Parimatch discontinues its activities in Ukraine
Ukrainian President Volodymyr Zelenski has approved an NSDC decree on sanctions against bookmakers linked to Russia. The restrictions apply to 287 legal entities and 120 individuals involved in the Russian gambling business.
Parimatch was the largest provider to be sanctioned, which (as well as others) has been banned from operating in Ukraine for 50 years.
The official reason for this sanctions package is Russian origin or cooperation with an aggressor country.
First Deputy Prime Minister Yuliya Sviridenko said: ‘Our special services have carried out significant work to verify individuals associated with the aggressor state. We are blocking another source of tax revenues for the Russian budget”.
Prior to this, Parimatch published an official appeal to the president of Ukraine, which, as we can see, had no effect.
As a result of these sanctions, Parimatch’s accounts have been blocked for around $6.7 million in customer funds and withdrawals are also unavailable.
Currently, the bookmaker’s operations in Ukraine are entirely suspended and its website is blocked.
Also, more than 2,000 employees have been sanctioned along with the company, and their future is unknown – the company has not yet announced any downsizing or firing.
Unofficial reasons to block Parimatch
Apart from the official version, there are several others. Parimatch also does not believe there is a Russian connection. A source from the company’s management confirms that there was a risk of being sanctioned at a particular stage because of the religious preferences of the company’s second-largest shareholder Sergey Portnov, but there have been no signals now. There is no mention of this in the NSDC decision.
What Parimatch says about the blockage?
The company said it was looking for a legal refund mechanism:
“Customers can be assured that all personal funds are safe, frozen and will be transferred in full”
“We will await additional analysis and review of the situation surrounding the SNBO’s sanctions against Parimatch LLC and look forward to an upcoming review of the decision.”
Parimatch LLC is also in search of a legal mechanism to settle financial debts for all services provided, it said.
Does Parimatch really have the license?
Another version, voiced by several market participants, is that Parimatch did not fall under sanctions without the help of 1XBet. At the end of March 2022, the KRAIL (Ukrainian Commission for Regulation of Gambling and Lotteries) issued it a licence (through Your Betting Company). But a large-scale media campaign against the operation of the operator with Russian roots forced even Zelensky to intervene, and on 7 September KRAIL revoked the license.
“Parimatch launched a whole campaign in the summer to keep X (that’s the name of 1XBet. – Ed.) out of Ukraine, now X has spared no resources to motivate the SBU to create problems for Parimatch,” says a GUR source, who spoke on condition of anonymity. He adds that Zelensky was easily sold the idea of these sanctions, telling him that Ukrainian servicemen lose billions of hryvnias a month in total and a significant portion of that money goes to Russia.
Parimatch denies any corporate conflicts with other market players. “We said – please come in, teach us, because competition is development,” says Gilevich.
Would Parimatch still be in business?
According to gambling analysts, the sanctions against Parimatch involve completely blocking business operations, assets, accounts, domain names, license revocation, etc.
In fact, it is a complete termination of all activities. Given that there is information about sanctions against other companies in the group, including international ones, the effect could be much greater.
Parimatch still operates in India, Kazakhstan and some other countries.
The company continues to sell its software in the following countries the meantime:
Cyprus, United Kingdom, Kazakhstan, Tajikistan, Nigeria, Nana, Kenya and Tanzania.
In 2023, the company was planning a software expansion into Mexico, Canada and Latin America, which is currently in question. While the company continues to negotiate and clarify with partners about the current lock-in.
We continue to follow the destiny of Parimatch very closely and will keep you posted with updates on this situation regarding the blocking of the company.