Gambling Business Legalization in Ukraine: General Provisions of the Bill

On October 17, 2019, the bill on gambling activity legalization in the country prepared by the decree of President of Ukraine Volodymyr Zelenskyy was submitted to the Verkhovna Rada. On October 23, it was directed to committees and transferred for review on October 24. The text is available on the official portal of the Ukrainian Parliament.

Well, what kinds of gambling businesses will be officially permitted? How much do licenses cost?

What types of activity
are subject to legalization?

Initially, President Volodymyr Zelenskyy unveiled plans for legalizing land-based casinos located in five-star hotels. However, the bill covers many more types of gambling activities that should be licensed in the territory of Ukraine. According to the document, both offline and online gambling venues will be allowed. Legal gambling businesses include the following:

• land-based casinos;
• online casinos;
• betting shops;
• online betting shops;
• slot machine halls;
• lotteries;
• games of chance in poker clubs;
• online poker.

Any other kinds of gambling within Ukraine are prohibited. Besides, the bill states that games involving both bets and winning, fully or partially depending on the chance, are considered gambling.

What bodies will be
in charge of monitoring?

The special committee on the development and regulation of gambling (an authorized body) will control the fulfillment of statutory provisions at the state level. It is directly subordinated to the Cabinet of Ministers of Ukraine that will assign tasks and make appointments.

The committee consists of six members and the chief. Their term of office is four years. Moreover, none of them can be owners of gambling businesses or producers of specialized equipment whose activity depends on the regulator’s decisions. In layman's terms, they are not allowed to issue licenses to themselves.

What will the authorized body focus on?

• drawing up gambling statutory acts;
• licensing and checking companies for compliance with the requirements;
• developing rules of licensing certain types of gambling activities;
• inspecting reporting of gambling companies;
• controlling gambling venue operations, running inspections;
• imposing sanctions on violators of law or license conditions;
• administrating online monitoring systems.

According to the law, scheduled checks of gambling businesses should be conducted once every three years at the pre-planned date. Off-schedule control is also permitted: it can be performed on the resolution of the committee (it can be caused by complaints, reporting document troubles, lawbreaking).

How to obtain a license for different
kinds of gambling businesses

Only legal entities registering in the territory of Ukraine can become gambling organizers. The charter capital at the time of submitting an application should be at least 30 million UAH. Furthermore, legal entities have to confirm revenue sources.

To get a license, one should provide the committee on the development and regulation of gambling with a range of documents:

• an application specifying organizers’ data, bank account details, the size of the charter capital, brand and domain names;
• copies of constituent documents;
• abstracts from trade, court, and bank registries;
• the report on capital formation and origin;
• the deed of premises ownership (in case of land-based casinos).

Entrepreneurs are obliged to comply with the statutory provisions and adhere to the responsible gambling rules, in particular, to combat ludomania and prevent minors from participation in games of chance.

Cost of land-based casino licenses

Casino owners will have to pay for a gambling organization and holding license as well as each license for individual gaming tables and slot machines. Money is paid once per year. The sum will vary depending on the venue’s location:

• 9000 minimum national living wages (Kyiv);
• 6000 minimum national living wages (Odesa, Kharkiv, Dnipro, and Lviv);
• 3000 minimum national living wages in other cities.

Gaming tables with and without roulette are paid individually (350 and 180 minimum national living wages). Licenses are issued for five years, and all the funds go into the State Budget of Ukraine. If gambling permission is canceled, money is not refunded.

Betting activity and online casinos

A license for these types of activities is issued for five years as well. Payment is performed once in a year, amounting to 6000 minimum national living wages. The annual charge for a land-based betting shop is defined based on the e-auction results. The initial price is 180 minimum national living wages. The statutory sum is equally divided into quarters.

A betting slot license is paid separately: 7 minimum national living wages.

Licensing of slot machine
halls and poker rooms

A five-year license for slot machine hall operations is determined based on the e-auction results, at least 180 minimum national living wages. One should also pay the annual sum amounting to 7 minimum national living wages for a single slot machine.

A license for slot machines connected to the online monitoring system costs 14 minimum national living wages per year for one piece of equipment. This payment is equally divided into quarters.

A license for holding games of chance in poker clubs and organizing online poker tournaments will cost 300 minimum national living wages. It is also paid quarterly.

License auction holding

The majority of gambling licenses will be issued based on the e-action results. Its terms are set up by the committee on the development and regulation of gambling. Minimum e-auction sums for each kind of gambling activities are specified in the law.

Both Ukrainian companies and non-resident organizations (but acting on behalf of the country’s residents) are allowed to participate in this auction. To take part in the e-action, one should pay an obligatory guarantee fee individually defined by the committee.

Protection from ludomania
and player register

In all countries permitting the gambling activity, casinos are obliged to comply with the responsible gambling rules. The corresponding paragraphs are prescribed in the bill on gambling legalization in Ukraine.

Responsible gambling principles imply that entrepreneurs should identify all players and necessarily check their age. Games of chance are forbidden to minors and persons submitting an application for self-restriction.

Gambling venues should place materials with information about pathologic gambling addiction (ludomania) and addresses of facilities providing professional assistance. Necessary data should be printed or published on the website (in case of online casinos).

There will be self-restriction rules for people suffering from ludomania. The same rules exist, for instance, in the Republic of Belarus. Gambling addicts can submit the first-person application to the regulation committee or any casino. It should contain your passport data and duration of abandoning the attendance of gambling venues.

The authorized body is in charge of the list of similar individuals, while casinos are obliged not to provide services to those submitting self-restriction applications.

Rules of software and
hardware certification

Not only have all gambling business organizers to obtain a license, but they also have to certify their own equipment or software in case of the online segment. The gambling regulation commission will determine independent companies issuing such certificates.

One is allowed to use the following hardware and software:

• connected to the online monitoring system;
• completing certification according to the international standards;
• adhering to technical documents.

It is prohibited to upgrade slot machines in your sole discretion and to integrate them with additional elements unauthorized by the developer. Each machine should have a serial number, repair data, and manufacturer name.

The end date of current
gambling operations

The law will become effective since its adoption. Companies engaged in lottery operations are obliged to stop accepting bets and pay all the debts to players until January 1, 2020. Afterwards, these organizations will be relicensed in accordance with the new rules.

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You will be able to discover more about the development of the gambling sector in Ukraine at Ukrainian Gaming Week 2020 to be held on April 15-16 in Kyiv. The event will introduce gambling equipment and software by leading manufacturers, while industry experts will make their presentations.

Event program details can be found here ►►►