Ukraine Enacts Gambling Regulation
Following a month-long regulatory sessions, Ukrainian President Volodymyr Zelensky (age 42) has endorsed the nation's latest gambling legislation. This newly implemented measure permits online gambling and encompasses land-based casinos. In addition, high licensing fees have been implemented, with Eastern European operator Parimatch as a prime competitor within the sector. One key question in mind, though, is the taxation aspect.
Ukrainian Gambling Reborn
The Ukrainian President's recent action paves a way for online casinos, as well as land-based gaming sites. The landmark Occasion 2285-D decree got a green light in parliament last July, with 248 of the MPs strongly endorsing the statute and only 95 rejecting it.
This move symbolizes a major shift in Ukrainian gambling, considering that the gaming was completely banned in the country since 2009 due to an accidental fire in a casino in Dnipropetrovsk that caused nine fatalities. Ukraine has unceasingly tried to reintroduce gambling since 2015, but previously encountered obstacles due to political tensions.
Since the initial presentation of the gambling reform bill in November 2019, Ukraine has embarked on a path to enact a series of amendments. The dispensed draft contains provisions related to online gambling, sports betting, gambling halls and land-based casinos (to be confined inside hotels).
Ukraine aims to leverage a Eurocentric and up-to-date approach towards its gambling market, particularly by embracing the advancements of the internet. The prior draft law restricted the offering of gambling-related services online and prevented the use of marketing for associated companies, but these stipulations were omitted by the Committee on Finance, Taxation, and Customs Policy.
License Fees Tabled
According to the latest released version of the bill, the crippling licensing fees have been ascertained as well. Licensing fees for online gambling are set to amount to a considerable €1 million, while licenses for sports betting total to an impressive €2.1 million. The licenses can be renewed after 5 years, and renewal demands the same fee. Poker licenses, on the other hand, are pegged at just around €730,000, while casino licenses in Kiev-based hotels are worth a hefty €3.7 million. However, fees will triple until a surveillance system is in place within 30 months of the industry's commencement.
The draft law also includes several resrictions for licensees. Russian nationals or citizens are barred from acting as shareholders or Ultimate Beneficial Owners (UBOs). As mentioned in recent domestic media reports, only legal entities with Ukrainian registrations are deemed eligible for an operating license.
Parimatch: The Legitimate Hope
Parimatch, a prominent Eastern European operator, has been expressing its willingness to apply for a license in Ukraine for some time. The company could become the first online gambling licensee in this region, which has never had one before. Parimatch's CEO, Sergey Portnov, commended President Zelensky for upholding his promise to legalize betting in Ukraine. The corporation supports Zelensky's liberalization agenda and supports efforts for player-safety measures, such as the 21-year age limit. He deemed the regulated betting industry as beneficial to the local and national economy.
Ukraine's Taxation Approach
Zelensky has long endorsed legalized gambling in Ukraine, with his proposition for allowing it within hotels stirring up debates. However, MP Oleg Marusyak, who authored the finalized statute, suggested a tax formula: 5% for sports betting, 10% for online gambling, and 12.5% for lotteries and slot machines.
But, the final legislation has yet to be disclosed, as three other tax options are up for comparison. Another aforementioned alternative offers a 25% rate for all gambling games and lotteries, while a third model offers: 7.5% for bookmakers, 12.5% for online games, and 22% for lotteries. Employing Artem Dubnov's model would fully eradicate specific gambling taxes. The government would solely benefit from the industry via licensing fees and regular tax collection processes.
A Fair Tax System is Crucial
Sergey Portnov, Parimatch's CEO, underscored the need for a fair tax system to maintain the stability and growth of the Ukrainian gambling sector. The company is thrilled at the prospect of contributing to the country's economy through the development of the technology industry.
Though a more equitable tax policy is crucial to capitalizing on these benefits in the long run, this is simply how we remain competitive in the European marketplace. Consequently, our company is urging for prompt action from the government. We're keeping a close eye on any future advancements for now.
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Source: www.onlinecasinosdeutschland.com