Ukraine unveils legislation for gambling overhaul
The Ukrainian parliament has shared a full-fledged draft law on legalizing gambling, including regulations for the online gambling sector. Not too long ago, Ukrainian President Volodymyr Zelensky chipped in favor of permitting gambling in luxury hotels. What could await gamers and service providers in the Ukrainian market?
Online casinos, sports betting, and poker
The Ukrainian gambling sector's liberalization continues to advance. While the country's administration declared in September that gambling in Ukraine would only occur "exclusively on the territory of hotels," a current amendment to the law now permits online casinos, online sports betting, and online poker. This draft also suggests regulated retail gambling, which greatly surpasses the government's initial intentions.
The law specifies that Ukraine will initially award ten licenses for online casinos, ten licenses for online sports betting, and five licenses for online poker. The government also intends to distribute a total of 80 bookmaker licenses for the retail sector, allowing for the establishment of betting shops at ten locations each. Subject to specific conditions, twenty casino licenses will also be granted to specified five-star hotels. To operate gambling, they must have at the very least 200 rooms in Kiev. In smaller cities like Odessa, Kharkov, Dnipro, and Lviv, at least 120 rooms are needed.
Slot machines will also be allowed in set gaming arcades, provided they are not located near schools, churches, hospitals, residential complexes, and public buildings. The government intends to limit the total number of slot machines in the country to 40,000, with a maximum of 250 machines per location.
License fees and taxes
All licensees will also be subject to various financial requirements. Firstly, applicants must possess an equity contribution equal to at least 1.09 million euros. Secondly, license fees are determined through an annual auction; these amount to no less than EUR 1.3 million per year for the Kiev site. The fees for online licenses and land-based casino licenses outside of Kiev are also determined by auction and start at approximately EUR 920,000 per year.
To keep pace with inflation, all license fees will also be adjusted according to the country's minimum wage. According to recent news reports, the additional income will be channeled into the nation's "fund for supporting medicine, sport, and culture."
In contrast to the license specifications, the draft does not yet reveal any information about how operators' earnings will be taxed. Meanwhile, Ukrainian economic experts are anticipating a 20% tax on gross gambling revenue. This is derived from wagers minus all payments made to winners. It remains to be seen if this will actually transpire.
Gambling authority in the works
In contradiction to previous announcements, the amendment to the law also proposes the creation of a gambling regulatory authority referred to as the Commission for the Development and Regulation of Gambling. This will be a seven-member body that is to report to the country's cabinet of ministers. The primary responsibility of the new body is to ensure compliance with licensing conditions, but any decisions made by the authority must be approved in advance by the government cabinet.
The Commission is also expected to impose sanctions on providers who violate the license terms. Additionally, a self-exclusion register and a list of dubious companies are anticipated. The goal of these measures is to "ensure a level playing field in the gambling sector." The gambling sector will be backed by yearly reports on the Commission's work.
To ensure optimum security for both gamblers and providers, a unique online monitoring system is to be set up. Based on "Ukrayinska Pravda" media reports, this system would record all player information, including bets, deposits, and winnings. In case of any inconsistencies, the law permits authorities to execute planned and unplanned inspections of companies and gaming devices. Illegal providers face prison sentences of up to five years.
The Ukrainian market in transition
Ukrainian President Volodymyr Zelensky (from the "Sluha narodu" party, or "Servant of the People") voiced support for legalizing gambling in hotels in mid-October. According to Zelensky, this would serve as the "initial stage in regulation." At a press conference, the head of state introduced a preliminary draft law in this regard, which initially only permitted gambling on hotel premises and the usage of gaming devices equipped with software that meets international standards.
At that point, Zelensky concurred with Prime Minister Alexei Goncharuk's assessment that the law should primarily target curbing illegal street gambling machines. Zelensky opined that the law could also significantly reduce problem gamblers. During a meeting with all party leaders back in September, Zelensky called for legislation to pass regulating gambling after the parliamentary elections in July.
In 2009, Ukraine outlawed all gambling games except for state-run lotteries. This decision came after a tragic incident where nine individuals died in a fire at a casino in Dnipropetrovsk, a city in eastern Ukraine. The Ukrainian government has been aiming to reintroduce legal gambling since 2015. Initially, they had plans to make gambling legal by 2018, which they announced during April 2017. But with geopolitical challenges that emerged globally, they could only implement these measures now.
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Source: www.onlinecasinosdeutschland.com
