The gambling market in Ukraine continues to be a very specific area of activity, which is recognized even by the Gambling and Lotteries Regulatory Commission. But if the attention of society and authorities is mainly focused on online casinos, then the situation with lotteries is different. But at the same time, the symptoms of the growing “danger” of the lottery business, even for online casinos, are steadily growing.
Thus, in the fall of 2023, the Ukrainian gambling business in the field of online casinos jointly stopped the process of adopting bill No. 10001. The document proposed to “allow” lottery operators to enter the gambling market. At the same time, they could pay 3-4 times less for a license than a casino, and taxes for them would be 10 times less.
Previously, we wrote in detail about the main beneficiaries of the bill in the person of the Molodsportloto company and its “partner”, People’s Deputy of Ukraine Daniil Getmantsev. However, other participants in the lottery market are not far behind him, the same “national” brand “Ukrainian National Lotto” (UNL). The name of the lottery operator already shows deceit, since the company is de facto owned by a foreign citizen.
The UNL lottery is not a state, not a national, and not even quite a lottery
The Ukrainian National Lottery (UNL) is a Ukrainian operator of state lotteries that operates lotteries on the basis of a license under the supervision of the Ministry of Finance and the State Treasury. UNL administers all types of lottery games - draw lotteries, electronic instant lotteries, sports lotteries, quick draws, paper lotteries.
Already from this description of the lottery on the UNL website we can conclude that the company is at least disingenuous. Thus, UNL is a private enterprise, moreover, with 100% foreign investment and it can be called “state” only in the sense that the state has given a license to organize the lottery.
You cannot call it a national UNL, because legally the company is an “enterprise with 100% foreign investment “Ukrainian National Lottery”, created on July 24, 1997. The owner of the company is British businessman Michael Foggo - 10.1% of the shares belong to him directly, and the remaining 89.9% through the Chinese company HONG KONG RUI BO INVESTMENT LIMITED, registered in Macau, China. The businessman himself lives in Hong Kong.
And it’s difficult to call UNL a lottery in the full sense of the word, because the functionality of its website speaks more in favor of online casinos. So, in addition to the usual online purchase of lottery tickets, you can purchase instant lottery tickets on the site, which is essentially an analogue of gaming slots or slot machines in an online casino.
There are also so-called crash lotteries on the site. Their essence lies in a bet and a mini-game in which the player monitors the movement of the graph: the higher the graph, the greater the chance of winning. But since there are a lot of other players involved in the same game, you should be the first to click on the “cash out” button and collect your winnings. The principle of the game is more reminiscent of slot machines than a classic lottery, but for some reason it is not considered a game of chance.
Coach, raider, British businessman - who owns UNL
At the moment, UNL's ownership structure is more or less clear and transparent - English businessman Michael Foggo officially owns the lottery operator, but this was not always the case.
In 2015, a high-profile business conflict broke out around UNL - its owner Peter Shetty accused his confidant Valery Kovalenko of raiding the company. The latter, by changing owners, removed the foreigner from among the owners of the company. However, at the end of the same year, the court restored Shetty to his rights.
However, in 2016, as Business.Censor wrote then, the new owner of UNL was the Cypriot company Efamiando, and in the Ukrainian register the owner of UNL was listed as a certain Roman Zeno from Ternopil. In Ternopil itself, the latter was known only as a cycling coach at a local children's and youth sports school.
All these corporate conflicts were closely tied to the political reality of those years, and stability in UNL came only in February 2018, when the founder of the company was the same “HONG KONG RUI BO INVESTMENT LIMITED” Michael Fogg. The British businessman himself became the owner of 10.1% of the company’s shares in July 2021.
However, already in 2018, Michael Foggo was named on the UNL website as the rightful owner of the company, but more on that below.
Note that in addition to the Ukrainian National Lottery enterprise with 100% foreign investment, Michael Foggo owns two more companies associated with UNL - UNL Games and UNL Betting. Both companies, by the way, are de jure not associated with gambling - the main code of their economic activity is “computer programming”.
Companies are probably engaged in maintaining the operation of the UNL system on the Internet and, apparently, they do it for free. In any case, it was not possible to find publicly available data on their income.
The price of the issue is half a billion hryvnia, and this is only official
During its heyday, when online and offline casinos were banned and the operator’s competitors were under sanctions from the National Security and Defense Council, according to the YouControl analytical service, the company’s revenue exceeded UAH 780 million. In 2023, revenue amounted to UAH 516 million. Half a billion hryvnia allowed the lottery operator to enter the TOP 10 gambling market operators.
But we are talking about open data, although not all income can be legalized. So on the Internet you can find information that UNL instant lotteries are essentially slot machines, which means that the income received from them is illegal, because UNL does not have a license to organize gambling using slot machines.
In addition, UNL has permission for 11 types of lotteries, but a quick glance at the site is enough to understand that there are several dozen of them - “Comments” counted 59 varieties. And this is not counting other types of gambling, also called lotteries on the site.
But despite such incidents, law enforcement officers have no complaints against the operator, and if they do, they relate to “cases of bygone days.”
In December 2019, in the city of Zheltye Vody, Dnepropetrovsk region, the National Police raided a slot machine salon, from which more than 20 system units and monitors for them were seized. As follows from court documents, this equipment belonged to an enterprise with 100% foreign investment, the Ukrainian National Lottery, but the organizer of the business was a certain Horvarth LLC. The latter received from UNL the right to distribute the state instant cash lottery “Loto-Platinum”, and in fact organized a slot machine salon.
De jure, it turned out that the organizer of the illegal business was Horvart LLC. However, after the legalization of gambling in Ukraine in 2021, such cases were quickly forgotten. Although previously they had no prospects due to the high political “protection” of the UNL, attributed to it by the media.
Patrons of the UNL are people's deputies of the BPP, the head of the Presidential Administration Petro Poroshenko and not only
One of the first public statements to the media by the current owner of UNL, Michael Fogg, in 2018 was a refutation of journalists’ information about the political patronage of the company by Ukrainian people’s deputies from the Petro Poroshenko Bloc.
The businessman denied media statements that the shadow owners or patrons of UNL are people's deputies from the BPP Alexander Tretyakov and the head of the Presidential Administration in 2014-2016 Boris Lozhkin. However, too many facts spoke against this.
Thus, in 2015, the National Security and Defense Council of Ukraine introduced sanctions against almost all lottery operators in Ukraine for connections with the Russian Federation, except for UNL. As the same “Business.Censor” claimed, during the corporate conflict in UNL in December 2015, it was people’s deputy Alexander Tretyakov who was one of those who came to the company’s office during the visit of SBU officers there.
But perhaps more inconvenient was the fact that just a week after Michael Fogg’s denial of ties to Alexander Tretyakov, the lottery operator opened a central office in a building owned by one of the politician’s firms.
After the change of the entire power vertical in Ukraine, the former patrons of UNL, regardless of their last names, clearly lost the ability to cover the work of Michael Fogg’s company. But judging by the growth of the company’s income and the lack of questions about it, the company was not left without a “cover.”
The story of the lottery operator “Molodsportloto” speaks about how important it is in Ukrainian realities to be friends with officials. From 2015 to 2019, MSL was subjected to blows from the authorities, and only the change of this very government somewhat improved its affairs.
