The Olimp case is a criminal case initiated in 2019 by the National Security Committee of Kazakhstan against the bookmaker companies OLIMP KZ, Alpha-bet and Onlybet on charges of illegal gambling, tax evasion, property legalization and participation in a criminal group.
The case arose two weeks after the all-Kazakhstan press conference held by Olimp as the leader of the Association of Bookmakers of Kazakhstan, during which Olimp publicly accused the officials of the relevant ministry of creating (for the benefit of their own business interests) a private monopolya single betting operator named "Betting Accounting Center".
Following Olimp, criminal cases were also brought against other bookmakers in Kazakhstan: Profit Betting, StavkaBet, and PariMatch.kz, Finbet, Triumph, and Favorit have faced criminal proceedings since 2020.
After Olimp's liquidation through criminal cases, the private monopoly "Betting Accounting Center", against whose creation Olimp had fought for about two years, was legalized in just a few months. In 2021, Saken Mussaibekov, Vice Minister of Tourism and Sports of Kazakhstan, was held criminally liable for a bribe from the "Betting Accounting Center".
The charges brought against Olimp were refuted by the experts' opinions of (including PricewaterhouseCoopers), the Business Ombudsman of Kazakhstan, the results of non-public investigative actions, testimony of numerous witnesses and other case materials. The imputed taxes were additionally assessed on activities recognized as illegal gambling, while taxation of illegal activities is inadmissible.
Nevertheless, as a result of the Olimp case, company employees (including women who had minor children or even infants) were sentenced to various prison terms.
Without waiting for a trial, all property belonging to the alleged persons in the case was confiscated and turned over to the state, which meant that they were found guilty of all charges, in violation of the presumption of innocence.
In March 2024, relatives of those convicted made an open video appeal to the President of Kazakhstan Kasym-Jomart Tokayev with a request to review the Olimp case, which appeared in the times of "Old Kazakhstan", and to instruct law enforcers to stop ignoring the violations committed.
Background of criminal prosecution Olimp had been operating in Kazakhstan since 2007 and was the largest bookmaker company in the country. In the summer of 2018, Kazakhstan's Ministry of Tourism and Sports, led by now-convicted Arystanbek Mukhamediuly and Saken Mussaibekov, decided to create a monopoly betting operator in Kazakhstan. The Government of Kazakhstan, the Ministry of National Economy, and other organizations did not approve such an initiative but lobbying to create a monopoly betting operator continued.
In 2019, a new amendment to the Law "On Gambling Business" was initiated, providing for the creation of a monopoly betting operator called "Betting Accounting Center"a private organization with a private owner. The amendment stipulated that bookmakers' offices in Kazakhstan were obliged to conduct all their betting through a server of the private monopolist "Betting Accounting Center", which, in turn, was granted the right to charge bookmakers a commission at its discretion. Accordingly, the private owner of the "Betting Accounting Center" was to According to mass media calculations, the private monopoly "Betting Accounting Center" was to earn between and (2025 billion Kazakhstani tenge) per year by receiving 4% commission for each bet in the country.
In October 2019, Olimp and other Kazakhstan bookmakers from the Association of Bookmakers of Kazakhstan held a Kazakhstan-wide press conference where they publicly made accusations that the "Betting Accounting Center" was being created to serve someone else's business interests.
Two weeks after the press conference, a criminal case was brought against Olimp, after which the special operations forces of the National Security Committee of Kazakhstan (NSC), then headed by the now-convicted Karim Massimov and Daulet Yergozhin, stormed Olimp's office. The NSC did everything to stop Olimp's operation immediately: it ripped out the server, paralyzed the office, put the usual employees face down on the floor, seized bank accounts, and finally suspended the bookmaker's license.
After the liquidation of Olimp through criminal cases, the officials' plans were quickly implemented - the private monopoly "Betting Accounting Center", against the creation of which Olimp fought for about two years, was legalized in just a few months.
Alleged offences
Illegal gambling business The grounds for the appearance of NSC special operations forces in Olimp's office were a criminal case of illegal gambling under Article 307 of the Criminal Code of Kazakhstan, initiated by the regional office of the NSC in Almaty, which at that time was headed by the now convicted Nurlan Mazhilov.
The criminal case was initiated immediately on the qualifying features of especially large size as part of a criminal group (part 3, subparagraphs 1,2, Article 307 of the Criminal Code of Kazakhstan), while on the day of initiation of the criminal case, there was no evidence of both especially large damage and a criminal group.
In addition, the initiation of this criminal case by the National Security Committee violated the rules of jurisdiction in Kazakh law: cases of illegal gambling fall within the competence of economic investigation authorities, not the NSC, and the consent of the prosecutor's office for the NSC to pursue the case was obtained only after the case had been initiated.According to Part 3-1, Article 187 of the Criminal Procedural Code of Kazakhstan, the initiation of cases under Article 307 of the Criminal Code falls within the competence of the Economic Investigation Service, not the NSC.
The NSC classified the BetGames products, which legally operated in many countries worldwide, as illegal gambling and called them "online casinos" during the investigation; in fact, they were live broadcasts of gambling events conducted by the Zaidimai company in Europe and did not belong to online casinos.
Olimp, like other bookmakers in Kazakhstan, had openly been working with Betgames for many years. The acceptance of bets on the results of Betgames events was no different from that on the results of world sporting events, and took place publicly through tax-registered cash desks and Olimp's website on the Internet. Over the many years of use, Betgames had never received any complaints about the product.
However, the NSC suddenly labeled this activity as online casino and outlawed it.
Tax evasion In a criminal case involving illegal gambling, the NSC additionally ordered a tax audit. In the acts on the tax audit results, Nurlan Kozhageldiyev, a tax inspector of the Almaty Internal Revenue Department, indicated that Olimp was engaged in illegal gambling business in the form of BetGames online casino, and then additionally charged over 90 billion tenge of "gambling tax" and "individual income tax at source" (income tax of Olimp's clients, for whom Olimp was required to remit this tax to the budget) for these illegal activities.
At the same time, according to the opinion of the same tax inspector, Nurlan Kozhageldiyev, the illegal gambling business is not subject to taxation. Nevertheless, this did not stop him from imposing additional taxes.
Nevertheless, tax inspector Nurlan Kozhageldiyev excluded from the tax audit all of Olimp's accounting documents for a 5-year period that confirmed cash payments to customers made at Olimp's cash offices operating in all regions of Kazakhstan.
Olimp's primary accounting documents seized during the search, which tax inspector Nurlan Kozhageldiyev personally participated in seizing, were also not taken into account during the audit and were returned as "No investigative interest".
These actions of the tax inspector led to the fact that according to the acts of tax audit the amount of cash paid to clients for 5 years amounted to 0 tenge.
The exclusion of cash paid to clients, which was the company's expense, increased Olimp's revenue share to 80% of turnover, whereas, according to Dentons' international research, bookmaker offices in Kazakhstan earn 5-15% of turnover.
All cash that Olimp delivered from Almaty over a 5-year period to its more than 300 cash offices in all regions of Kazakhstan, which was then paid out to Olimp's clients, was referred to by the NSC as "cash taken abroad", in complete disregard of the numerous identical testimonies of different Olimp's employees among the regional cashiers.
As a result, the NSC initiated a new criminal case against Olimp for tax evasion under Article 245 of the Criminal Code of Kazakhstan.
PricewaterhouseCoopers, the Business Ombudsman of Kazakhstan, as well as leading Kazakhstan tax experts 4142 confirmed the illegality of both the additional taxes and accusations of non-payment of taxes. In the opinions of these persons, the fact of unjustified additional taxation of BetGames activity, declared as illegal gambling business, was fixed, in connection with which the charges in non-payment of taxes under Article 245 of the Criminal Code of Kazakhstan were marked as overly imputed. The additional taxation of the illegal gambling business is equivalent, for example, to the taxation of the activity of selling drugs.
License suspension The NSC also initiated additional proceedings to suspend Olimp's license because Olimp lacked a server in Kazakhstan. The investigation recognized the server in Olimp's office as not real.
On November 29, 2019, the Specialized Interdistrict Administrative Court of Almaty issued a ruling to suspend Olimp's license.
The investigation and the court ignored both the fact that the server had been fiscalized in accordance with Kazakh legislation and that the control rate for this server had actually been received. In addition, the same server had already been checked in 2016 by an IT specialist engaged by the tax authority, who confirmed its authenticity, its existence in Kazakhstan and the relevance of the data it contained.
Although the administrative court's decision was subject to appeal to the appellate instance and had not yet entered into legal force, the judge, on the day of its issuance, marked it as having entered into force. With the help of complaints against the judge's actions, Olimp's advocates managed to get the illegal marking of the entry into force removed.
In 2021, during the trial of the defendants in the Olimp case, the forgery of the opinion stating that Olimp did not have a server in Kazakhstan was revealed: two versions of the opinion with different content were found. The court ignored this fact.
Procedural history
First instance The trial of the defendants in the Olimp's case began in 2021, during which Nurlan Kozhageldiyev, a tax inspector of the Almaty State Revenue Department, confirmed that he had failed to separate the turnovers of BetGames products recognized as illegal gambling from the total turnover of Olimp and made an additional charge of over 90 billion tenge in taxes on BetGames' activities.
When asked by the defense about the reasons for failure to separate the turnover of BetGames, the tax inspector Nurlan Kozhageldiyev replied that the turnover of BetGames allegedly did not affect the calculation of taxes, which forced the defense to declare a contradiction by reading the opinion of the same tax inspector on the inadmissibility of taxation of illegal gambling business.
The court ignored this contradiction.