Head of Legal of Energame discusses sanctions on Parimatch and PokerMatch in Ukraine

In an exclusive interview with Gambling.Re, Ievgeniia Derbal, Head of Legal of Energame, addresses the allegations against Parimatch and PokerMatch

On 10 March, Zelensky signed Presidential Decree No. 145/2023 into law. The Decree implemented a decision from Ukraine’s National Security and Defense Council (NSDC) to impose sanctions on 287 companies – which include Parimatch and PokerMatch – and 120 individuals.

Gambling.Re had the opportunity to interview Ievgeniia Derbal, Head of Legal of Energame, and discuss the current situation with the Parimatch and PokerMatch brands in Ukraine. She explains the position of Parimatch group with regards to the allegations against them and the sanctions imposed.

Gambling.Re: What is the current situation with the Parimatch and PokerMatch brands in Ukraine?

Ievgeniia Derbal: On March 10, 2023, the President of Ukraine, Volodymyr Zelenskyy, issued a Decree for the enactment of the Decision of the NSDC “On the application and amendment of personal special economic and other restrictive measures (sanctions)” (“Decree”). The list of sanctioned entities included a number of companies connected with gaming operations in Ukraine under the Parimatch and PokerMatch brands, namely, Parimatch LLC, PokerMatch.UA LLC, and some other companies of the group (“Companies”).

Neither the Decree nor other related publicly available official documents specified any grounds or justifications for imposing the sanctions against the Companies or against any other affected persons and entities. Simultaneously, a number of unofficial statements appeared in the media, alleging that the sanctions were imposed against gaming operators “that avoided paying taxes in Ukraine” and “continued to operate in Russia [despite its invasion of Ukraine].”

Gambling.Re: What is the position of Parimatch group with regards to the allegations against them and the sanctions imposed?

Ievgeniia Derbal: Parimatch group denies any such allegations and considers them defamatory and obviously false. They are taking all necessary legal, GR, PR measures, and instruments to appeal the sanctions and be excluded from the list.

The sanctions impose the following restrictions on the Companies:

• Freezing of assets in the territory of Ukraine;

• Restricting any trade dealings in the territory of Ukraine;

• Suspension of licenses and other state authorizations granted by Ukrainian authorities.

Currently the Ukrainian companies of the group cannot:

• Fulfill their obligations, including payment of taxes and duties, payment of salaries to the employees/remuneration to subcontractors, payments to the counterparties;

• Settle the obligations before the players;

• Plan further activities with the counterparties and close all their obligations, etc.

In order to assess to what extent the Sanctions affect business structures affiliated with Parimatch and PokerMatch, we have ordered a legal opinion from reputable law firms in Ukraine and Cyprus regarding, inter alia, the effect of the imposed Sanctions on the Business, its operation, and assets. The following key points are:

(1) The imposed sanctions are effective solely within the territory of Ukraine and have no extraterritorial effect;

(2) The sanctions are only applicable to the individuals and entities expressly listed in the Sanction List, therefore there are no restrictions which limit or restrict the legal capacity and ability of other non-sanctioned individuals and entities;

(3) There is no publicly available formal explanation of reasons why these Sanctions were imposed, nor are there any provided evidences displaying any breach by any listed individuals or entity of any applicable laws;

(4) Applicable regulations provide for a right of sanctioned persons to challenge sanctions through initiating court proceedings.

Gambling.Re: Has Parimatch continued to operate in Russia despite the invasion of Ukraine?

Ievgeniia Derbal: The Sanctions were imposed upon the decision of the highest public authorities and officers of Ukraine. The position of the company is that the Sanctions are groundless and unjust. Any allegations about continuing operation in Russia cannot withstand any criticism. In fact, immediately after the beginning of the Russian invasion of Ukraine on February 24, 2022, the business publicly condemned the unjustified and unprovoked full-scale war started by Russia and announced the exit from the Russian market. The exit was completed within a month thereafter - by the end of March 2022. Parimatch brand license and gaming platform access were withdrawn from the Russian franchisee. The fact of exiting from the Russian market was confirmed by the two respective legal opinions of the top international law firm.

Moreover, in 2022, the business announced and completed its exit from the Belarusian market (due to Belarus's support of the Russian invasion of Ukraine) by selling its local branch and withdrawing the Parimatch brand license and software access from the local operational company within a few months. Any allegations that Parimatch's (betting and casino business) continues to operate in Russia are defamatory. Furthermore, at the end of 2022, we succeeded in the judicial proceedings against RBC-Ukraine (a Ukrainian local news agency) that falsely stated that "Parimatch continues to operate in Russia." As for PokerMatch (poker business), it has never even entered the Russian market, either directly or through a franchise.

Since the invasion started, the business and our employees have actively supported the Ukrainian armed forces, volunteers, and civilians by providing donations and conducting a number of media campaigns aimed at attracting attention to the war and the necessity of supporting Ukraine. At the current moment, the estimated value of donations for Ukrainian defense and humanitarian purposes ensured by the business and its partners constitutes almost 13 million Euros. The business became a partner of the UNITED24 platform – an international platform for collecting donations for Ukraine defense and humanitarian purposes, established upon the initiative of the President of Ukraine. The business has also joined a number of other initiatives aimed at supporting Ukraine.

Gambling.Re: What measures are the companies taking to appeal the sanctions?

Ievgeniia Derbal: Since the sanctions were imposed, the business has been taking all reasonable measures to protect its interests from unjustified decisions. The companies are preparing to initiate administrative proceedings before the Administrative Court of Cassation within the Supreme Court of Ukraine, pleading for the cancellation of the decree due to the mistaken and groundless inclusion of the companies in the list.

Both Parimatch LLC and PokerMatch.UA LLC, since their incorporation, have duly fulfilled all their tax and other obligations.