Gambling Business Regulation in Ukraine: General Provisions of the Bill
The bill on gambling business legalization was submitted to the Verkhovna Rada of Ukraine in October 2019. Dmytro Razumkov, Chairman of the Ukrainian Parliament, expressed his hope that MPs would start considering documents related to gambling businesses in the first reading by the end of 2019. According to different experts, the corresponding law could be adopted later in the year or in early 2020.
The article describes in detail how Ukraine is going to regulate gambling businesses.
What types of gambling activity will be legalized?
Relying on the bill No. 2285, Ukraine offers to permit the organization and holding of offline and online gambling games. The following types of gambling venues will be able to operate legally:
- land-based casinos;
- online casinos;
- land-based betting shops;
- online betting shops;
- slot machine halls;
- land-based poker clubs;
- virtual poker clubs.
Only persons who have reached 18 years of age will be able to play games of chance legally. By the way, gambling entertainments won’t be available to disabled visitors and gamblers submitting an application for gambling self-restriction.
Besides minors, gambling will be forbidden to people who can know the game results or can affect its outcome. Founders and CEOs of gambling companies and their representatives are not allowed to bet in their own venues. Athletes are not allowed to place bets on competitions where they are involved. This restriction is applicable to government officials working in the sports sector.
How will gambling activities be regulated?
The draft law stipulates the requirements for gambling organizers. Moreover, it specifies what platforms can hold gambling entertainments, what amount of venues will be established, how much gambling licenses will cost, what principles gambling company owners should adhere to, etc. Let’s examine the general provisions of the bill.
Key requirements for casino and betting shop establishment
The bill states that one will be able to establish casinos in five-star hotels consisting of at least 200 rooms in Kyiv and not less than 150 rooms in other cities.
The minimum gambling area should be 500 square meters.
The authorities suggest issuing 20 licenses for setting up casinos in 5-star hotels.
Currently, Ukraine has over 60 operating five-star hotels. They are located in Kyiv, Odesa, Kharkiv, Lviv, and other cities. Casinos can be potentially placed in the following popular hotels:
- Fairmont Grand Hotel;
- Hyatt Regency;
- Premier Palace Hotel;
- InterContinental Kyiv;
- Hilton Kyiv;
- Kharkiv Palace Hotel, etc.
The law provides that Ukraine will issue 10 licenses for the online betting organization. The total number of documents permitting the establishment of land-based betting shops is 80. Moreover, one is planning to grant no more than 32 licenses in Kyiv, no more than 16 in Odesa, Kharkiv, Dnipro, and Lviv, and 32 in other cities. Thus, the country aims to organize the operation of 800 betting shops.
Entrepreneurs acting under the license for offline/online casino or betting shop operations should have an effective bank guarantee or a deposit amounting to 7200+ minimum national living wages.
Where will slot machine halls be able to function?
According to the bill, slot machine halls will be permitted in three-, four-, and five-star hotels with 200+ rooms. As to the other cities, such platforms will be allowed in three-, four-, and five-star hotels with 150+ rooms.
The number of slot machines will depend on the population of certain cities. No more than one unit of equipment should account for every 1000 people. At the same time, the overall amount of slot machines across the country should not exceed 40,000.
Nowadays, three- and four-star hotels operate in different Ukrainian cities. The well-known ones include:
- Ramada Encore Kyiv;
- Ukraine Hotel;
- Mir Hotel;
- Ibis, etc.
One expects to issue 160 licenses for slot machine halls: 60 gambling permissions in Kyiv, 40 in Odesa, Kharkiv, Dnipro, and Lviv, and 60 in other cities.
To conduct gambling activities in slot machine halls, business owners require a bank guarantee or a deposit amounting to 200+ minimum national living wages.
What kinds of lotteries will be permitted? How many poker clubs will operate?
The bill prescribes that Ukraine will allow state lotteries. One will be able to organize instant, draw, and combined lotteries on legal grounds. The game prize pool should be at least 50% of the sum of returns generated by all bets.
To organize games of chance, lottery operators need a bank guarantee or a deposit amounting to 100,000 minimum national living wages.
The Government is going to issue five licenses for offline poker club activities and five online poker certificates. Owners of land-based venues will be able to conduct poker tournaments once in six months. They are obliged to inform the authorized body of the start and completion of competitions.
How much will the license cost?
The bill stipulates that it is possible to organize and hold gambling games only when the license is available. Corresponding documents are given individually for each type of gambling activity. Furthermore, gambling business owners require licenses for gambling tables, betting equipment, and slot machines.
The annual payment for a license is determined due to the e-auction outcome. The sum is divided into four equal parts and paid quarterly.
Minimum payments for license documents:
- 18,700 monthly minimum wages for Kyiv-based casinos;
- 12,400 monthly minimum wages for casinos in other cities;
- 12,400 monthly minimum wages for the right to carry out the online betting activity;
- 375 monthly minimum wages for land-based betting shops;
- 3750 monthly minimum wages for a slot machine hall;
- 625 monthly minimum wages for online and offline poker club operations.
The annual charge for equipment:
- 15 monthly minimum wages for every gaming machine, betting terminal, and b etting machine;
- 730 and 375 monthly minimum wages for a gambling table with and without roulette.
License granting money will go to the Foundation for healthcare, sports, and culture support. Funds will be spent on new hospitals, rehabilitation centers, and hospices, as well as on health protection programs, athlete support, development of Olympic and non-Olympic sports, new libraries, theaters, museums, culture projects, and so on.
Gambling control: major principles
The Government of Ukraine is supposed to create a new authorized body: the Committee on the development and regulation of gambling. It will supervise the organization and holding of gambling entertainments at the state level using various inspections.
The committee will also be responsible for issuing gambling licenses, considering complaints of gamblers and bettors, registering gambling organizers, setting the requirements to combat gambling addiction, etc.
Gambling company operations will be controlled by the online monitoring system. All gambling organizers will have to integrate their software with this system. It will allow tracking money turnovers of gambling operators and controlling money transferred to the budget and public target funds.
Adoption of the responsible gambling concept
The bill mentions the introduction of the responsible gambling concept. This term means a range of measures intended to fight against problem gambling and prevent this addiction.
To protect gamblers from gambling addiction, the law stipulates the following rules:
- introduction of obligatory identification of gambling venue customers;
- gambling prohibition for individuals who have voluntarily decided to use the self-restriction right;
- publication of information about age limits, responsible gambling principles, and places helping gambling addicts in gambling venues;
- informing clients of anti-gambling addiction organizations and health facilities, etc.
Financial liability for law violation
The bill stresses that lawbreakers will face a penalty. The liability attaches to individuals who run gambling businesses without necessary licenses, conduct games of chance beyond gambling clubs, illegally upgrade gaming equipment, and let minors in gambling rooms. Non-tested and non-certified equipment can also result in the penalty.
The bill will be discussed in detail at Ukrainian Gaming Week 2020 to be held on March 11-12.