Kyiv City Administration Assistant Chair Volodymyr Holovach invited the Post on March 14 to join his seven-man crew just as the sun rose for their morning raid.
While deputies in Ukraine’s parliament are trying to rid cities of gambling joints, the Kyiv City Administration is cracking down on operatorswho haven’t paid taxes, as well as the Hr 1 million ($200,000) for a license.
After establishing its gaming commission in February to review gaming houses, city officials sent local police on raids to catch those depriving the government of untold millions.
Kyiv City Administration Assistant Chair Volodymyr Holovach invited the Post on March 14 to join his sevenman crew just as the sun rose for their morning raid.
Only Holovach seemed to know the raid route. Even the drivers of other patrol cars didn’t know where the inspection would lead. They simply followed Holovach’s car.
“If we reveal the road, everyone will be informed and ready to meet us as soon as we get there,” Oleksandr Ivakhniuk, Holovach’s spokesman, told reporters assembled in a bus before the raid. “No, this must be a surprise coming.”
At 9:00 a.m., we drove out of the Kyiv City Administration’s lot onto Khreschatyk, over the Dnipro River into left bank Kyiv, stopping on Malyshka Street.
Though many casinos and restaurants lined the road, the commissioners knew which one needed an inspection.
“We know for sure that this place we are going to visit now has no license for running a gambling business,” said Oleksiy Stoianovskiy, chief of the Department of Licensing and Registration. “We were at this place on our very first checkup and confiscated its license.”
Authorities confiscate licenses because of unpaid taxes, lack of licenses or documentation and violations to state resolutions.
“Most often, that concerns noncertified slot machines,” Stoianovskiy said. “But it’s largely impossible to renew a license after it’s deprived.”
Gaming operators must secure licenses and documents from the Kyiv City Administration, issued without charge, and the Ministry of Finance, costing about Hr 1 million.
The outlets must also have a “Consumer’s Corner” displaying copies of all required documents.
Aside from Kyiv’s local police, representatives of the Fund to Combat Economic Crimes and the State Tax Administration can perform raids.
Our destination was a large standard Ukrainian restaurant, Admiral, with no hint of slot machines inside. But after passing through two dining halls, the investigators came upon a third room of more than a dozen slot machines and card tables. At one, three men played poker.
“Who is the boss here?” Holovach asked as soon as he entered the room.
“Who is responsible for the gambling room? Where is the Consumer’s Corner?” he went on with questions.
“I am Oleksandr, a manager,” a man said, standing up from the poker table. “Our manager is not here yet. I have already called him up and asked him to come.”
Oleksandr showed the investigators a board where copies of the documents were stapled; it lacked a Kyiv administration license.
“How can you play here if you don’t have all the documents?” Holovach said.
Oleksandr said they weren’t playing; his two colleagues are interns and were being trained.
“Where can I see that written?” Holovach asked about the alleged interns. “Where is a register of all the slot machines here?”
No answer followed and their boss never showed after a half hour of waiting.
“Now we’ll write the Fund to Combat Economic Crimes and the State Tax Administration and hope they’ll handle this case,” Holovach said, filing a report and taking the inspection onward.
Depending on the profit obtained from illegal slot machines, fund officials determine whether an infringement is an administrative offense, punishable by fines, or a criminal offense, punishable with heavy fines or incarceration.
Depriving licenses is the first step in punishing violators. Once the fund is notified, it can order a casino shut down and its slot machines confiscated.
“We have a warehouse on the outskirts where we keep all the confiscated slot machines,” said Viktor Unts, assistant manager of the city’s Improvement Administration.
The next raid destination was an outdoor bazaar, where a tent stood with two wooden tables of sandwiches for sale and eight slot machines inside.
“Who’s the boss here?” Holovach barked. “Who’s responsible for all this?”
“I’m the only one here, but I am not responsible for this,” said Olia, a shy woman in her early 20s peering from behind a counter. “I’ve been working here for less than two months. I just look after the place.”
The joint had no licensing, lacked documentation, and moreover sold hamburgers and beverages, so the owner had to have a certificate from the city’s Sanitary Epidemiology Station.
“They have nothing here,” Holovach said. “We’ll come back here and will check it again later again. They will have to shut down.”
Every slot machine must have a certificate indicating a minimum winning sum, which they all lacked, Stoianovskiy added.
“You will never win with these,” he said. “These slot machines are about as certified as your standard electronic teapots.”
In the first month of raids, three licenses were already confiscated, Stoianovskiy said. Up to 9,000 slot machines are certified in Kyiv, though many more are illegal, he said, without any idea as to the number.
No legislation regulates Ukraine’s estimated $100 million gambling business, only regulations.
Could the recently proposed bill improve regulating the industry, particularly in moving the gaming houses beyond the city limits?
“Everything depends on the Verkhovna Rada and whether it passes any bills,” Holovach said. “Then we’ll comment on whether we can enforce legislation or not in Kyiv. Considering we don’t have anything adopted, there is nothing to comment on.”
