The problem of gambling addiction in the army and not only is already being solved at the national level. However, how did a state with numerous regulators allow the situation with gambling addiction to worsen and what is the responsibility of the National Bank of Ukraine (NBU).
President of Ukraine Vladimir Zelensky enacted the decision of the National Security and Defense Council “On countering the negative consequences of gambling on the Internet,” which, in particular, provides for a ban on gambling for the military. The catalyst for the heated discussion that preceded this decision was the petition of Pavel Petrichenko, a soldier of the 59th separate motorized infantry brigade. In it, he noted: “There are often cases when game-addicted military personnel spend all their money on games and take out microloans, thereby leading themselves and their families into a “debt hole,” or they sell drones and thermal imagers to pawnshops, thereby harming not only themselves , but also to our brothers." Unfortunately, Pavel died during a combat mission in April 2024.
Now the National Security and Defense Council is trying to solve problems that the National Bank of Ukraine essentially slept through. So the National Bank is recommended:
1) introduce within two weeks a ban on accepting dual-use goods as collateral;
2) approve within two months methodological recommendations for:
payment card issuing banks to comply with the requirements of the Law of Ukraine “On Preventing and Combating the Legalization (Laundering) of Proceeds from Crime, the Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction” in terms of P2P transfers;
banks to block citizens' payments with credit funds to the accounts of gambling organizers for participation in gambling on the Internet.
Where did the National Bank fail?
The most glaring situation is the ban on accepting dual-use goods as collateral - this is a clear reference to items that can be used by the military (for example, quadcopters). Thus, it can be assumed that, having lost their monetary security, gambling-addicted soldiers can use expensive equipment to obtain a loan for a new game. In this case, it turns out that the Ukrainians will donate to volunteers for equipment, which, instead of the front, ends up in the pawnshop’s warehouse.
It is worth adding here that last year alone, pawnshops provided 5,693,924 loans. The value of the property pledged, according to official data alone, exceeded UAH 13 billion. Of course, not all goods accepted into pawn shops have anything to do with the army. However, sometimes even such cases are investigated and made public: according to the investigation, the commander of one of the reconnaissance platoons stole four sets of portable special-purpose radios and two quadcopters with a total value of 500 thousand UAH and sold all this property to pawn shops in the Dnepropetrovsk region.
And although it is unknown whether gambling addiction was the cause of the mentioned crime, this case indicates that at least some pawnshops are not averse to profiting from the war.
This is the third year of a full-scale war and the second year of Andrei Pyshny’s tenure as head of the NBU, but during this time no one in the National Bank initiated a ban on accepting thermal imagers or drones as collateral.
This is despite the fact that in recent years the NBU has been actively strengthening its control over the market. Thus, in June last year, the NBU, in internal letter No. 25-0005/38228, ordered Ukrainian banks to report on Mondays on all card payments of the population, regardless of their amount.
According to this document, financiers transmit data to the NBU on three types of card transactions: P2P transfers (when individuals transfer money to each other), replenishment of credit, current, deposit accounts from accounts (via applications/websites) and vice versa, and payments on the Internet. Regarding online payments, the NBU requested detailed information with the numbers of card accounts from which payments will be made, as well as information about the recipients - EDRPOU of the online platform/shop, the number of payments, all amounts. Moreover, in the context of all cards - issued by both Ukrainian and foreign banks. Ukrainian banks that serve online merchants have information about everyone.
That is, banking supervision is ready to check every Ukrainian who donates to a volunteer, but could not find a way to find out who and how took out almost 6 million microloans from pawnshops.
Debt pits for the military
Another problem - falling into a debt trap - is more complex. Every few years, the National Bank initiates changes to legislation that are designed to bring order to consumer lending and “qualitatively reduce the debt burden per borrower.” In December, the regulator lobbied for a law that would limit microloan rates. Since April 24 of this year, another limit has become relevant: 1.5% per day - this is still more than 500% per annum. But this limitation applies to financial institutions that provide microloans - in general, a gradual reduction in the maximum rate is expected at the level of 1% per day of the total loan size. This will not affect pawnshops. According to the NBU, the weighted average annual interest rate of pawnshops on loans for 2023 amounted to 276.9%.
However, for some reason, it is still possible to lose a soldier’s entire salary in one day, and then the next one, by taking out an online loan. Does the National Bank analyze the movement of funds in the accounts of military personnel, does it see this problem? And it concerns not only the defenders of Ukraine, but also all citizens. It’s no secret that people who play in online casinos most often take out microloans at night. Overnight loans have become almost a separate product, which is sold accordingly. The availability of loans and the dominance of online casinos ultimately become the reason why sometimes donations from volunteers appear in pawn shops.
But the focus of the National Bank’s attention shifted to Power Banking raglans, presentations of new coins and banknotes. Unfortunately, the face value of this money is too small to redeem the drones from collateral.
