A Year After Legalization: Successful Events in the Gambling Industry

The past year has been extremely important for the gambling industry. 12 years after the introduction of a complete ban on gambling, the companies have finally become able to legally carry out their activities again.

What legal acts were adopted to regulate their work, how many licenses were issued per year, and how much did the state budget of Ukraine received due to payments from gambling operators? Read more in the article.

About the legal operators

On February 2, 2021, the Ukrainian gambling regulator represented by the Commission for Regulation of Gambling and Lotteries (CRGL) decided to issue the first license giving the right to open an online casino. It was received by the Spaceix LLC, which owns Cosmolot brand. This decision has become a powerful incentive for the emergence of new legal operators and the successful development of the Ukrainian gambling market.

In total, 28 brands received permission from the regulator last year.

According to CRGL, last year the licenses were distributed as follows.

The website of data monitoring service Opendatabot states that there are 8 legal land-based casinos operating in Ukraine: 4 in Kyiv and others in Odesa, Lviv, Kharkiv and Poltava.

As for the slot machine halls, the capital also number one in terms of quantity – 10 establishments in total. In the regions, Lviv became the leader, where there are 6 halls, Kharkiv and Odesa shared the second place – 4 halls each. Next comes Mykolaiv – 3 halls, Zaporhizzhia, Kremenchuk, Kryvyi Rih, Kropyvnytskyi, Sumy – 2 halls each. Other Ukrainian cities (Bila Tserkva, Brovary, Vinnytsia, Zhytomyr, Kamianske, Lutsk, Melitopol, Petropavlivska Borshchahivka, Poltava, Rivne, Sofiivska Borshchahivka, Khmelnytskyi, Chernivtsi) – one each.

Of course, such amount of sold licenses brought a significant profit to the state budget. The total income amounted to more than 1.5 billion UAH.

CRGL achievements in 2021

In addition to licensing, the regulator was busy with other issues: the development of regulations, state control over gambling and betting operators, and audit.

One of the important achievements is the creation of the Register of persons who have limited access to gambling establishments and/or participation in gambling activities of legal operators by adding them to the list at their own request, on the initiative of relatives or by a court decision. As of January 1, 2022, 195 persons were included in the register.

In 2021, the following legal acts of CRGL came into force:

• On the approval of the List of gaming equipment subject to certification.
• On the definition of the List of subjects of certification that can conduct certification of gambling equipment.
• On the approval of Responsible gaming principles.
• On the approval of the Procedure for sending and fulfilling the requirements for restricting access on (from) the territory of Ukraine to the website or part of it.
• On the approval of the Description of player identification card.
• On the approval of a unified form of the act drawn up on the basis of the results of scheduled and unscheduled state supervision.
• On the approval of the plan for control and inspections of operators for 2022.

Also, the authority issued permits that confirm the compliance of the premises with the requirements for placement of gambling establishments.

According to CRGL, 88 hotels received such official permits last year. Most of them are traditionally located in the capital:

4 industry problems still to be solved

Taxes

Several issues remained outside the jurisdiction of CRGL. The first and most important is taxes. Draft Law No. 2713-d was adopted in the first reading on July 15, 2021. Two months later, on October 6, the Committee on Finance, Tax and Customs Policy reviewed the document in the second reading.

The deputies suggested:

• to improve the conceptual and terminological apparatus;
• lift tax on personal income from the winnings of players, the amount (value) of which does not exceed eight times of the minimum wage;
• to abolish the triple license fee for bookmakers, online casino operators and slot machines.

On December 16, plenary sessions of the sixth session of the Verkhovna Rada of Ukraine took place. The entire gambling industry froze in anticipation of the adoption of the document. However, the servants of the people did not manage to consider it.

Certification

The second issue that worries the industry is the certification of gambling equipment. In April last year, the commission approved a list of entities entitled to certify the equipment: slot machines, gaming tables, including those with a roulette, an online gambling organizing system, and shuffle machines. At first, there were five of them, then three entities refused to work due to the lack of technical regulations, another company lost its accreditation.

For some time, only one organization could issue appropriate certificates to operators. Later, the list was expanded to eight subjects, but the problem of the lack of technical regulations still remains unresolved.

The task of developing a document that establishes unified standards for assessing and testing equipment is assigned to the Ministry of Economy. It should be noted that a corresponding project appeared in May, but there is still no news on it. Now the certification procedure for operators is carried out according to outdated State Standards of Ukraine.

Financial monitoring

The third hot topic for business is financial monitoring. The Ministry of Finance has developed a project that creates requirements for gambling operators. The provisions of the document caused a negative reaction not only from entrepreneurs and experts, but also from the regulator itself.

It contained provisions that operators were unable to comply with. For example, in addition to the information provided by law, they must ask the player for the purpose of his game, the amount of earnings, social status. It is also assumed that the Ministry of Finance will have access to the database of gamblers. CRGL did not support the approval of the document, since it contains a large number of procedures not provided for by the legislation of Ukraine.

The Ministry of Finance, in turn, claims that the world's leading experts participated in the development of the project and it fully meets the requirements of Ukrainian legislation and international standards. As with taxes and certification, the issue of financial monitoring will be considered in more detail in 2022.

Another stumbling block is the condition that there must be at least 500 m between the slot machine hall and the educational institution. Experts consider this requirement somewhat discriminatory, since it does not apply to casinos. It is also not known how to calculate the distance between objects.

Summary

2021 actually launched the gambling industry. The deputies adopted a basic package of normative acts necessary to regulate the market, the industry brought the first significant revenues to the state budget.

The only drawback is that large foreign operators are in no hurry to conquer the Ukrainian gambling market, since the problem with taxation has not been resolved. Other unresolved issues are not so critical to stop the development of the industry. The point of no return has already been passed, now the task is to eliminate controversial issues and improve the legislative framework.

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