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Deyan Dimitrov February 9, 2024 3 min read
Ukraine’s Cosmolot Faces Allegations of Tax Evasion and Unlicensed Gambling
Company employees allegedly organized unlicensed online gambling rings, running unregistered websites mirroring that of the licensed operator
In a significant development, Ukraine’s Bureau of Economic Security (BES) recently seized UAH 700 million ($18.6 million) from the accounts of one of the country’s largest gambling operators, Cosmolot. The move comes as the casino faces accusations of evading UAH 1.2 billion ($31.9 million) in taxes. Cosmolot has denied all allegations and is ready to defend its rights in court.
The Operator Reportedly Ran Several Parallel Schemes
Law enforcement agencies revealed that a substantial number of Cosmolot’s employees were allegedly involved in organizing unlicensed online gambling events. The investigation uncovered more than 30 mirror websites designed with interfaces similar to the licensed site. The suspects also employed “miscoding” of payments, creating an intricate tax evasion scheme.
Notably, the gambling licensee’s physical location did not match the address specified in the official license. Furthermore, there were deliberate attempts to conceal evidence crucial for a thorough investigation into the alleged tax evasion. If true, these allegations could have significant consequences for the operator, extending beyond the monetary loss.
This development closely follows the Ukrainian authorities’ intensifying efforts to root out illegal gambling in the country, ensuring bad actors do not prey on vulnerable citizens during the ongoing crisis. Last year, KRAIL, the Regulation of Gambling and Lotteries, identified over 1,900 unlicensed operators targeting Ukranians, successfully restricting most of them.
Cosmolot Urged for Dialogue with Authorities
As the pre-trial investigation against Cosmolot unfolds, authorities have seized UAH 700 million from the operator’s accounts. The company, however, vehemently denies the allegations, stating that it considers them baseless. Commenting for Forbes, Cosmolot revealed its intention to appeal these decisions in a pre-trial procedure and expressed readiness to defend its rights in court.
Cosmolot asserted that its employees are solely involved in maintaining and operating the official cosmolot.ua website under a valid license. According to the company, certain websites mentioned by BES have no association with the company. Despite similarities in name and style, these sites allegedly illegally used the Cosmolot trademark to attract players to unlicensed platforms.
Cosmolot regularly contacts hosting providers to ban offending sites. A list of such sites and relevant explanations were provided to the BES but were ignored.Cosmolot statement
Cosmolot declared its commitment to transparency, stating that all available documents have been provided and are ready to be submitted to law enforcement and regulatory authorities. The unfolding legal battle between Cosmolot and Ukrainian authorities underscores the challenges and complexities in the evolving landscape of the country’s gambling industry.