It seems that the relevant state authorities have finally paid attention to the illegal activities of lotteries, which we at the Ukrainian Gambling Council have been constantly talking about. Thus, there is at least a hope that lotteries will be brought to justice for tax evasion and imitation of gambling without appropriate licenses. However, for this hope to be realized, several more important steps need to be taken, one of which should be the creation of a temporary investigative commission of the Verkhovna Rada on taxes and lottery licenses.
Recently, it was reported that detectives of the Bureau of Economic Security of Ukraine (BES) exposed officials of well-known state lottery operators who, using their official status, additionally conducted online gambling without appropriate licenses.
The investigation revealed that operators of a number of lotteries organized gambling and betting activities on their online platforms through companies they controlled. Of course, they did not have any gambling licenses to conduct these activities. Accordingly, they did not pay any taxes or license fees.
In addition, the BES also has evidence that the lottery operators in their illegal online casinos used miscoding and P2P (peer-to-peer) transfers to fund their gaming accounts. In the case of misdirection, the funds were credited to the account of a company related to the lottery operators with the wrong purpose of payment. In the case of P2P transfers, funds were transferred between the accounts of individuals instead of being transferred to the company's account. In both cases, the payments did not belong to the code 9406 "state lotteries", which lotteries are required to use by law.
Lottery operators resort to these frauds to conceal the amount of illegal funds they receive from simulated gambling and avoid paying any taxes. After all, the funds that go to their official accounts should be subject to income taxes.
Lottery players have been engaged in this activity almost all their lives, but they became most active during the full-scale war, as we have repeatedly emphasized in our blogs. The fact that this problem has finally been paid attention to and publicly stated that these illegal immigrants face appropriate fines and sanctions gives hope that it will be resolved. However, in order to make this pressure on lottery operators systematic, a temporary investigative commission of the Verkhovna Rada on taxes and lottery licenses should be established.
When it came to legal gambling and potential violations in this area, the relevant commission was created very quickly. We hope that the Tax Committee of the Verkhovna Rada, which for some reason stubbornly ignored the problem with lottery operators, will be forced to show the same enthusiasm in creating a similar commission to study in detail the violations of lottery operators. This, in particular, will finally provide a political basis for adopting licensing and tax conditions for lotteries, as well as starting the process of their equalization with gambling, as is done in most developed Western gambling markets.
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