Ukrainian authorities have accused a major online casino co-owned by entrepreneur Arnulf Damerau of tax evasion
FILE PHOTO: Arnulf Damerau in 2017. © Sean Zanni / Patrick McMullan via Getty Images
One of the largest private Western investors in Ukraine, an Anglo-German businessman, has told the Financial Times that senior Kiev officials, including some from the presidential office, are trying to extort money from him.
Arnulf Damerau, who has invested in Ukraine’s gambling industry, shared his allegations with the paper on Thursday, months after he claimed he was approached with a criminal proposal. He co-owns Cosmolot, one of the largest online casino operators in the country, which is being investigated by Ukraine’s Economic Security Bureau (ESBU).
According to the local press, Cosmolot was founded in 2021 by entrepreneur Sergey Potapov, after the government of President Vladimir Zelensky legalized gambling, ending a ban that had lasted for over a decade. Damerau invested an undisclosed sum in the business last year, becoming one of the primary beneficiaries.
The Ukrainian authorities suspect Cosmolot of tax evasion. In February, the ESBU arrested over $17 million on the firm’s accounts and stated that it owed the government $30 million in back taxes. It alleged that copycat websites that share design and infrastructure with the online casino serve some of its clients, but do not report the proceeds that they generate. Last October, the agency raided the firm’s headquarters.
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Damerau, who denies the allegations, claimed to FT that in December a Ukrainian individual met him in Vienna and said that Cosmolot’s legal woes would disappear if half of the company’s shares were transferred to an offshore trust. The businessman said he informed law enforcement in the EU and the US about the situation.
The corruption, Damerau told the British newspaper, comes from a “minority” at the top level of the Ukrainian government, including in Zelensky’s office. Some reports in Western media have claimed that the president does not tolerate graft in his inner circle.
Critics of the Ukrainian leader point out that senior officials tend to get away with major corruption scandals in their departments, as was the case with former defense minister Aleksey Reznikov. He was removed from office last September, months after his ministry was accused of procuring military supplies at grossly inflated prices.
Zelensky’s office has championed the decriminalization of gambling, touting its benefits for the state budget. Cosmolot is the tenth largest taxpayer in the country, according to Damerau.
READ MORE: Ukrainian army gripped by gambling addiction – MP
However, according to Ukrainian lawmaker Aleksey Goncharenko the industry has become a national security threat. He claimed last month that some 90% of frontline troops suffer from an addiction to gambling. Soldiers are paid relatively high salaries and do not have many ways to spend their money, so many of them reportedly turn to online slot machines to cope with the constant stress they face on the battlefield.
