Parimatch Ukraine shuts down as Zelensky begins betting crackdown

Parimatch Ukraine shuts down as Zelensky begins betting crackdown

Ukrainian President Volodymyr Zelensky has signed an executive decree ordering various betting businesses active in Ukraine to cease operations in the country.

The decree was signed on Friday 10 March and implemented the decision of the National Security and Defense Council of Ukraine (NSDC), introducing ‘personal special economic and other restrictive measures (sanctions)’.

According to Ukrainian media, 287 betting companies and 120 individuals have been targeted by the sanctions. The government has accused these firms of having Russian links and therefore acting against Ukraine’s interests.

Notable betting operators included in the sanctions include BetCity, Matchbet and most significantly Parimatch Ukraine, the most prominent Ukraine-founded business which is active in a range of countries.

Parimatch’s Ukraine business, Parimatch LLC, has confirmed via a Facebook post yesterday that it has immediately complied with the presidential order.

The statement outlines that Parimatch Ukraine’s operational activity has been suspended and as such its platform, including the pm.ua website, has been blocked.

Looking ahead, the firm has detailed three steps to its customers, beginning with refunds of money from active accounts, followed by suspension of all partnership contracts and completion of labour relations with its staff. 

“We are looking for a legal refund mechanism,” the firm explained. “Customers can rest assured that all personal funds are currently safe, frozen and will be transferred in full.”

Parimatch added that it is also seeking a legal mechanism for repayment of financial debts from any services provided as part of its partnership contracts, but added that due to suspending its operational processes it will not be able to fulfil obligations to staff members.

The operator signed off its statement asserting that as of business suspension Parimatch LLC had paid UAH 485m in taxes and licence payments for 2023.

“We will expect additional analysis and consideration of the situation surrounding the NSDC sanctions against Parimatch LLC and hope for a future review of the decision,” the statement concluded.

Other stakeholders associated with the firm have also confirmed the end of commercial relationships with it, such as Ukrainian Premier League club FC Shakhtar Donetsk.

The club’s statement read: “In connection with the publication of Decree of the President of Ukraine No. 145/2023 “On the Decision of the National Security and Defence Council of Ukraine of March 10, 2023 “On the Application and Amendments to Personal Special Economic and Other Restrictive Measures (Sanctions)”, FC Shakhtar announces the termination of cooperation with the title partner of the club, Parimatch.”

However, despite closing down its Ukrainian website on Saturday in compliance with the government’s orders, Parimatch has appealed to President Zelensky to reassess the NSDC’s decision.

Given Parimatch’s activity in the year since Russia’s invasion of Ukraine, the lumping in of the firm with others suspected of pro-Russian activity does seem bizarre.

Founded in Kyiv in 1994 but now located in Cyprus, Parimatch has been very vocal about its Ukrainian roots, still maintaining a strong presence in the country both in terms of its online business and a sizable staff presence.

Immediately after Vladimir Putin’s widely condemned invasion of his western neighbour in February last year, Parimatch was one of the first international firms to close down its Russian franchise.

This was followed by a commitment of UAH 30m (€2.9m) to support Ukraine’s armed forces, providing ammunition, food and medicines, followed by UAH 180m (€4.7m) in June towards humanitarian relief and charitable efforts.

“As a company with Ukrainian roots, we have supported our country since the first day of the full-scale invasion,” Deputy CEO Evgen Belousov explained to SBC News in August 2022.

“The number of income requests from our customers, employees, and country defenders motivated us to create an internal help centre to process them. Our employees took part as volunteers, and some went to defend the country in the ranks of the Ukrainian Army.”

These efforts were emphasised by the firm in a statement on its now-deleted Ukrainian webpage and on the Parimatch Ukraine Linkedin page, in which it appealed to President Zeleksnky as ‘the guarantor of compliance with the constitution of Ukraine’ regarding the NDSC decision.

“We inform you that throughout the entire period of the Russian military invasion of Ukraine, we have never received requests from the SBU to clarify the suspension of the franchise in Russia,” Parimatch stated.

“We ask you to check the information that was falsified during the decision of the National Security and Defense Council and take appropriate actions regarding all unlawful violations by the Security Service of Ukraine.

“We are ready for public discussion, ready to answer all questions from the media and law enforcement agencies, and are ready to defend our position in court.”

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