigation, a virtual casino allegedly operated under the “Pari-Match” brand, which withdrew funds (up to $350 million per year) “to Russia and offshores”.

Gambling empire of Andriy Matyukha

The bookmaker FavBet (BC "Favorit", "Favorit sport") is run by a very non-public businessman Andriy Matyukha. During the gambling ban, it also operated in Ukraine as the Toto lottery.

Andriy Matyukha

As the online publication Finalmatch wrote , a number of companies controlled by Matyukha under the Favorit brand were operating in the 2000s until the casino ban in 2009. Then the network was partially transformed into a kind of "Internet cafe", lotteries, sports "poker clubs", such as the Grand Victoria casino in the capital’s Obolon. It partially switched to a virtual format, legalizing itself in jurisdictions where all regulatory "doors" are open for gambling.

The court rulings in the registry indicate that most of Matyukha’s establishments continued to operate in Ukraine between 2009 and 2020. Illegally, of course.

Most of the companies in the Matyukha group are registered in Kyiv at 21 Marshal Tymoshenko Street, Bldg. 3. According to information from the Commission for the Regulation of Gambling and Lotteries, the group held the following licenses at the beginning of this year:

1. OOO "Bookmaker Company Favbet" (43457382) - organization and conduct of gambling casino games on the Internet; brand Favbet, website favbet.ua;
2. Billionaire Casino Company LLC (43457293) — organization and conduct of gambling in casino gambling establishments, slot machines, gaming tables, Billionaire brand;
3. OOO Favorit Casino Company (44101120) — organization and conduct of gambling in casino gambling establishments, gaming tables, gaming tables with roulette, slot machines, Favbet brand;
4. OOO Favbet Game Slots (43457335) — organization and conduct of gambling in slot machine halls, Favbet brand.

At the same time, as the publication claimed, none of the companies registered to Andriy Matyukha had licenses to organize and conduct bookmaking activities, although separate permits are required to operate a casino, accept bets on sports, eSports, and online poker tournaments in Ukraine.

The gambling websites are also owned by Matyukha, who controls them through Favorit United NV (121466), a company registered on the Caribbean island of Curacao. The managing director of this company is Ukrainian citizen Igor Sosonyuk, a business partner of Matyukha.

This company carries out activities in the organization and conduct of gambling on the basis of a sublicense issued by one of the four licensees in Curacao – Antillephone NV and signed on behalf of Favorit United NV by Matyukha himself.

The agent for receiving and processing payments, in turn, is the Cypriot company Bintpash Ltd (НЕ 359736), whose founder is the above-mentioned Favorit United NV, and whose director is the same Ihor Sosonyuk.

According to registration data, Ihor Sosonyuk is also the head of Planeta-Zemlya LLC (37047683), whose participants during 2012-2016 were Andriy Matyukha (90%) and Dariya Matyukha (10%). The latter was the head of this company during those same years.

In 2016-2018, a 100% participant of Planeta-Zemlya LLC was a company from Belize, Roliatto Group ltd. (124466), which was also an applicant for one of the marks for goods and services Favbet (application number m201220783).

According to the publication, Matyukha is also the owner of the domain name favbet.com and the ultimate beneficiary and director of the UK-registered companies Andalidi Assets Ltd (08322630), Favbet Invest LLP (OC381256), Bet Invest Ltd. (08348255), Premier Property Invest Ltd. (08404215), Malta-based companies Favbet Holding Limited (C84426), Favbet Limited (C84427), and finally, the online casino favbet.eu, which operates under a Maltese license.

According to the UK Trademark Registry, the rights to the FAVBET brand are owned by the UK company Favbet Invest LLP, whose members are two UK companies, Andalidi Assets Ltd and Andalidi Invest Ltd. Both are fully controlled by Andriy Matyukha.

In addition, the British company Bet Invest Ltd is allegedly the developer of software and technical support for the group’s sites, and administration takes place at the address: Kyiv, Stepana Bandery Avenue, 8, bldg. 16-a.

In turn, Bet Invest Ltd is a 100% participant in two Ukrainian companies - "Atlant Triumph", whose main activity is computer programming, and "City Gate". The latter is registered at the address: Kyiv, Stepana Bandery Ave., 8, bldg. 39, 39a.

According to the ruling of the Dniprovskyi District Court of Kyiv dated September 11, 2020 in case 755/1439/16-k, funds received from clients of the Favorit bookmaker’s office go to the accounts of Primefort LLC, Neuron Gold LLC and are then transferred to the companies Sport Planeta LLC, Sport Arena LLC, and Sfera Max LLC.

Parity participants of Sport Planeta LLC are Andriy Matyukha and Yuriy Pylypenko. The latter is a 100% participant of Sport Arena LLC and the director of Atlant Triumph LLC, the beneficiary of which through the British company Bet Invest Ltd is Andriy Matyukha.

Sfera Max LLC is owned by Yuriy Sharipov, but during 2017-2020, its only participant was Renaissance Group LLC, controlled by Andriy Matyukha (99%).

The sole participant and director of Primefort LLC is Georgian citizen Jikia Irakli. According to Ukrpatent, in 2019-2020, this legal entity filed 27 applications for registration of marks for goods and services related exclusively to Favbet and Favorit.

Naturally, the activities of Andriy Matyukha’s semi-underground business empire were of interest to law enforcement agencies from time to time.

In 2014, the prosecutor’s office of the Svyatoshynskyi district of Kyiv organized an inspection of the legality of the activities of the network of gambling establishments BC "Favorit", which operated under the guise of distributing state lotteries. As part of the investigation of criminal proceedings under Part 1 of Article 203-2 of the Criminal Code (engaging in the gambling business), law enforcement officers conducted a number of searches, during which about 100 units of computer equipment were seized.

At the end of 2016, the SSU reported the "liquidation" of Ukraine’s largest bookmaker, Favorit. The report claimed that the company’s activities provided funding for terrorist activities in eastern Ukraine, which is a crime under Article 258-5 of the Criminal Code of Ukraine - financing terrorism. During investigative actions at 28 addresses in office premises, as well as at the place of residence of persons involved in the company’s activities, law enforcement officers seized almost a thousand units of computer equipment, documentation, gaming devices and more than seven million hryvnia in cash.

In January 2020, another search was reported at Favorit Sport. According to the Kyiv prosecutor’s office, after inspecting the websites favbet.com and favorit.com.ua, it was established that the latter provided illegal access to gambling.

“During the pre-trial investigation, it was established that a group of individuals, in order to obtain excess profits, under the guise of issuing and selling the “Favorit Sport” lotteries and creating a corresponding website on the Internet, were actually conducting illegal bookmaking activities, which fall under the provisions of the Ukrainian law “On the prohibition of gambling business in Ukraine,” the report said.

As Ukrainska Pravda wrote, the company itself subsequently refuted these statements, accusing Russian companies, which were allegedly not satisfied with the provisions of the draft law “On state regulation of activities related to the organization and conduct of gambling” that was adopted at that time in the first reading, of an information attack (an interesting caveat, worth remembering – author’s note).

However, despite the high-profile searches and statements by law enforcement agencies, this gambling empire continues to exist and is actively developing. No criminal cases have been opened against its owner, Andriy Matyukha.

Invasion of Russian "Cypriots"

At the end of May (or more precisely, on the 23rd ) of this year, a harsh information attack began on Matyukha’s FavBet. Its primary source was the online publication delo.ua. In the article "Nothing personal, just business: Ukrainian bookmaker Favbet does not pay taxes and works with Russians?" journalists reasonably accused this bookmaker of working without an appropriate license and evading taxes on a huge amount. However, in Ukrainian realities, such accusations are unlikely to surprise anyone, so the authors, through an "investigative experiment", dug up extremely "killer" incriminating evidence: despite the bloody invasion of Russian troops, FavBet allegedly continues to accept bets from Russians and (theoretically) pay them winnings. That is, the publication leads to the conclusion that Matyukha’s office cooperates with the occupiers and murderers.

The investigation of the delo.ua portal was very quickly "cleaned up". Not only from the publication’s website, but also from Google’s "cache". However, someone made sure that it was taken away both in full and with some cuts by websites from various echelons. The specifics of the "spread" of the material removed from delo.ua indicate that, most likely, this was not a private initiative of individual publishers, but a targeted campaign organized by some interested parties.

About a month and a half before the start of this information war, a significant and partly unexpected (because a number of interested parties did not expect this to happen) event occurred in Ukrainian betting. On March 30, KRAIL issued a bookmaking license to LLC Your Betting Company.  According to registration data , this small company is registered to "pound" Serhiy Tsybin. It intends to operate under the 1xBet brand, well known to regulars of "pirate" online cinemas.

As stated in the investigation of the InformNapalm community, the legalization of 1xBet in Ukraine was personally lobbied by the above-mentioned head of the advisory and expert council of KRAIL, Boris Baum. And it seems that his old comrade from the Luzhniki organized crime group, Mikhail Spektor, was lobbying Baum for this bookmaker. One of the decisive factors that influenced the commission’s decision to issue a license was allegedly the promise of "Your Betting Company" to purchase military bonds of the internal government loan from the state for half a billion hryvnia.

As mentioned above, Andriy Matyukha’s FavBet has been blaming Russian competitors for years due to "raids" from regulatory authorities. It’s not hard to guess who he’s hinting at: 1xBet is almost the only conditionally Russian office stubbornly trying to legalize and gain a foothold in Ukraine. The latter is unachievable unless you move the mastodon that has long ago grabbed the lion’s share of the Ukrainian betting market. That is, Matyukha’s bookmaker network.

The counterattack on 1xBet was not long in coming. They were given a mirror response: they were beaten for being Russian and working in an aggressor country.

The bookmaker 1xBet appeared in 2007 in the Russian city of Bryansk. It was created by local residents Roman Semiokhin, Sergey Karshkov and Dmitry Kazorin. Quite quickly it grew to the scale of Eastern Europe, beginning expansion to the West, Africa and Latin America. In 2014, mandatory licensing of bookmaking activities was introduced in the Russian Federation. 1xBet either could not or did not want to obtain a license, but continued to pump money out of the backwoods slaves of gambling. However, Roman Semiokhin simultaneously launched the 1xStavka project, which is still operating in Russia, as it were, quite legally. But the founding fathers of the office wisely retired to Cyprus, where they acquired local citizenship.

Roman Semiokhin

And they acted very prudently. In 2019, a criminal case was opened against them in the aggressor country on suspicion of illegal bookmaking activities, money laundering and tax evasion, and the following year they were put on the wanted list. All their assets in the territory of the Russian Federation were seized and are being slowly "fragmented". The 1xBet websites directly behind the curb have been blocked for a long time and tightly, but the office continues to collect bets through "mirrors" with varying success.

Semiokhin and Co.’s problems in Russia began after 2014, and not at all because of their civic position regarding the war unleashed by their homeland against Ukraine. (Although, to be fair, it should be noted that after 24.02.2022, 1xBet has been donating large sums to Ukrainians who suffered from the war, which makes Semiokhin’s former compatriots "burn their asses" ). The issue here is rather the redistribution of the gambling market of the aggressor country, for which the nouveau riche from Bryansk, who do not have a serious "roof", were simply not ready.

This redistribution has been going on for quite a long time, reaching its peak last year. As the business publication The Bell wrote, at the end of January 2021, the largest online casinos in Russia (which are well-known even to those who have never played and do not intend to play) temporarily stopped collecting bets via bank cards. Smaller gambling establishments completely closed down their operations. Only VIP clients (with an average deposit of $100,000) could afford to spin the virtual roulette wheel, who were collected "offline" individually, while the rest of the slaves of gambling had to exchange rubles for bitcoins somewhere. Why? Because the Russian Central Bank began to methodically cut off billing for the "gambling" in the vast expanses of the borderland.

The fact is that the “bunker grandfather” back in December 2020 “signed” a law according to which, roughly speaking, all gambling and betting that the crooked hand of the Russian state can reach must be completely “ticketed” by the sycophants of the Kremlin dwarf.

The 1xBet brand, despite serious claims from the authorities to its creators, continues to operate in the aggressor country. Moreover, it sponsors mass events that not only justify, but promote Russia’s war of conquest against Ukraine.

And here’s another thing. In Russia, in addition to the underground 1xBet of Semiokhin and Co., 1xBet is a legal one that collects bets. This brand is used by the above-mentioned 1xStavka office, registered to LLC Bukmeker Pub. Semiokhin owned 87.9% of Bukmeker Pub until 2016, when his share was bought out for €1.4 million by the Cypriot offshore Ehrlich Ltd. Ehrlich Ltd is registered to "Pound", a lawyer from Cyprus. A month ago, after the State Duma of the aggressor country came up with the idea of prohibiting residents of "unfriendly countries" from engaging in gambling business in Russia, the offshore share in Bukmeker Pub was rewritten to the Saratov JSC Konstruktor, whose sole shareholder is obviously a front man. But who is the real beneficiary of 1xstavka, one can only guess.

In the information counterattack against 1xBet, launched after it "ran into" Matyukha, there is a link to a study by volunteers of the BraveUkraine group. They analyzed and compared the software used by the 1xBet office, which is trying to enter Ukraine, with the software used by the Russian 1xStavka. The publications that are being dispersed across the Internet claim that during the study, the volunteers came to the conclusion: "1xStavka, which still operates in Russia, and 1xBet are, in fact, the same company."

But if you open the BraveUkraine report , you won’t find such a statement there. In fact, in their conclusion, the volunteers wrote : “The sites, web services, and mobile applications have a lot in common, which indicates that the development was carried out by the same company.”

Agree that “it’s the same company” and “the sites and applications were developed by the same company” are slightly different statements in terms of their semantic load.

However, neither the author of the article you are reading now, nor the project administration that published it, can argue with the opinion that 1xBet is too toxic to operate in Ukraine. This is beyond doubt.

Cruel "retaliation" and shameless PR

The information attack on FavBet, which is most likely 1xBet, was preceded by one important event. On April 27, four weeks after the issuance of a license to "Your Betting Company", operating under the brand of Russian Cypriots, the Bureau of Economic Security, under the supervision of the Podolsk Prosecutor’s Office of Kyiv, opened criminal proceedings No. 42022102070000148. The case is being investigated under Part 3 of Article 190 of the Criminal Code (fraud on a large scale) and Part 3 of Article 110-2 of the Criminal Code (financing actions aimed at the violent change of the borders of Ukraine, etc. by prior agreement by a group of persons). I note that both charges are quite serious and provide for imprisonment for up to eight years.

The author was unable to find the plot of the case, but from the documents that have already entered the court registry, it is quite obvious who the security forces are digging under. In particular, from one of the court rulings it is known that the investigators are extremely interested in "... information and documents on obtaining a license for LLC Your Betting Company to carry out activities for organizing and conducting bookmaking activities, and which are related to the owners of the gambling organizer brand 1xBet , as well as funds from the said illegal activities without supporting documents on their origin and other documents."

It is very pleasing that law enforcement agencies are concerned about whether one of the largest bookmakers in Eastern Europe is financing mass murders of Ukrainian citizens. Another question is why the Bureau of Economic Security together with the prosecutor’s office became concerned about this only after 1xBet officially entered Ukraine, threatening the profits of local gambling business tycoons? After all, this company declared its desire to legalize itself in our country through "Your Betting Company" before 24.02.2022, and the aggressor country unleashed a war against Ukraine eight years ago. The conclusion suggests itself.

According to data from the court registry, the first search in case No. 42022102070000148 was conducted on May 23. And on the same day, the first portion of dirt was thrown into Andriy Matyukha’s FavBet with accusations of collaborating with the occupiers. No, this is unlikely to be a coincidence. Not at all.

It should be noted separately that Matyukha’s team managed to quickly extinguish this "injection" of negativity. As mentioned above, the original source was cleaned up, as were reprints in top-tier online publications. The information space was massively filled with positive information about FavBet. Ukrainian media write about this bookmaker as about President Zelenskyy after the start of a large-scale invasion of rashists - good or very good.

Here’s what the top news results in Google looked like at the time of writing:

It’s hard not to dwell on one nuance. A very nasty one.

For the last month and a half or two, the Internet has been filled with image publications about how FavBet generously helps the army. Sometimes it even seems that this bookmaker has armed to the teeth at least a battalion of the Troops of the Armed Forces of Ukraine, although in fact the company bought only one rifle for $18 thousand – it simply promoted its contribution.

Or just recently the press service of FavBet trumpeted through all possible channels that it helped the army with as much as 30 million UAH. Although, if you read the release carefully, in fact it was 25 million UAH.

If we are to believe Matyukha’s competitors , then before the large-scale invasion, the monthly turnover of domestic betting reached $1 billion, of which, according to expert estimates , at least 25% (that is, about $250 million per month) - through Matyukha’s bookmaker network. If we assume that Andriy Matyukha receives no more than 10% of the income from all funds that passed through his network, then we get the following. It is very likely that during the eight months of the massive invasion, the FavBet beneficiary spent no more than 4% of the amount that settles in his accounts in one month on helping the defenders and victims of the war.

Let’s move on.

After the information attack on FavBet (which was obviously a reaction to the criminal case and searches) was repelled, the 1xBet office began to be “squeezed” with particular cruelty.

Starting from the second half of June, a series of journalistic investigations have appeared, the authors of which prove that 1xBet are Russians financing Russian occupier-murderers, therefore the license of “Your Betting Company”, the Ukrainian branch of the company, must be revoked.

The Gambling and Lotteries Regulation Commission refused to do this because it does not see any documented connection between 1xBet and the aggressor country. But to be on the safe side, it dispersed its advisory and expert council, through which Boris Baum allegedly lobbied for a license for 1xBet.

But the public has already begun to be furiously indignant. The Myrotvorets website has added everyone involved in 1xBet to its “black list” . The director of the Bureau of Economic Security, Vadym Melnyk, assured on the air of the “Edyni Novyny” telethon that the case is under control, the culprits will be found, and the license, if anything, will be taken away.

But the outraged public did not want to wait for the slow investigation to end and took matters into their own hands.

On July 8, a certain Vasyl Lebedyev registered a petition on the official Internet representative of the President of Ukraine calling for the ill-fated license to be revoked. The petition was promoted in the media, so it is not surprising that in just a week it collected the 25 thousand votes necessary for consideration by the head of state. At the same time, public activists and opinion leaders launched a flash mob with appeals to the National Security and Defence Council to impose sanctions on 1xBet (this initiative was also promoted in the media).

Meanwhile, Volodymyr Aleksandroych was considering the petition. And on August 8, he responded to it. The answer boils down to the fact that the Prime Minister of Ukraine Denys Shmyhal "was asked to ensure, with the involvement of law enforcement agencies, the study of the issues raised in the electronic petition and the adoption of response measures."

The media also stimulated extensive coverage of this epochal decision by the commander-in-chief. Therefore, at the time when the author wrote this paragraph, the news output in Google for the query “1xBet” looked like this:

In all this information flow accompanying the scandal, seemingly insignificant elements are of interest.

For example, on August 3, People’s Deputy from the Servant of the People party, Oleh Marusyak, stated the following in a comment to the UNN agency:

"At the very end, this 1xBet appears. When everyone started shouting, like, what is this, why did it appear here – I didn’t get a direct answer about this, because I didn’t personally communicate with 1xBet. At first, they weren’t interested in contacting Ukraine, because they used to live well in the Russian Federation. And now they’ve appeared here and allegedly closed their activities in Russia. I emphasize – allegedly, because it’s very easy to check whether they’re still working there."

Oleh Marusyak

What is said is as important as who said it.

Between the lines of this comment, one can read indignation and resentment. Indeed, the issuance of a license for 1xBet seems sudden and unexpected. As the online publication Business Censor wrote, “Your betting company” submitted an application to KRAIL to conduct bookmaking activities under the 1xBet brand on March 22, sent the accompanying documents on the 29th, and on March 30 the commission issued it a license. But it was hardly a secret for those involved in the gambling business and its legalization that 1xBet intended to get into Ukraine. It seems that it was a surprise to them that KRAIL allowed it.

The author of the comment, Oleh Marusyak , also known as the coordinator of the " Pavlyuk group" within the parliamentary faction "Servant of the People", is perhaps the most involved character in the process of legalizing "gambling". If the head of the faction of the party in power Davyd Arakhamiya was considered the "overseer" in parliament for the legalization of the gambling business, Boris Baum was called the main lobbyist from the "gambling mafia", then Marusyak, the head of the subcommittee of the Verkhovna Rada on the organization and taxation of the gambling business, was de jure the author of the law, according to which betting is now legalized and lives in Ukraine together with gambling. And it was through him that all the "wants" of the largest market tycoons who had staked out a place for themselves in our country were settled and agreed upon. Including the wish not to let "left passengers" in here.

But the "left passenger" 1xBet found an approach to the pockets of decision makers bypassing, so to speak, the "central cashier". Which could not but cause indignation of the main "cashiers" and already ticketed players, who were assured that no one would covet their piece of the pie.

Therefore, the story with 1xBet is not primarily about cooperation with occupiers and murderers. It is about greed and corruption. It is a dirty showdown between mafia clans and their corrupt "roofs", into which journalists, activists, law enforcement agencies and the supreme commander-in-chief were drawn.

Ivan Pomidorov, CRiME project observer, especially for [high-profile cases]