Corruption in Ukraine, particularly within law enforcement, has become an obstacle to receiving further tranches from international donors. The final straw for Western partners was the exposure of large-scale corruption involving Deputy Prosecutor General Dmytro Verbytsky and the acknowledgement given to the Prosecutor of the Prosecutor General’s Office, Artem Boyarenko, by a gambling operator. Boyarenko oversees the Ukrainian gaming industry, which has seen its revenues reach staggering levels. The U.S. State Department is demanding a complete overhaul of the Prosecutor General’s Office as the main body responsible for overseeing lawfulness in Ukraine.
Ukraine critically needs funds from American and European partners. In an interview with the Financial Times, Finance Minister Serhiy Marchenko once again urged the U.S. to expedite the provision of a loan amounting to 50 billion UAH. Although these demands are made in an ultimatum-like form, they appear entirely justified. However, the partners have doubts, and these doubts are understandable.
It has long been no secret that the key problem holding back Western partners is corruption in the Ukrainian government. The refusal of U.S. Secretary of State Antony Blinken to meet with the leadership of the Presidential Office during an unannounced visit in May is a clear indication that the West is aware of this problem and that they cannot be fooled. The lack of transparency and the growing corruption are undermining trust in the Ukrainian government and casting doubt on the effective use of aid—essentially, taxpayer money from donor countries. This, in turn, delays the day when Ukraine will finally win the war.
Due to the growing corruption in Ukraine, despite common sense and the appeals of partners, Ukraine’s partners are increasingly raising the question: where is the money going? The answer to this question may seriously surprise and alarm. The Ukrainian economy has faced a paradoxical situation where one of the most successful and profitable sectors during the war has become the gambling business. Indeed, for several objective and subjective reasons, the gambling sector is experiencing a real boom: the number of both licenced and unlicensed operators is increasing, and advertising for their services covers every possible platform—from persistent ‘cold’ calls to ads on radio and online resources. According to the National Bank of Ukraine, the total turnover of gaming operators in 2023 amounted to 207 billion UAH. And this is only about legal players!
The social aspect of this problem is no less acute: gambling operators target particularly vulnerable groups, especially teenagers and gambling addicts. But that’s not all. The cynicism of gambling operators is evident in their active targeting of advertising in combat regions, aiming to attract servicemen to gambling.
Taking advantage of the fact that Ukrainian society, especially servicemen, are in a state of chronic stress due to the war and are trying to relieve it, gambling operators aggressively advertise to the military and civilians, drawing millions of people into gambling.
Thus, money received from international aid indirectly ends up in the pockets of gambling operators. These funds go to cover the state budget, which includes salaries for the military, pensions, and other social expenses. A significant portion of their earnings is spent by Ukrainians on gambling.
Despite appeals to the government from activists, publications in the media, and numerous dramatic stories of military personnel falling into gambling addiction, the situation remains unchanged. As justification, gambling operators cite their contributions to the budget or donations to the Armed Forces, but these sums are insignificant compared to the money they extract from Ukrainians.
This situation creates a vicious circle in which the gambling business not only continues to exist but also thrives. But who is interested in such a negatively coloured sphere? The answer is obvious: the gambling market in Ukraine, including the shadow one, thrives due to corruption. Operating with astronomical turnovers, gambling operators can lobby for their interests by financially stimulating representatives of state and law enforcement agencies. And the scale of this corruption is truly astonishing.
The latest example of corrupting state officials, which, according to sources in the Ukrainian Ministry of Finance, was discussed at a meeting between State Department representatives and officials from the Presidential Office and the Ministry of Finance, is the well-known case of Dmytro Verbytsky, who was dismissed due to suspicions of acquiring expensive real estate, and the scandal involving Prosecutor of the Prosecutor General’s Office Artem Boyarenko, who was awarded by the gambling operator Favbet for allegedly supporting licensed operators. Ukrainian representatives were told that such egregious cases are hindering aid delivery.
While Verbytsky was punished for his actions—at least removed from his post—the Boyarenko case seems to be hushed up by both the Prosecutor General’s Office and Favbet. The leadership of the Prosecutor General’s Office has not reacted in any way to the strange awarding of their employee by a gambling company. The press secretary of the company itself refused to answer journalists’ questions about whether there was an award for the prosecutor and whether the company has a practice of rewarding law enforcement officials. However, the fact that the company’s press service did not deny this information leaves room for thought.
It is worth noting that Favbet is one of the most infamous gambling operators on the Ukrainian market, which not only uses aggressive advertising of its services but also resorts to dirty methods against its competitors, such as publishing commissioned slanderous articles. In turn, scandalous cases such as the awarding of prosecutors by the company remain without proper response from law enforcement agencies. Corruption in the Prosecutor General’s Office, which is supposed to ensure legality, is becoming an increasingly obvious problem that needs urgent resolution.
Therefore, despite Minister Marchenko’s public appeal, Western partners are in no hurry to provide financial assistance to Ukraine. And this is easy to explain, as they have many quite legitimate questions about corruption in the country. One of the key issues is the cleansing of the Prosecutor General’s Office, which is supposed to ensure the rule of law. The situation with Deputy Prosecutor General Dmytro Verbytsky, who was exposed in large-scale corruption and dismissed from his post, is still fresh in memory. He is now under investigation by the National Anti-Corruption Bureau of Ukraine (NABU).
The Boyarenko case is no less scandalous. However, there has been no reaction to the situation from the law enforcement system. This cannot go unnoticed by Ukraine’s Western partners, on whom the country, suffering from war, critically depends for aid. But the longer Ukrainian state and law enforcement agencies turn a blind eye to obvious corruption, the less likely it is that the country will receive the necessary aid. The patience of international donors is not unlimited.
