The DOWNFALL of YLILAUTA - You Won't Be Missed

This is a story of how a few deceiving and greedy men exploited the idealism of a free speech-advocating Finnish imageboard founder. Transforming his once beloved platform into a relentless affiliate marketing money making machine, essentially destroying over a decade of Finnish internet history and marking the end of an era for the country's online free speech movement - at least for now.

The story spreads over a span of more than 10 years and includes several stakeholders in multiple holding companies in different countries. In order to understand the situation better, we have prepared the following flowchart to map out all parties involved and how they are connected to each other.

Ownership of companies mapped out (click to expand)

Chapter I

In 2011 V Sissonen and T Halonen, second cousins from Eastern Finland, move to Malta to play poker and run a casino, poker, and sports betting affiliate marketing site. Eventually, in 2012, the poker branch gets sold to a competitor. During summer 2013 they meet their business partner to be, J Kauppinen, who quickly shifts the site's focus only on casino affiliate marketing and SEO. Although J Kauppinen joined the company 2 years after the cousins, he is listed as one of the co-founders. Together they form Good Game Limited.

Original trio of Good Game Limited

Over the next few years, they revamp the site and start growing it organically only focusing on the casino affiliation. This growth led to an interest from Catena who was preparing for its 2016 $200 Million IPO. During the second half of 2015 Catena acquires the casino affiliate site from Good Game Limited for an undisclosed 7-figure amount.

Until this point each of the three men had owned their Good Game Limited shares as natural persons with Finnish addresses. Surprisingly, at the moment of the exit, each of them transferred their shares to a Gibraltar based holding company Cyrene Enterprises Limited. This company is registered at Suite 2B, 143 Main Street, Gibraltar.

On December 21, 2015, the shares are transferred to Cyrene Enterprises Ltd (click to expand)

A Form I Filing to the Malta Business Registry reveals that Good Game Limited was able to declare itself a single member company after Cyrene Enterprises Limited acquired 100% of its ordinary stock inter vivos. From finance perspective inter vivos refers to any gift or transfer made by someone while they’re alive. The trick here is that the receiver of the gift could be subject to local gift taxes but given the low nominal value of Good Game Limited's ordinary share it is possible they were able to transfer the ownership of the company to Gibraltar with minimal taxes.

Good Game Limited shares get transferred to Gibraltar as a gift

Gibraltar has no corporate tax for any non-resident-based companies. This means that all foreign income sourced from outside the jurisdiction is exempt from local corporate taxation. Additionally, Gibraltar does not collect taxes on capital gains and dividends.

Essentially, what this means is that Good Game Limited could be able to do business in Malta, pay profits out to the Gibraltar holding company either as a dividend or disguised as some sort of administrative expense or royalty fee in exchange for IP (even if the funds would be subject to Maltese corporate taxes, foreign shareholders could claim a refund of up to 6/7th of the tax paid, effectively reducing the tax rate to around 5%). Cyrene Enterprises Limited could then go ahead and pay out the profits as tax optimized dividends to its owners.

The reason the trio is obligated to keep their original company in Malta is the country's favorable policy on online casinos and their advertising. Additionally, Malta's EU membership is a gateway for Maltese companies to offer online gaming and marketing services throughout the European single market. This multi-billion-euro industry is heavily protected by the local government as Malta recently approved new gaming law which orders courts to refuse to recognize or enforce any foreign judgements against Malta-licensed operators active in the European market.

Chapter II

After the exit the trio takes a brief hiatus mandated by the half-year handover period clause in their contract. During this period, they start planning the launch of their next affiliate site for Finnish market and hire their first full time employee. This man carries the name T Saloranta. Towards the end of 2016 an idea of their first international affiliate site is born.

While laying down the final plans for their international site and running the other sites targeted to Finnish audience, they devise a plan that effectively serves as a gateway to promote their casino affiliate operations through one of Finland's highest-trafficked websites. This plan included exploiting the plight of the young Ylilauta founder, A Kinnunen, or more commonly knowns as "Sopsy".

Sopsy had been struggling with increasing operating costs and plummeting advertisement revenues due to the questionable publicity his site had attracted in recent years. The men behind Good Game Limited leveraged this opportunity and eventually got Sopsy to sell 68% of the site.

On 30th October 2017 Lauta Media Ltd is registered in Malta and casino ads start to roll out on the frontpage of Ylilauta. Ownership is split between Goldhill Holding Limited, Halonen Holding Limited, Reten Holding Limited, Roimisto Holding Limited, and Seven Seas Capital Limited.

Lauta Media Ltd receives its registration number on 30/10/2017 (click to expand)

Simultaneously, while the new venture was being split between these five companies, the Gibraltar based holding company of V Sissonen, T Halonen and J Kauppinen (Cyrene Enterprises Limited) activates and transfers part ownership of Good Game Limited to Goldhill Holdings Limited and Seven Seas Capital Limited, indicating that Sopsy was made a minority shareholder of Good Game Limited as part of the acquisition deal. Both of these companies are registered at Suite 2B, 143 Main Street, Gibraltar.

31/10/2017 Goldhill Holdings Limited and Seven Seas Capital Limited receive shares from Cyrene Enterprises Limited (click to expand)

Two years later the original trio decides to dissolve Cyrene Enterprises Limited and transfers the ownership back to their own holding companies. Guess where these companies are registered at? That's right, Suite 2B, 143 Main Street, Gibraltar.

Suite 2B, 143 Main Street, Gibraltar seems to be uniting all of these holding companies.

The hard drives containing some of the leaked documents related to the Gibraltar based companies got destroyed in the letter bomb attack earlier in June, so Camoradar is not able to publish documents from the local Gibraltar registry in order to prove these 5 holding companies are owned by the 5 Finnish men.

However, in July 2019 Good Game Limited submitted a resolution to delete their Memorandum and Articles of Association signed by all shareholders. This document shows that the owners of Lauta Media Ltd are the very same men from Good Game Limited.

Representatives of the holding companies displayed in the Malta Business Registry filing

Original founding five of Lauta Media Ltd

So, what is going on in Suite 2B, 143 Main Street, Gibraltar? Quick search on this entity reveals that the address belongs to Sovereign Asset Management Limited, a company mentioned in the Panama papers and responsible for managing multiple sovereign holding companies used to handle funds and foreign income generated outside the jurisdiction of Gibraltar.

Chapter III

The casino affiliate marketing kicks off well and money starts to fly in. Ylilauta continues to gain popularity at an increasing rate and over the next few years Lauta Media Ltd and Good Game Limited pass millions in dividends to their shareholders.

2021 & 2022 Lauta Media Ltd pays out over 1.7MEUR of dividends

2021 & 2022 Good Game Limited pays out over 2.4MEUR of dividends

Minor changes in the ownership structure occur in the following years as J Karhu (April Holdings) acquires a minority position in Lauta Media Ltd and T Saloranta exits the company few years later. A surprising sequence of events kicks off few years later when first J Kauppinen and V Sissonen register their shares to a Finland based limited companies in 2020, quickly followed by J Karhu doing the exact same thing in 2022.

Reason for this could be found from a major global political event which was unfolding during that exact time period. Prior to Brexit, Gibraltar, as a British Overseas Territory, enjoyed access to the EU single market, which facilitated favorable tax arrangements for holding companies. However, with Brexit, Gibraltar lost this access, leading to increased regulatory and tax complexities. The end of passporting rights and the introduction of new customs and border controls disrupted the operations of these shell companies, making it more difficult to benefit from Gibraltar's previously advantageous tax regime.

Final chapter

Over the years Sopsy keeps updating the functionality of Ylilauta every now and then, some of the updates are appreciated but most receive heavy criticism. In 2023 there is a clear change in Ylilauta's strategy and the number of questionable updates skyrockets. Sopsy begins implementing a series of unpopular changes aimed at increasing revenues. These modifications include locking numerous features behind a paywall and removing others altogether, prompting widespread dissatisfaction among the community.

These drastic measures come as the company faces scrutiny from Finnish authorities for their casino advertisements targeted to a Finnish audience, which is illegal due to Finland's governmental monopoly on gambling advertising. To anticipate a potential ban on these ads, Sopsy has not only pushed for a monthly subscription model but also started accepting a significant number of nicotine pouch advertisements.

Sopsy has come forward multiple times stating that his hands are tied as he is under intense pressure from other shareholders to maximize profits. Despite being the largest single shareholder, his influence is limited, as the other four shareholders consistently outvote him, dictating Ylilauta's direction.

Earlier this month Camoradar reported that an external entity, a Finnish online casino millionaire, had made an offer to acquire Ylilauta with a multi-million-euro valuation. These negotiations stagnated quickly as the owners started rubbing their hands together. In the light of this new information and dark clouds in the horizon, Camoradar's financial analysts would recommend for any potential buyer to drop one zero off from the initial valuation.

Goodbye Ylilauta, you won't be missed.