The Gambling and Lotteries Regulation Commission (GLCRC) has issued the first two casino licenses – for hotels in Odesa and Lviv. They were received by companies controlled by Artem Yushkov, owner of the Kyivskyi business center and a native of Vinnytsia who co-founded a poker club for several years. The casinos will open in hotels in Odesa and Lviv. At the same time, some experts remain convinced that the gambling industry in Ukraine is being built to serve the interests of the so-called "Luzhniki (Babakov) group," which is lobbied by former VS Energy top manager Boris Baum (pictured to the right of Volodymyr Zelenskyy in the collage), now an advisor to the deputy head of the Presidential Office, Kyrylo Tymoshenko (pictured to the right of Boris Baum in the collage).
The receipt of the first two licenses for KV Casino operations was announced through information published on the KRAIL website and a post on the Lavriv.Pro Telegram channel.
KRAIL issued its first two casino licenses a week ago, on March 24. They were received by Kyiv-based companies: Primum LLC (a 4227,5 square meter casino in Odessa's Gagarin Hotel) and Nebula Games LLC (a 500,5 square meter casino in Lviv's Grand Hotel).
The beneficiaries of both LLCs are:
— JSC “Closed-end non-diversified venture corporate investment fund “UA Development”, where the director is Artem Yushkov (Business Center “Kyivskiy”), a developer from Vinnytsia, and he is also listed as the final beneficiary (on November 18, 2020, information about the final beneficiary was removed from the registers);
— JSC "Closed-end non-diversified venture corporate investment fund "Successful," where the director is Sergey Belik, and the last owner is listed as Ilya Bulgakov.
These same legal entities own First Element LLC, which received an online gambling license. Similar licenses were also received by SpaceX LLC, GameDev LLC, and Parimatch LLC (which also received its first bookmaking license).
Poker in Vinnytsia, a business center in Borshahivka, and a casino chain
In the capital, Artem Yushkov is known for owning the "Kyiv" business center in Sofievskaya Borshagovka.
Business center “Kyiv” by Artem Yushkov in Sofievskaya Borshchagovka, photo: wikimapia
A year ago, Propertytimes wrote about Artem Yushkov: "...he began his career in development by building a chain of self-service car washes in Kyiv and the Kyiv region. He successfully implemented a Kyiv Business Center project and is a partner in several cottage community construction projects in Kyiv. He operates and provides consulting services for projects related to property management and an online digital marketing agency. He is also involved in the food service industry and owns several restaurants."
Artem Yushkov is also directly involved in gambling. Specifically, he is a co-founder of the Vinnytsia-based public organization "Grand Capital Sports Poker Club," which is currently undergoing liquidation.
Last year, the website "Vinnytsia Today" wrote the following about Artem Yushkov in an article titled "The Vinnytsia Story of the Dastor Shopping Center Reconstruction Has a Criminal Trace": "...he's not known as a builder or investor. Rather, he's a true 'Blackjack'—the owner of illegal casinos and slot machines. Those in the know call him the 'king of the illegal gambling business,' which has already come under law enforcement scrutiny. Yushkov got involved in the Dastor construction for one obvious reason: to expand his gambling empire...Yushkov is an unofficial millionaire, meaning he can afford to engage in such risky business."
This Vinnytsia shopping center may become the site of the S) Mall shopping center, which Yushkov is investing 100 million hryvnias in. "...rumors have surfaced that an illegal casino could open behind the curtain of the shopping center. Of course, this is a lie and an attempt to stall the reconstruction," Artem Yushkov claimed a year ago.
In a March interview with Novoye Vremya, Artem Yushkov positioned himself as the owner of the online casino company "First Casino." "We will have different brands. Our First Casino group of companies will include, for example, 1CasinoGagarinn or 1CasinoGrand, etc. The First Casino brand is our unifying point, but each hotel will still have its own distinct naming, as each casino is unique. At the Gagarinn hotel complex in Odessa, we will have over 4200 square meters of space, including restaurants, discos, and bars, while at the GrandHotel in Lviv, it will only have 500 square meters, so the gaming area there will be much more intimate... Later, there will be Kharkiv, Zhytomyr, Chernivtsi, Ternopil, Khmelnytskyi, Bila Tserkva, and others," Yushkov explained about the future of his casinos in Ukraine.
Even less is known about Artem Yushkov's gambling partners, Sergey Belik and Ilya Bulgakov (JSC Closed Non-Diversified Venture Corporate Investment Fund "Successful"). According to public records, Belik and Bulgakov are linked by Beni Dorm LLC. Bulgakov also has a business in Mariupol, Maresilt LLC, which sells dairy products, edible fats, and eggs.
Yurushev, Davtyan and the Babakovskys are next in line
KRAIL may likely issue more casino licenses this week. KRAIL previously issued four permits to hotels confirming their premises are suitable for casino use, two of which have already been used (the Gagarin Hotel in Odesa and the Grand Hotel in Lviv). Two more permits were issued to Grand Management LLC (1562,1 square meters at the Fairmont Grand Hotel Kyiv) and Hotel Management LLC (506,8 square meters at the InetrContinental Kiev Hotel), which are part of the so-called "Yurushev family group." It is worth noting that Yelyzaveta Yurusheva, the daughter of multimillionaire developer Leonid Yurushev, is the wife of Oleksandr Skichko, the head of the Cherkasy Regional State Administration, who was appointed to this position on January 29 of this year by Decree No. 38/2021 of President Volodymyr Zelenskyy. In 2019, Skichko was elected to the Verkhovna Rada (VR) from the Servant of the People party in the 197th district (Cherkasy, Kanev, and part of the Cherkasy region) and is still listed on the VR website as a people's deputy.
KRAIL also issued 11 permits for slot machine parlors and bookmakers. Of these, the following were granted permits in Kyiv:
LLC “Hotel Property” (389,1 sq. m in the hotel complex “Lybid”);
LLC “LD-Perspektiva” (313,33 sq. m in the hotel complex “Rus”);
PJSC “Ukrproftur” (618,2 sq. m in the “Tourist” hotel);
OOO Intern (621,2 sq. m in the Opera Hotel).
In the Kyiv region, such permits were received by Illis LLC (1178,7 sq. m in the Verkhovyna Hotel, Petropavlovskaya Borshahivka village) and Siluet-BC LLC (367,6 sq. m in the City Park Hotel, Bila Tserkva).
The permit was received by JSC "Hotel Kharkiv" (311,8 square meters in the Kharkiv hotel of the same name), which is controlled by the DAD investment group—the Davtyan family. As a reminder, Dmytro Davtyan served as Deputy Head of the Kyiv City State Administration under Vitali Klitschko from September 27, 2017, to November 25, 2019.
In addition, permission was received by LLC “PKF “Sigma-3” Ltd” (1038,2 sq. m in the Vinnytsia hotel “France”), LLC “Hotel “Lviv” (412 sq. m in the Lviv hotel of the same name), LLC “Skarb” (440 sq. m in the Rivne hotel “Ukraine”) and PJSC “Intourist-Zaporizhzhia” (468,5 sq. m in the Zaporizhzhia hotel “Hotel Intourist”).
Renowned customs expert Roman Lavriv reported on his eponymous Telegram channel that the largest number of such permits were received by companies associated with the so-called "Luzhniki Group" (or "Babakov Group")—the VS Energy group of companies co-owned by Mikhail Spektor, Alexander Babakov, Yevgeny Ginner, and Mikhail Voevodin. According to this report, the first casino licenses received by companies owned by Artem Yushkov and Sergey Belik may be linked to the "Luzhniki Group."
Furthermore, according to the report, VS Energy, "through City Hotels Management, manages chains under the Premier Hotels, Accord Hotels, and Compass Hotels brands. "A total of 15 properties, including Premier Palace, Slavutich, Rus (squeezed from Mstislav Skorobogatov), Lybid (seized from Ruslan Demchak for debts)... City Park Hotel Bila Tserkva is also their hotel. Slavutich is currently under renovation. Cosmopolitan in Kharkiv and Star in Mukachevo are in preparation," Lavriv reported.
According to Lavriv and other experts, the Luzhniki-Babakov group's successes are due to the efforts of Boris Baum, the "gray cardinal of the gambling industry," who served as a top manager at VS Energy from 2005 to 20015. In a recent interview with Left Bank, Baum confirmed that President Volodymyr Zelenskyy had instructed him to work on the gambling bill, at the instigation of David Arakhamia, head of the Servant of the People parliamentary faction. Baum received Ukrainian citizenship in 2020 thanks to a presidential decree, after which he oversaw the procurement and delivery of medical masks from China to Ukraine.
Today, Baum is an advisor to the Deputy Head of the Presidential Office and the curator of the "Great Construction" project, Kyrylo Tymoshenko, as well as an assistant to the Servant of the People MP and the new head of the Kyiv regional organization of that party, Andriy Motovilovets.
As a reminder, the Rada legalized gambling on July 14, 2020. Since then, lotteries are no longer considered gambling. Slot machines, with no restrictions on their number, will be located in four- and three-star hotels, not just five-star ones. Five-star hotels will be allowed to house casinos.
It was recently reported that the Verkhovna Rada Committee on Finance, Tax, and Customs Policy recommended the Rada adopt a bill that would introduce a flat tax rate on gambling income—10% of gross gambling revenue across all activities. Furthermore, it proposes taxing winnings of at least 48 hryvnias.
In the Verkhovna Rada, the key lobbyist for the legalization of the gambling business is the chairman of the Committee on Finance, Tax, and Customs Policy, Danil Hetmantsev (Servant of the People faction, pictured to the left of Volodymyr Zelenskyy), who, before being elected to the Rada, was a participant in M.S.L. LLC (a gambling organization).
Since October 30, 2020, KRAIL has been led by its first director, ATO veteran Ivan Rudy (pictured to the right of Kyrylo Tymoshenko in the collage). In a November 2011 interview with the League, he said that Boris Baum was KRAIL's "key consultant."
Photo: collage by KV
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