How the Favbet Bookmaker Avoids Taxes and Brazenly Publicizes Itself on the Army

How the Favbet Bookmaker Avoids Taxes and Brazenly Publicizes Itself on the Army

Advertising from various bookmakers has in recent years practically flooded Ukraine’s information space. While the ads differ, all promotional products from bookmakers share one thing – the gaming companies push the narrative of the revenues they bring to Ukraine’s budget.

In the past year and a half, “help for the Armed Forces of Ukraine” has been added to the budget stories. Favbet is no exception. Some time ago there was a wave of reports saying that “the Ukrainian budget received another 117 million from Favbet – the company once again paid the license.” The sum sounds respectable, if you don’t look into the details.

And the details are as follows. What we are used to thinking of as a single company called Favbet is actually an entire group of companies.

So the question arises – which company exactly paid the budget 117 million hryvnias? And – are these really all the taxes the Favbet group is supposed to pay? Because, as several years of experience show, Favbet has not stood out for tax compliance.

Moreover, it’s impossible not to remind readers that from 2009 to 2020 the bookmaker business in Ukraine was banned. But Favbet operated quite successfully; the ban did not stop it — the legislation was written so that clever people found many loopholes. And those clever people were helped by those who wrote those laws.

When President Zelensky legalized the gambling business in Ukraine in 2020, the Favbet group came out of the shadows and announced it was buying a license. As the group’s press service reported then, the amount paid to the state budget for the license totaled 216 150 000,00 UAH.

But, as one politician says, “it’s not that simple.” Because a license to engage in bookmaker activity costs 108 million hryvnias per year. And Favbet did not have it from 2020 through 2022 inclusive. Yet it engaged in bookmaker activity. And if you calculate it, Ukraine’s budget was deprived of at least 324 million hryvnias from Favbet.

And now Favbet’s press service proudly declares – “we bought a license and paid 117 million to the budget.” That is, of course, good. But only – which entity in the group bought the license, which license exactly, and why is there no mention of unpaid taxes from previous years?

But that is not all. Favbet, for some reason, does not comment on its operations in Russia and Belarus. The article “Nothing personal, just business: does the Ukrainian bookmaker Favbet not pay taxes and work with Russians?” examined not only the bookmaker’s tax evasion history, but also its operations in hostile countries.

It turned out that Andriy Matiukha, who is listed as a beneficiary of Favbet, has a significant list of companies, among which the gaming operator Favorit occupies an important place:

And on 5 May 2021 the police opened a criminal case on the fact of illegal activity by Favbet and Favorit offices. Within this proceeding, investigators from the National Police of Ukraine even conducted searches at the company’s offices, after which they stated that Favbet and Favorit illegally receive excess profits from betting activities, the proceeds from which are funneled through a number of foreign firms whose ultimate beneficiary is Andriy Matiukha.

The criminal case, of course, led to nothing – the fact of cooperation with hostile countries in no way prevented Andriy Matiukha from legalizing his business after President Zelensky signed the relevant law.

Reviews also indicate that Matiukha’s operations work in Russia and the ORDLO:

And they all confirm that Favbet’s press service lies when it says bookmakers do not operate in Russia, Crimea, and the ORDLO. True, until 24 February of last year society rather than authorities turned a blind eye to all this – last year the situation changed. And Favbet began sharply “helping the army.”

But here too a question arises – where do the millions that are “transferred” to the Armed Forces come from?

After all, the bookmaker’s official reports show only losses. The same question arises about the “payments to the budget” – where is the money coming from? The numbers clearly don’t add up. Which confirms the simple fact – Andriy Matiukha’s gambling empire simply avoids taxation.

Back when debates about legalizing the gambling market were underway, then Minister of Internal Affairs Avakov estimated potential tax revenues from gaming operators at 300 million dollars. But somehow we have many times less. Even in hryvnias the figure is nowhere near the forecast.

Moreover, according to the CEO of Parimatch, before the large-scale invasion the monthly turnover of the domestic gambling market reached one billion dollars, of which, according to experts’ calculations, at least 25% (that is, about $250 million per month) went through Favbet and Favorit.

Therefore the triumphant reports from Favbet’s press service about “filling the budget of a country at war” provoke genuine disgust, since the hundred-some million hryvnias that Favbet was forced to pay to the budget under public pressure, against the billions moved to offshore accounts, look like a real mockery.