The bookmakers that almost wangled anti-coronavirus support

The Bell

One of the measures to help the economy during Russia’s epidemic is state support for systemically important companies. A list of the firms with this designation was published last week and included Fonbet, the largest and the oldest bookmaker in Russia. The Bell has looked at Fonbet’s links to some of the biggest gangsters of the 1990s.

  • It is not entirely clear how Fonbet got on the list. According to one theory, the reason was technical: only revenue, employee numbers and tax payments were taken into account by those drawing up the list. However, market players told The Bell that Fonbet had used its connections to get on the list. Eventually, the Ministry of Finance protested and Fonbet also asked to be removed from the list. The company was excluded from an updated list published Tuesday.
  • Set-up in the 1990s, Fonbet was the first bookmaker to accept bets during matches, which quickly made it a market leader. In 2013, a criminal case was opened against the company over illegal online betting and its offices were searched by law enforcement officers, who broke down the doors and used smoke grenades.
  • The company’s shareholder structure changed in 2013, and again in 2017 when 66 percent of Fonbet was transferred to a mysterious offshore company in Cyprus. After this, the bookmaker flourished with its revenue more than doubling the following year.
  • It’s unclear who controls Fonbet, but we do know some of the minority shareholders. They include former State Duma deputy Stanislav Magomedov, who also owns a bath house complex on Rublyovka. One of Magomedov’s partners is the son of Sergei Lalakin, nicknamed Luchok (‘a little onion’), a high-profile participant in the criminal wars of the 1990s. Lalakin was thought to be the head of Podolsk criminal syndicate (formerly one of the most powerful criminal gangs in the country).
  • Another of the minority shareholders is Sergei Tetruashvili. Little is known about him, but his brother David was a well-known entrepreneur in the 2000s. David Tetruashvili founded perfume chain Brocard, which supplied Arbat-Prestige, a large cosmetics retailer. Arbat-Prestige is linked to Semyon Mogilevich, reputed to be Russia’s most notorious mafia boss and one of the FBI’s most wanted people.

Why the world should care

One could see the story of Fonbet inclusion on Russia’s list of systemically important companies as a symbol of the return of the 1990s amid the coronavirus crisis. As the economic situation worsens, we may see more and more names from this period.

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