Ukraine Moves to Approve Amendment for Gambling Laws
The Ukrainian parliament's Committee on Financial, Tax, and Customs Policy has cleared the way for the second reading of a draft bill on legalizing and regulating gambling in the country. The approved law seeks to control both online and offline gambling activities. The move comes after gambling was banned in 2009 due to a casino fire in Dnipropetrovsk that claimed nine lives, with the government eager to revive the industry since 2015.
Firming up Reform Plans
On June 3rd, the Ukrainian government revealed that the Committee had given the green light to the new national gambling law, which now only needs a second reading. With near-unanimous support for its implementation, the reform continues to gather pace. Since the first reading in January, the legislation has seen substantial modifications.
The draft bill, under code 2285-D, was initially proposed by Oleg Marusyak, Chairman of the Parliamentary Committee on Finance, Tax, and Customs Policy, in 2019. It was later turned down in December 2019 and received its first reading in January 2020. However, some committee members expressed dissatisfaction with the amendments made since then, causing some of them to walk out early in protest.
Criticism and Changes
Marusyak presented the bill as one of six reform proposals presented to parliament by the ruling party, "Servants of the People," in October 2019. The initial version of the bill included limiting the number of land-based gaming machines to 40,000 but later removed this cap. The original stipulation that slot machines should not be set up within 500 meters of schools was also dropped. Slot machines are now allowed in three- and four-star hotels besides the originally planned five-star hotels.
Cloudy Waters on License Fees
The license fees remain ambiguous. The revised draft bill suggests a license fee of €222,800 for online gambling. The licensing fees for casinos in hotels with 200-250 rooms are €1.3 million, while casinos with 250 or more rooms are required to pay at least €2 million. The fees are tied to minimum wages to account for inflation.
Bookmaker licenses will be awarded based on a formula where each licensee can operate five betting shops, with licenses allocated by region. Kiev will receive 32 licenses, while Odes and Kharkov will share 16, and 32 more will be given to the rest of the country.
Taxing Conundrum
If the bill passes after the second reading, parliament will have to pass another law determining the taxation system for the gaming industry. There are currently four gambling tax bills under consideration. A proposal from Marusyak and Marian Zablotskyi sets the tax rate for all games of chance and lotteries at 25% of your gross gaming revenue.
An additional tax plan, from Dmytro Natalukha, proposes a gambling tax rate of 7.5% for bookmakers, 12.5% for online gambling, and 22% for lotteries. Another alternative by Oleksandr Dubinsky includes a flat tax rate of 25% for all types of gambling. Lastly, a plan presented by politician Artem Dubnov aims to eliminate specific gambling taxes and rely solely on license fees and regular business and income taxes.
Suppressing the Black Market
Curbing illegal gambling is one of the main objectives of the Ukrainian government in regulating the industry. President Volodymyr Zelensky has been determined to enforce Ukraine's anti-gambling laws and has taken action against unlicensed online gambling sites. In February and May, courts blocked over 90 unlicensed domains. However, the Ukrainian Association of Telecommunications Operators (Telas) and the Internet Association of Ukraine appealed, requesting the removal of these blocking orders. The Digital Transformation Committee suggested removing the orders from the new draft law.
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Source: www.onlinecasinosdeutschland.com
