The trouble with Ostarine: Jimmy Wallhead’s
16th March 2018
As reported by Josimar, 1xBet has recently been declared bankrupt for failing to reimburse customers. However, despite being subject to regulatory action in three jurisdictions, the gambling operator is still accepting bets today. It also remains a major sponsor of sport, retaining deals with FC Barcelona, the Confederation of African Football (CAF), Italy’s Serie A and more.
1xBet continues to operate because modern gambling operators are international and not located in a single jurisdiction. This means that the territory-focused regulatory regime will always be one step behind the savvy operator, who can register numerous domains, licenses and offices across the world.
Such an approach allows operators to continue should regulators ban one website or remove a licence to operate in a particular territory. Bolder operators might even claim that copies of the original site licensed overseas are unconnected, hampering efforts by law enforcement to seize their assets.
As previously reported by Josimar and The Sports Integrity Initiative (The SII), gambling has infiltrated sport – football in particular – to such an extent that determining where the money generated by an operator ends up has become a very difficult task. This was recognised by the Asian Racing Federation (ARF) in its recent State of Illegal Betting Report, which highlighted that a boom in sports betting and regulatory crackdowns on traditional forms of money laundering make sports betting an attractive area for criminals.
The ARF Report states that organised crime could create a sports betting company for money laundering purposes. ‘This entity would of course provide a sports betting vehicle for mainstream gamblers, but its main purpose would be to act as an underground money remitter’, it reads. ‘This would mean the crime syndicate would pay no turnover tax, make a profit on itself as a standalone betting entity and also mirror its brethren in providing no assistance to law enforcement or government regulators. All this requires is high-speed internet access and a base in a country that is sympathetic. Such conditions already exist in a number of locations around the world, and there have been several high-profile cases of organised crime groups operating in exactly this manner.’
There is no evidence that 1xBet is operating in the manner described by the ARF. However it does operate a massive network of domains across the world, making it almost impossible to shut down. As we discovered, tracking down where the company is based and where its assets are located is like chasing a ghost.
1xBet was founded by Roman Semiokhin (Роман Семиохин), Dmitry Kazorin (Сергей Каршков), and Sergey Karshkov (митрий Казорин). In October last year, the trio were named as 1xBet’s founders by the Bryansk branch of the Investigative Committee of the Russian Federation (the SKR/СкР), which found 1xBet guilty of generating 63 billion Roubles (£459 million / €551 million) in illegal gambling income.
‘The preliminary investigation and the Court established that from October 2014 to May 2019, three residents of the regional centre, who are currently on the international wanted list, organised the development of software for organising and conducting gambling on the 1xBet information resource in office premises in Bryansk, and implementing technical support for this site’, reads a statement. ‘Gambling was carried out without obtaining a license issued by the Federal Tax Service of Russia in accordance with the procedure established by law’.
Yes, you read that correctly. Despite being founded by three Russian businessmen in the Russian city of Bryansk, 1xBet doesn’t hold a Russian licence. Four of 1xBet’s principal figures (here, here, here and here) are on the SKR’s ‘wanted’ list. A website (now suspended) has been set up for the company’s defrauded victims within Russia, which it estimates to number over one million.
Last October wasn’t the first time that 1xBet caught the attention of Russian regulators. The Russian State operates a service that can be used to check whether access to a website has been restricted due to violations of the Federal Law on Information, Technology and Information Protection. Access to 1xBet.com has been prohibited due a 2013 ruling and two rulings in 2016. All three of these rulings reference Article 15.1, which concerns violations of Russia’s gambling legislation.
As reported by Josimar, on 6 May this year the Curaçao Court of Justice upheld an appeal by the Foundation for Representation of Victims of Online Gaming (SBOK) against a Court of First Instance Decision to dismiss a bankruptcy claim against 1xCorp N.V. In other words, it declared 1xBet bankrupt.
SBOK works with customers who it assesses have legitimate claims against gambling operators licensed by Curaçao for either failing to return money owed, or failing to protect against gambling addiction. But gambling is worth a lot of money to Curaçao.
In Report, the ARF estimates that over 12,000 online gambling operators are licensed through agreements with Curaçao’s four master licence holders – Cyberluck Curacao N.V. (Curacao-eGaming) #1668/JAZ; Gaming Curacao (GC) #365/JAZ; Curacao Interactive Licensing N.V. (CIL) #5536/JAZ; and Antillephone NV #8048/JAZ. Curaçao allows these four master licence holders to approve the issue of sub-licenses to applicants for between €35,000 and €45,000 per year, generating approximately €480 million per year in licence fees – or €120 million per year, per master licence holder.
Most gambling regulators supply a list of operators they license. There is no way of checking exactly which gambling operators are licensed by Curaçao.
Sport – and football in particular – is still being used to promote 1xBet, despite the judgments against the company in Russia and Curaçao. 1xBet has also been targeted by regulators in Great Britain.
In August 2019, a Sunday Times investigation uncovered that 1xBet was offering odds on children’s sport, as well as promoting a ‘Pornhub’ Casino, featuring topless Croupiers. A Gambling Commission inquiry followed, after which 1xBet suspended its UK operations and Chelsea, Liverpool, and Tottenham Hotspur ended sponsorship deals with 1xBet. However, not everybody in football cut ties.
1xBet cannot be accessed in Spain, where it sponsors FC Barcelona in a deal that doesn’t end until July 2024. It cannot be accessed in France, where it is the African betting partner of Olympique Lyonnais, and redirects to another operator licensed by Curaçao with an address in Nicosia, Cyprus. However it can be accessed in some African countries.
It cannot be accessed in Italy, where it is the ‘presenting partner’ of the Serie A, having agreed a similar deal with Spain’s La Liga. It also sponsored the postponed 2021 Africa Cup of Nations (ACN), which took place in January and February this year.
1xBet agreed a sponsorship deal with the Confederation of African Football (CAF) in February 2019. Late last year, reports emerged that Russians Artur and Vadim Mildov were attempting to gain entry into Kenya after being refused reentry into the country in 2019 due to a deportation order.
It is alleged that the brothers are agents for 1xBet, which is – you’ve guessed it – banned in Kenya. The duo are understood to have been Directors of Midlands Logistics, a now-defunct company with an address in Nicosia, Cyprus.
The Russian word for ‘Bet’ is ‘Ставка’ – or to use an anglicised term, ‘Stavka’. 1xStavka.ru is licensed to offer odds within Russia. The Russian gambling website has remarkably similar branding to 1xBet, as this cached version of the site illustrates. Access to 1xStavka has never been restricted inside Russia.
1xStavka (1xСтавка) sponsored football clubs FC Krasnodar and FC Zenit until 2020. When these clubs played in European competitions, 1xBet replaced 1xСтавка on their shirts.
On the same day (31 July 2020), Winline announced that it would replace 1xStavka as sponsor of FC Krasnodar and FC Zenit from the start of the 2020/21 season in a three year deal (statements are here and here). The way in which it is licensed is remarkably similar to 1xStavka and 1xBet.
Winline.ru is licensed to operate within Russia through Licence No. 7 of the Federal Tax Service of Russia, and through another licence to offer bets in Russia issued in 2016. However, although Winlinebet.com looks almost exactly the same, it doesn’t hold a licence to operate in Russia, and no trace of any licence can be found on its internet site, like 1xBet. Both Winline sites feature exactly the same odds on exactly the same games, like 1xBet and 1xStavka.
It is understood that Winlinebet.com claims to hold authorisation to offer gambling services from the government of Costa Rica. However, in similar fashion to Curaçao, gambling companies need only register a Costa Rican corporation; register with the local tax authority; and obtain a commercial licence from local government.
On the company page of its internet site, Winline.ru claims to have been established in 2009. It seeks to distance itself from Winlinebet.com by arguing that it is ‘no longer behind any western analogues’. However, the ‘Rules’ page of Winlinebet.com’s internet site is in Russian, and references ‘Winline’ and not ‘Winlinebet’.
The rules on Winlinebet.com are different from the ones published on Winline.ru’s internet site, yet they reference the legal Russian company and not Winlinebet.com. Why would a ‘western analogue’ that can only operate outside of Russia create a new set of rules, but reference a different company only licensed to operate in Russia? Why would it write those rules in Russian if it isn’t targeting Russia?
Its payment page shows that Winlinebet.com is targeting Russia. This outlines that payment is accepted from ‘all countries of the world, except for the EU Member States, the USA, Canada, Latin America, Australia, New Zealand and Japan’. A further note advises that ‘temporarily, funds are only paid to cards issued by banks of the Russian Federation’.
So, Winlinebet.com will accept payment for bets from a number of countries. However if your bet is successful, you will need a Russian bank card to withdraw your winnings. And your payments will be handled by Hilonius Management Ltd., a company based in Nicosia, Cyprus.
The address for this company is listed in the Panama Papers. Of course, being listed in the Panama Papers only shows that companies have connections to offshore bank accounts and doesn’t automatically suggest criminal activity.
Similar terms are offered on the payment page of Winline.ru. However a key difference is that like 1xStavka, payments are handled by TSUPIS (ЦУПИС), which under Russian legislation is the only payment provider licensed to process gambling transactions.
Either Winline.ru and Winlinebet.com are produced by the same people, or somebody is cloning the site. The latter seems unlikely, as Winlinebet.com claims to have been operating since 2009. We couldn’t find any evidence that Winline.ru had complained about any ‘clones’ in Winlinebet.com’s 13 years of operation.
In similar fashion, no evidence exists about 1xStavka complaining about any of its numerous ‘clones’. And there are many. Over 300 different versions of 1xBet feature on the Cypriot National Betting Authority’s list of illegal gambling websites.
Winlinebet Ltd. was registered with Companies House in the UK until October 2020, when it was struck off the register. Three individuals are mentioned in connection to the company: Corneliu Bunciuc, Vyacheslav Bayramdurdyevich Charyev, and Deepak Devidas Shetty.
In 2019, an investigation by OpenDemocracy found that Shetty was named as Directors of Corso Solutions LP, one of many firms set up by Charyev as part of an international company formation network. It found that Charyev ran a network of onshore and offshore companies registered across the world, which it suggested were connected to money laundering.
1xBet has registered offices in Curaçao and Cyprus. On its internet site, 1xBet claims to hold licence 1668/JAZ issued by Curaçao eGaming, hence the need for 1xBet’s owners, 1xCorp N.V., to hold a Curaçao address. The 1668/JAZ licence held by 1xBet is registered to Cyberluck Curaçao N.V., another name for Curaçao eGaming.
To obtain a Curaçao licence, all that is needed is a locally registered company, documents held by The SII suggest. There is no way of checking which bookmakers are licensed by Curaçao eGaming on its own internet site. It is therefore debatable whether any revocation of 1xBet’s Curaçao licence would have any effect.
Sources indicate that just under 60 bookmakers quote the same licence number used by 1xBet. A Google search for 1xBet’s licence number will direct you to many websites which allege that it is meaningless. ‘You’d be better off getting a licence from a houseplant’, quips one. Sources have told The SII that what this means in practice is that nobody is holding Curçao licensed bookmakers to account.
A disclaimer on 1xBet’s internet site mentions that it is operated by Klafkaniro Ltd., Bonnal Ltd., and the now bankrupt Curaçao company, 1xCorp N.V. Both Klafkaniro and Bonnal Ltd. are based at addresses in Cyprus. The address registered for Bonnal is also mentioned on a 1xBet corporate website, which confusingly also lists Exinvest as the company’s owners, at the same Cypriot address.
The Cyprus company register lists Olena Hanych as a Director of Exinvest, and OpenCorporates mentions that she was also a Director of Bonnal and Klafkaniro Ltd. No information could be found about Hanych in Russian or English. The 1xBet website lists a Nicosia address for Klafkaniro Ltd., however the Cyprus company register disagrees and lists another address in Limassol, where Bonnal Ltd. is also based.
If 1xBet is licensed by Curaçao and Winlinebet by Costa Rica, why do both need addresses in Cyprus? We visited the Mediterranean holiday island in an attempt to find out.
None of the nine addresses we visited suggested the presence of a company that might be connected to a gambling business. There was no evidence that any of the companies listed as owners of 1xBet or Winlinebet were present at any of the Cypriot addresses we visited.
The address given for Midlands Logistics, formerly owned by alleged 1xBet agents Artur and Vadim Mildov, looked as if it had been hastily abandoned some time ago. The flat was littered with abandoned personal items, and dusty cars with flat tyres adorned the garage.
Two Russians tuned up at Litanzia Court, the address for 1xBet’s Klafkaniro Ltd. They checked the post and then left. But Russian presence in Cyprus is hardly an anomaly. Research has indicated that 1xBet and Winlinebet.com are not the only bookmakers that have connections to Cyprus – for example, the company that 1xBet redirects to in France, Betwinner, also lists a Nicosia address.
The use of Cypriot companies by Russians is also not confined to gambling. In 2012/13, Cyprus was hit by a financial crisis. This affected Russians who had banked money with Cypriot financial institutions following the collapse of the Soviet Union. It is understood that many Russians with large deposits were given ownership shares in Cypriot banks in an attempt to compensate them for their losses.
In addition, Russians were by far the largest recipients of passports through the Cyprus Investment Programme uncovered by Al Jazeera. Applicants from over 70 nations were invited to make a €2 million donation in exchange for which their citizens would be able to apply for Cypriot citizenship and – more importantly – a European Union passport. Under the scheme, over 2,500 people applied for Cypriot citizenship – 922 of which were Russian.
“Cyprus is a place where Russian business practices feel at home”, financial crime expert Graham Barrow told The SII. “It also provides a level of secrecy to those who don’t want their business connections revealed to the authorities.” Jakub Janda, Director of the European Values Center, put it another way. “Cyprus is a Russian bank with dirty money posing as a EU State”, he recently Tweeted.
Cyprus is a Russian bank with dirty money posing as a EU state.
— Jakub Janda 楊雅嚳 (@_JakubJanda) February 25, 2022
So, is there a connection between 1xBet and 1xStavka? If such a connection can be established, Russian gambling regulators may have questions to answer about why it permitted 1xStavka’s continued operation, after 1xBet was convicted of unlicensed gambling by its own law enforcement authorities in October last year.
1xStavka holds Licence No. 17 of the Federal Tax Service of Russia, issued on 1 October 2010 and reissued on 14 August 2019. It therefore is registered to pay tax to the Russian State from gambling earnings. Payments to 1xStavka are handled by TSUPIS (ЦУПИС), which under Russian legislation is the only payment provider licensed to handle gambling transactions. In other words, customer payments to gambling operators within Russia are regulated and protected.
1xStavka operates on the basis of a licence issued to another company, Bookmaker Pub Ltd., issued in 2010. This company (pictured in this article’s header) registered the ‘1xСтавка’ and the ‘1x’ trademarks on 27 March 2020.
When 1xBet was prosecuted in Russia and its owners fled to Cyprus in October last year, the ‘1xСтавка’ and the ‘1x’ brands were able to continue offering bets in Russia through the licence issued to Bookmaker Pub Ltd.
The Russian bookmaker’s association lists registered offices for 1xStavka in Bryansk, Russia, where 1xBet’s fraudulent operation was discovered. In addition, the Russian Unified Register of Legal Entities (ЕГРЮЛ) lists Dmitry Kazorin as Founding Bookmaker Pub Ltd., which holds 1xStavka’s licence to offer bets in Russia, on 12 April 2018. And he is one of the four individuals wanted by Russian authorities in connection to 1xBet’s generation of illegal gambling income.
Google Maps lists an address for a 1xBet outlet in Omsk, which pictures from 2014 show was branded as 1xBet. However, Google Street View images from 2021 show the same shop rebranded as 1xStavka (see right).
1xBet can be accessed from jurisdictions including Georgia, Moldova, Hong Kong, and South Korea. In Georgia and Moldova, entering 1xStavka.ru into your browser redirects to 1xBet-23286.top.
In summary, 1xBet has been convicted of defrauding customers in Russia, and has been declared bankrupt by a Court in Curaçao on the basis that it failed to return funds to customers. Access has also been restricted in a number of other jurisdictions.
According to the Bryansk branch of the SKR, 1xBet has been taking bets from customers since 2014. On 6 June, The SII accessed 1xBet and found it was still operational and accepting bets. How has it managed to continue to operate, despite such regulatory concerns?
Every bookmaker needs a data supplier. Without accurate and fast information on what is taking place on the field of play, gambling operators simply cannot operate – especially where in-play odds and bets are involved.
Analysis of the source code of 1xStavka, 1xBet, Winline.ru and Winlinebet.com shows that all four are supplied with data by Sportradar. We couldn’t find any evidence of data supplied by BetGenius or IMG in the source code of either Winline site, despite Winline.ru claiming to have data agreements with those companies.
This doesn’t suggest anything improper by the Swiss sports data and integrity experts. A clone of a licensed and regulated website would also copy that website’s source code, including who provides it with data to offer odds on football games.
We asked Sportradar if it is supplying data to both 1xStavka and 1xBet. It declined the opportunity to comment. This is odd, since Sportradar has already confirmed that it will continue to supply data to Russian bookmakers, despite Russia’s invasion of the Ukraine and the resultant imposition of sanctions.
“We are still doing business [in Russia]” Carsten Koerl, the company’s CEO, told Bloomberg. The company told LegalSportsReport that pulling out of Russia would cost it US$13 million in earnings. Koerl holds a 23% stake in Russian bookmaker Liga Stavok, as reported by PlayTheGame.
Another company licensed to offer bets in Russia is AstraBet.ru, which operates under License 33 of the Federal Tax Service of the Russian Federation. The ‘About Us’ section of its internet site confirms that it is owned by Sportradar LLC, which was granted a licence to offer bets in Russia in 2020.
Is this an unfortunate naming coincidence, or a deliberate attempt to pillory the integrity giants? Sportradar denied any connection with the Russian company that takes the same name.
‘Sportradar Group AG has no affiliation with the Russian entity “Sportradar LLC”’, read an emailed response to our questions. ‘We vigorously contest copyright infringement and will continue to ensure our trademarks are upheld’.
The Russian Sportradar was established in 2018 by Cypriot company Magandini Holdings. Sportradar registered its name as a trademark a year earlier. It would appear that the Russian Sportradar has been happily infringing that trademark for four years.
Astrabet.com is accessible outside of Russia and holds Licence 365/JAZ issued by Dutch Antilles Management NV. There is no suggestion that the two sites are connected in anything other than name. Astrabet.com is operated by Bislot N.V., a Curaçao company whose subsidiary, Factdata Ltd., is registered in the UK.
Sportradar LLC is a registered company in Russia, and lists Aleksey Vyacheslavovich Smaznov (Алексей Вячеславович Смазнов) as Director General. Its registered address is an office building in Moscow. However, as mentioned, it was established by Magandini Holdings, whose registered address is a residential building near Paralimni and Malama Beach, South of Famagusta, Cyprus.
Sources have told The SII that the main beneficiary of Magandini Holdings is Roman Semiokhin. He is one of the four Founders of 1xBet wanted by Russian authorities that fled to Cyprus after being charged in October last year.
As previously mentioned, the Cypriot connection isn’t confined to Russian football clubs. Stake.com has recently agreed a club record sponsorship deal with Everton. It also sponsors English football club Watford, and temporarily sponsored Swindon Town in the FA Cup. It also pays to appear on FA Premier League advertising hoardings.
In the UK, Stake.uk.com mentions that it is ‘powered by’ the Isle of Man’s TGP Europe, which is licensed by the British Gambling Commission. However outside of the UK, Stake.com states that it is owned and operated by Medium Rare N.V., and lists an address in Nicosia, Cyprus.
This address, Lizatia Court, 2087 Nicosia, Cyprus, is the same address given by 1xBet for one of its listed owners, Klafkaniro Ltd. It is also listed on the UK-facing site’s terms and conditions as the owner of the company.
So, it would appear that any Stake.uk.com or Stake.com bets will be handled by a Cypriot company via a Curaçao licence 8048/JAZ, granted to Master Licence holder Antillephone. Medium Rare N.V. also has a registered Curaçao address for licensing purposes. But the Cypriot company listed as owner of Stake.com has the same address as a company apparently connected to 1xBet.
The 8048/JAZ Curaçao eGaming licence held by Stake.com is utilised by even more gambling operators than the 1668/JAZ Curaçao eGaming licence held by 1xBet. Sources indicate that well over 100 bookmakers quote the same licence number. In addition, it is understood that all four Curaçao Master Licences don’t cover Crytocurrency, which is Stake.com’s USP and main payment method.
TGP Europe manages a number of ‘White Label’ internet gambling websites from a small office above a Joe Jennings betting shop on the Isle of Man. Whether TGP Europe and/or the Gambling Commission is monitoring whether these websites comply with licensing requirements appears to fall within a regulatory lacuna, as previously reported by The SII and Josimar.
Watford told The SII that there it is not aware of any connection between Stake.com and 1xBet. However the club said 1xBet may have been ‘powered by’ TGP Europe when it was operational in Great Britain, before withdrawing after the Gambling Commission announced its investigation.
Watford denied reports that Stake.com had paid Watford for its sponsorship in cryptocurrency, confirming that it received the money in Sterling. It also said that it had met Stake.com representatives several times. FC Zenit and FC Krasnodar didn’t respond to questions. Neither did 1xBet or Winlinebet.
The complicated investigation detailed above serves to illustrate how opaque gambling’s involvement in sport has become. Sporting federations and clubs cannot be expected to carry out such research into the ownership of every gambling operator that offers them a sponsorship deal.
It is a concern that sporting organisations have agreements with companies that appear to operate a similar business model to 1xBet, and that many of these trace back to opaque companies in Cyprus. If a gambling business is a legitimate operation, then why aren’t the owners of these companies transparent, as are most of the major players in the gambling industry? That is a question any sport that finds itself approached by an unfamiliar gambling operator needs to ask.
Could FC Barcelona or the CAF be held liable for encouraging customers to place bets with a company that failed to honour them? If Winlinenet.com were declared bankrupt under similar circumstances to 1xBet, could FC Krasnodar and FC Zenit claim not to be aware that it is an international copy of Winline.ru, given both clubs’ prior association with 1xStavka/1xBet? Is any of this worth the risk?
The obfuscation around who exactly owns 1xBet and where its profits end up should ring alarm bells not only for every sport that still has a connection to them, but also for gambling’s regulators and licensors across the world. The 1xBet situation illustrates what can happen when poorly administered licensing regimes are combined with lots of money. According to the Bryansk SKR, 1xBet has been operating since 2014 and according to Wikipedia, since 2007. It continues to operate today, despite being subject to regulatory action in three jurisdictions.
It is able to do this not only because of a poor licensing regime, but also because of poor regulatory control of the data companies that provide it with the information needed in order to offer bets. It is concerning that sporting integrity’s paragons of virtue are prepared to supply such companies with data they can use to offer bets. If that lifeblood were taken away, then such companies wouldn’t be able to touch sport with a ten-foot barge pole.
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