Ukrainian authorities have launched a crackdown on Russian influence in the local gambling business. They intend to take inspiration from the United States, where in the 1980s the authorities pushed the Italian mafia out of Las Vegas casinos.
After a ten-year ban, gambling was re-legalized in Ukraine shortly before the Russian invasion last February. Since then, however, the industry has been a profitable means for Russians to make money in the country and may also collect the personal data of Ukrainian players.
This happened due to insufficient regulation and the connection of supervisory authorities with Russian oligarchs and companies. Boris Baum, the director of the gambling regulatory body, was also allegedly under Russian influence. During his time at the head of the office, Russia is said to have further strengthened its influence in the sector even after the Russian invasion of Ukraine.
Baum was dismissed in July last year and subsequently fled the country to Cyprus, as media reports surfaced that he had helped companies with ties to Russia win licenses.
Ukraine’s gambling regulatory body began under new management to revoke suspect licenses last September, and in the spring of this year, President Volodymyr Zelenskyy imposed sanctions on more than 400 individuals and legal entities linked to Russian gambling enterprises, including five Ukrainian gambling companies, writes The Guardian.
Authorities are also targeting banks and other financial institutions suspected of facilitating money laundering for the benefit of Russian oligarchs.
But Russia’s presence in the industry remains a threat that authorities say they are determined to address, despite concerns that Russian influence is reaching high places.
Inspiration in America
A member of Ukraine’s Commission for the Regulation of Gambling and Lotteries, Olena Vodolazhkova, told The Guardian that the regulator had received an invitation to Nevada from the US Gambling Control Council to jointly discuss reforming the Ukrainian system and rooting out Russian influence.
“US regulators are very important to us. They have experience with the mafia and other influences, and their advice can be very valuable for us,” said Vodolažková.
Ukraine is counting on being inspired by the “best practices” of US regulatory and law enforcement agencies that worked together to drive the mob out of Las Vegas, she added.
It was the Italian mafia that played a key role in the development of casinos and hotels in Las Vegas, but the turning point came in the 1970s, when the FBI and the inspectors began an investigation into the involvement of organized crime in the gambling business.
The Mafia also suffered when the state of Nevada passed a gambling law that made it easier for other companies to operate casinos.
Vodolazkova specified that the main task of the Ukrainian authorities is to reduce money laundering by reforming the systems for analyzing the value of the currency.
“If they (note the Russians) have any influence, whether it’s in our gambling industry or any other industry, of course that will help them beat us,” she said.
“I think now it’s a challenge for every civil servant and every Ukrainian citizen to fight against Russian influence, because every opportunity to make money or gain influence here strengthens them,” Vodolazhkova concluded.