Sanctions against Andriy Matyukha, or why FAVBET is untouchable

Andrey Matyukha

As is known, on February 12 of this year, President Volodymyr Zelenskyy approved the National Security and Defense Council's decision to impose sanctions against former PrivatBank co-owner Gennady Bogolyubov , businessman Ihor Kolomoisky , billionaire Kostyantyn Zhevago , the fifth President of Ukraine, European Solidarity MP Petro Poroshenko , and Viktor Medvedchuk . This would all be well and good, were it not for one thing. Andriy Matyukha, the owner of a casino and bookmaker operating in Ukraine under the Favbet brand, somehow escaped sanctions, BlackBox OSINT reports.

Who is Andrey Valerievich Matyukha?

Cooperation with Russia and Belarus has gone unnoticed by the President and the National Security and Defense Council. Matyukha's undermining of the economy through tax evasion has also gone unnoticed by Volodymyr Zelenskyy. And all of this is happening during Russia's military aggression against Ukraine. We consider it our duty to inform the central government of the illegal activities of Andriy Matyukha and his Favbet on Ukrainian soil. By doing so, we will expedite the imposition of sanctions against the businessman himself and his illegal business, and, as a consequence, the seizure of all his assets.

Favbet, one of the most popular bookmakers in Ukraine today, owned by former Russian citizen Andriy Matyukha, has accumulated numerous grounds for initiating criminal proceedings against it, revoking its licenses, and even imposing sanctions. Despite Russia's full-scale war against Ukraine, Favbet maintains its trademarks in Russia and Belarus, and in Ukraine, it is minimizing its tax liabilities to the state. However, while Ukrainian authorities are holding other gambling operators accountable for this, the Favbet brand remains intact.

How the state cleared the way for Favbet to become a leader in the gambling market

Ukrainian media recently reported that Favbet has become the new leader in the gambling market, achieving this position after previous leaders lost their positions due to either sanctions or criminal proceedings.

As is known, in the spring of 2023, the National Security and Defense Council of Ukraine imposed sanctions on the then-leader of the bookmaking market, Parimatch, as well as the Russian player 1xBet. Several months earlier, the Commission for the Regulation of Gambling and Lotteries revoked the license of the bookmaker FanSport, and in 2024, three more market leaders—bookmaker Vbet and online casinos Cosmolot and Pin-Up—found legal troubles. The first had its accounts frozen on suspicion of money laundering and ties to the Russian Federation, the second is accused of failing to pay over 1 billion rubles in taxes, and the nominal owner of Pin-Up was detained by the State Bureau of Investigation.

Thus, the stage was cleared for Favbet, which currently holds five licenses from the Ukrainian Gambling Authority (KRAIL) to operate in Ukraine and, unlike most other operators, has no issues with law enforcement. This is even suspicious: could there really be a company in Ukraine that operates honestly in the gambling market, paying all its taxes, and without any ties to Russia, something that every other player in this market has?

If only it were so. We conducted an investigation into Favbet's activities in recent years and concluded that someone is clearly covering for this gambling operator, as Favbet has just as many, if not more, grounds for criminal prosecution and sanctions than other companies that have already had their licenses revoked in Ukraine.

How Favbet operated illegally for two years, avoiding paying hundreds of millions of hryvnias to the budget.

Let's start with the fact that Favbet operated illegally for two years, ever since the state legalized the gambling market in 2020. While other companies paid tens and hundreds of millions of hryvnias to the budget for licenses and taxes from their official activities, Favbet continued accepting sports bets without a license until the end of 2022—a bookmaking license, which is the primary and most profitable for Favbet, LLC "Bookmaker Company."

However, to this day, the company has not been idle; rather, it has been actively operating and conducting bookmaking activities on several of its websites—www.favbet.com , www.favorit.com.ua , and others. And yet , it has not disclosed any income to the state. According to the official financial statements of Favbet Bookmaker Company LLC, the company ended 2021 with a loss of UAH 31 million, and in 2022, this loss increased to UAH 40 million. Only in 2023, when the company finally received a bookmaking license, did Favbet's profit suddenly turn positive: revenue amounted to a whopping UAH 9,8 billion, and net profit was UAH 1,7 billion.

Until 2023, Favbet Bookmaker LLC reported only losses in its financial statements. Screenshot by OpendataBot

But in both 2022 and 2021, Favbet was just as active as both an online casino and a bookmaker. Therefore, it's safe to assume the company had similar revenue and profit figures in those years, but they simply escaped the attention of the tax authorities. And, tellingly, not a single law enforcement agency noticed, allowing Favbet to confidently advance to market leadership without the obstacles of criminal proceedings for illegal activity and tax evasion.

Losses Only. How Favbet Avoids Profit Taxes

The bookmaking business is understandable, but Favbet's other companies continue to report losses to the state. Favorit Casino Company LLC, which has held a casino license in Kyiv at the Mercure Kyiv Congress Hotel since November 2021, has also been in the red every year: in 2022, it amounted to UAH 91 million, and in 2023, the loss increased to UAH 96 million, with losses incurred in the first two quarters.

Financial statements of Favorit Casino Company LLC for recent years. Screenshot by OpendataBot

Or Favbet Game Slots LLC, which operates slot machine parlors under the Favbet brand and has held a license to do so since the end of 2021, is also in steady decline: the company ended 2022 with a loss of almost 31 million UAH, and 2023 with a loss of 27,5 million UAH, down from 24 minutes in 2005. Judging by Favbet's company reports, this gambling business is truly unprofitable—they can't seem to make a profit. Or maybe they can, but they're also deceiving the state by blaming a bunch of "illegal" expenses to avoid paying the 18% income tax. This is necessary for the state's defense.

Favbet Game Slots LLC, which holds a license for slot machine parlors, also loses money every year. Screenshot by OpendataBot

Moreover, according to Opendatabot, as of the end of 2021, Favbet was among the top three slot machine market leaders in terms of occupied gaming hall area. At that time, Favbet's area was 2649 square meters, which constituted 7,9% of the total area of ​​all official slot machine halls in the country. It also ranked third – only Win and First had more.

Favbet's market share in the slot machine market as of the end of 2021, based on the floor area of ​​gaming establishments. Infographic by Opendatabot

It's surprising, you must admit, that with such a market share, year after year, they end up with losses, while working in what is arguably the most profitable business today.

And another interesting detail. Based on the 2022 results, all three LLCs operating under the Favbet brand in various gambling markets reported losses in the millions. Yet, the Favbet Foundation, a charitable foundation founded in 2020 by Favbet, in the first year of the full-scale invasion of Ukraine, reported allocating 193 million hryvnias to the state budget and in support of the Ukrainian Armed Forces and Ukrainians affected by the war. Where does the foundation get its money, when everywhere you look, there are only losses? It turns out the company still has income of unknown origin somewhere on the side, which it used to promote itself to the tune of almost 200 million hryvnias. What is this if not a direct sign of shady business practices and confirmation that all these losses reported in the reports are nothing more than tax minimization? Quite a market leader, indeed. Except perhaps for losses.

How Andrei Matyukha learned to negotiate with the authorities

If Favbet is officially a virtually unprofitable business, with the exception of the demonstrable profits of Favbet Bookmaker Company LLC only starting in 2023, then the group of companies must be making money unofficially and illegally. Just as it did for the entire 11 years of gambling outlawry—from 2009 to 2020.

The owner of the Favbet group of companies is Andrey Valerievich Matyukha. He founded the bookmaker "Favorit" (the former name of the FavBet brand) back in 1999. In 2001, he launched a betting website, and by 2005, the network covered more than 90 cities in Ukraine and had approximately 170 betting shops. In 2013, the company launched operations in Belarus, in 2016 – in Romania, and in 2018 – in Croatia.

As is well known, gambling has been banned in Ukraine since 2009, but this didn't stop Andriy Matyukha from continuing to develop his now-illegal business in Ukraine. Like most other businessmen in this industry, he disguised slot machine parlors and sports betting sites as lotteries, which the state had legalized.

Law enforcement agencies periodically caught up with Matyukha's companies: in 2013, a criminal investigation was opened , which established that Andrey Matyukha's controlled companies, Dnipro-Viktoria LLC, Favorit Invest LLC, Fansportclub LLC, Modern Payment Systems LLC, and World of Payment Systems LLC, had long been conducting illegal gambling operations under licenses for the production and distribution of state lotteries. Later, the Kyiv prosecutor's office conducted searches of FavBet offices, seizing dozens of pieces of computer equipment.

In 2016, police investigators in criminal case No. 12016100040000990 even identified a chain of companies belonging to Andrey Matyukha, through which he channeled money earned from the Favorit Sport bookmaking business. Players' funds were deposited into the accounts of Primefort LLC and Neuron Gold LLC, and then transferred to other companies controlled by Matyukha—Planeta Sport LLC, Sport Arena LLC, and Sfera Max LLC. Furthermore, a significant portion of the money was laundered through Media Skop Global LLC, ostensibly for advertising services for Favorit. As stated in the case materials, the illegal excess profits were ultimately spent on real estate and cars.

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At the same time, the SBU even reported the "liquidation" of the bookmaker "Favorit" in Ukraine for financing terrorist activities in eastern Ukraine—apparently by paying out winnings to residents of the occupied areas of Donbas. However, not a single attempt by law enforcement to bring Andriy Matyukha to justice has ever reached its logical conclusion.

Why? Perhaps because Andrey Matyukha had long since learned the lesson: you have to negotiate with the authorities, then your business, no matter how illegal, will remain safe and sound. In 2013, hackers from the international group Anonymous hacked the email accounts of Party of Regions deputies and published numerous emails they found. Among them was an email from Andrey Matyukha in which he complained to the Party of Regions members about how his illegal bookmaking business was constantly being raided by law enforcement, paying them $150 a month, which is why Matyukha made an offer to the authorities at the time.

"The monthly payments to law enforcement agencies across Ukraine currently amount to approximately $150,000, but this doesn't guarantee any stable operation. The company is prepared to cooperate with the Ministry (of Internal Affairs) centrally and not locally. If all our locations in all regions operate reliably, we are prepared to increase the monthly payments to $200,000 , " Andriy Matyukha appealed to the authorities, asking for a prompt response from the Ministry of Internal Affairs in the event of further "raids" on his slot machine parlors.

Apparently, the offer was accepted—Matyukha's gambling halls continued to operate, and he hasn't found himself in the dock in all these years. Just as he did then, and perhaps even now, the owner of Favbet manages to reach agreements with the authorities in this way, because even today, despite numerous questions regarding its transparency, his business, unlike his competitors, is not subject to any attacks from law enforcement or the authorities in general.

How Favbet accepted bets without a license for two years with impunity

The first of these questions concerns Favbet's operations in 2021–2022. As we noted in the public investigation above, Andriy Matyukha held off on legalizing his bookmaking business until the very end, obtaining the appropriate license only at the end of 2022. Why? Because a bookmaking license is the most expensive of all, costing 108 million UAH per year. Sports betting is also Matyukha's primary, and therefore most profitable, business. He clearly didn't want to share his profits with the state after so many years of illegal operations.

It wasn't until January 2022 that the Gambling and Lotteries Regulation Commission (GLC) sent Favbet a written request to restrict access to the www.favbet.com website in Ukraine, where the company continued to provide betting services without a license. Judging by what journalists from Delo.ua wrote in their May 2022 investigation about Favbet's illegal operations in Ukraine, the site continued to operate freely in Ukraine at that time, which is why Andriy Matyukha ignored the GLC's request.

In early 2022, the Ukrainian Sports Betting Authority (KRAIL) demanded that Favbet cease its illegal, unlicensed bookmaking operations in Ukraine.

And yet, he faced no criminal charges for violating gambling laws, ignoring licensing requirements, or tax evasion. The state simply waited silently for Andrey Matyukha to "mature" to share his profits with them and finally allow them to obtain a bookmaking license and begin operating legally in his own country.

Moreover, everyone simply watched as the owner of one of the most hyped gambling brands continued to operate illegally through a number of websites and mirror sites for almost two years after the market was legalized. This amounts to at least UAH 216 million in unpaid license fees to the state budget, not counting taxes on income siphoned offshore.

Matyukha has plenty of offshore companies. In fact, half of his extensive network of companies is registered in the jurisdictions of Cyprus, Malta, Belize, and the UK. For example, the Curaçao license for the website www.favbet.com was obtained by Favorit United NV, the founder of the Cyprus-based company Bintpash Ltd, which accepts and processes payments from Favbet players. The director of this company is Igor Sosonyuk, Andrey Matyukha's business partner. Andrey Matyukha himself is the beneficiary of seven companies registered in the UK and Malta.

What does Andrey Matyukha's business look like?

What is the business structure of Andrey Matyukha's Favbet group of companies? Almost all Ukrainian companies are registered to his son, Dmitry Matyukha, who is also the beneficiary of several companies in the UK and Malta.

And while the Ukrainian authorities allowed Matyukha to operate without a license in Ukraine, the money from users of the www.favbet.com website went not into the budget of the warring country, not into its economy, but to one of Andrey Matyukha's offshore companies.

How Favbet Lied About Its Operations in Russia

The second question about Matyukha's business transparency is even more interesting. In May 2022, Favbet released a statement containing a categorical and unambiguous assertion that the bookmaker does not operate in Russia or Belarus. Furthermore, the company claimed it had never operated in the Russian market. "In its entire history, Favbet has never operated in Russia... It's not that Favbet no longer operates in the Russian market, but it also never did. Favbet had no offices, no licenses, no payment methods for clients, and, moreover, no marketing activities," the statement read, adding that "registration of players from Russia has been closed, and the accounts of players who had once been on the site during its 22 years of operation have been blocked." In other words, they never operated in Russia, yet the accounts of Russian players had to be blocked—an interesting contradiction, isn't it? Let's see if Matyukha's company was telling the truth.

Even a cursory analysis of Russian registries and databases immediately reveals a host of interesting questions. If Favbet never operated in Russia, then why did it register its trademark there , which would remain valid until December 30, 2024—that is, just a month ago, almost three years after the start of Russia's full-scale invasion of Ukraine.

Favbet, bet invest

The registration of this trademark was handled by the Russian LLC "Bet Invest," registered in Moscow at the height of the war in Donbass—on June 17, 2014. The director of this LLC was listed as Russian citizen Tatyana Anatolyevna Kotsyak, who, incidentally, in 2015 registered a sole proprietorship in Crimea, annexed by Russia—the Russian equivalent of a sole proprietorship.

The internationally registered Favbet trademark, which is still valid in Russia and will remain valid until March 3, 2030, because no one has revoked the trademark rights, was personally registered by Andrey Matyukha in March 2020, according to the Moscow Patent Service.

The fact that the Favbet trademark has not been cancelled in Russia is the reason for the sanctions imposed on the bookmaker. In the spring of 2023, the National Security and Defense Council of Ukraine and Ukrainian President Volodymyr Zelenskyy imposed sanctions on the bookmaker Parimatch specifically for the use of their trademark in Russia following the outbreak of the latter's major war against Ukraine. As RBC-Ukraine reported , "in fact, the licensing agreements for the use of the Parimatch trademarks (in Russia) were terminated in September 2022," although the Cypriot holding company Rillius Holding Limited, the owner of Parimatch™, claimed that this would be the case in 2022.

Parimatch attempted to challenge this very issue in Ukrainian courts by filing a lawsuit against RBC-Ukraine, but the Cassation Commercial Court, part of the Supreme Court, ultimately dismissed the Parimatch group of companies' lawsuit against the journalists, effectively confirming that the presence of a trademark in another country is a sign of business activity there.

Meanwhile, the Favbet trademark, registered in Russia and unaltered, remained in effect in Russia until the end of 2024. Once again, no one in the Ukrainian authorities paid any attention to this, and no sanctions were imposed on the bookmaker, despite the similar situation—the same signs of presence in Russia, for which one company was sanctioned and had its license revoked, while the other was not. How, so to speak, is the Favbet trademark, valid in Russia, any better than the Parimatch trademark?

So, returning to Favbet's claim that they've never operated in Russia. Are you sure? Even without addressing the fact that favbet.com has been accepting bets from Russians and residents of occupied Ukrainian territories throughout the years of Russian aggression against Ukraine, paying out winnings, as evidenced by numerous online reviews from Russians of Favbet and Favorit bookmakers, a simple question: if you've never... Back in 2014, when Russian troops annexed Crimea and invaded Donbas, starting a war there.

One of many reviews from Russian players about the work of the bookmaker Favbet

So why did Andrey Matyukha decide in 2020 to register the Favbet trademark with an international registration in an aggressor state, which remains in effect today? And why did he issue notarized powers of attorney to Russian citizen Tatyana Kotsyak, director of Bet Invest LLC, to represent his interests in Russia?

Is Andrey Matyukha a citizen of the Russian Federation?

And why did he need a Russian passport, which he constantly denies having? A photo of a Russian passport bearing Andrei Matyukha's name can be found online, but its authenticity is still difficult to confirm. However, even today, some Russian registries show that Andrei Valerievich Matyukha was registered as a Russian citizen for a long time, right up until November 11, 2022.

Already having Russian citizenship, Andrei Matyukha received tax identification number 770505760695 in Russia, which was valid from October 11, 2001 to November 11, 2022.

Matyukha has now renounced his Russian citizenship, but still has a new tax identification number (TIN) 920459743181, which is currently active. Furthermore, Russian registries list Matyukha's address in Russia: Moscow, Bolshaya Pionerskaya Street, Building 18, Apt. 25.

This means that Favbet's owner effectively remained a Russian citizen until the end of 2022—more than six months after the start of the full-scale war. Moreover, he currently maintains a Russian tax identification number (TIN), which likely allows him to pay taxes to the aggressor state.

As a reminder, Ukrainian authorities also imposed sanctions on the bookmaker Parimatch because the Parimatch Tech group of companies included companies founded by Russian citizens. The truth is, the owner of the group of companies was himself a Russian citizen. Once again, for some reason, no one noticed this, and no obstacles were created for Andriy Matyukha's business development in Ukraine.

How Favbet maintains a presence in Belarus

In its May 2022 statement, Favbet also claimed that it had ceased operations in Belarus as of March 1, 2022, and that its bookmaking halls, website, and office in the country had been completely closed, with its license surrendered. However, Favbetbel LLC still operates in Belarus, registering four Favbet trademarks there, three of which are valid until 2028 and 2029. This same company also received a bookmaking license in Belarus valid until February 14, 2024.

According to Belarusian registries, the founders of Favbetbel LLC remain Andrei Matyukha personally, as well as his British company, Andalidi Invest LTD, where he was listed as the founder and director until the fall of 2022, when he transferred the company to his partner, Valery Sokol. The director of Favbetbel LLC is Belarusian citizen Maxim Starichenko, to whom Matyukha issued a notarized power of attorney in 2021 to represent his interests in Belarus until 2024.

The co-founder of the company, which is the copyright holder of the Favbet trademarks operating in Belarus, is Andrey Matyukha himself.

So, is Favbet, the new "leader" of the Ukrainian gambling market, really so "clean" and "transparent," as some media outlets are calling it today, that Ukrainian law enforcement agencies, the National Security and Defense Council, the executive branch, and the Commission for the Regulation of Gambling and Lotteries are, for reasons unknown, completely ignoring it. This includes tax evasion by an entire group of companies, which have been demonstrating losses to the state year after year, illegal bookmaking operations for two years without a license, and the presence of active trademarks and companies in Russia and Belarus. Why is the Ukrainian government turning a deaf ear to all this in relation to Favbet, but not to a number of other gambling operators? Has the Ukrainian government really acquired a favorite in the gambling industry, one that can do what others cannot?

How are the Favbet trademark holders in Russia and Belarus connected to each other and to Andrey Matyukha?

P.S. Incidentally, Andriy Matyukha hasn't been living in Ukraine for the past three years. According to our information, he has been permanently residing in Croatia since January 2022. During this time, he has visited 25 countries, including, in addition to European countries, Argentina, Israel, Saudi Arabia, the United States, Qatar, Chile, Uruguay, the United Arab Emirates, and the Maldives. Matyukha never visited Ukraine during the war. I wonder how he registered in Croatia and what passport he used—as a Ukrainian refugee, or if he might have other citizenship? After all, his passport will eventually expire, and, as is well known, Ukrainian embassies and consulates no longer renew documents for those who refuse to travel.

We 'll be monitoring the government's response to the clearly anti-Ukrainian activities of Andriy Matyukha and his FAVBET gaming empire. In our next article, we'll tell you about Matyukha's collaboration with the Diamond Pay payment system, which helped two Russian-linked casinos withdraw a billion hryvnias in five days. Stay tuned, it's going to be interesting.

To be continued ...

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