Gambling Market Trends in the World and in Ukraine: Opinion of the Head of Global Research at Gambling Compliance Andrew Gellatly for Insider UGW Podcast

22.12.2020

In a fresh episode of UGW Insider, a special podcast about the gambling industry, experts discussed the trends in the international gambling business within the COVID-19 pandemic and talked about the potential of this industry in Ukraine. UGW Brand Ambassador Lavrenty Gubin talked to Andrew Gellatly, Head of Global Research at Gambling Compliance.

How quarantine restrictions have affected the work of casinos and what are the prospects for Ukraine on the global gambling market? Find out from the interview below!

Interviewer: Lavrenty Gubin (L.G.)

Respondent: Andrew Gellatly (A.G.)

L.G.: Andrew, what are the trends in the gaming business now worldwide considering the pandemic?

A.G.: The pandemic has really shaken up the global gaming industry, particularly the land-based side, as you’ll be aware. It’s not happening with the same speed. There are different regions being affected in different ways and speeds.

Some are recovering quite quickly as you see in US regional casino market. But others, that are more dependent on tourism and travel, like Las Vegas, Macao, are not recovering.

There has been a huge focus on those companies, whether the land-based or lotteries, who had a decent online digital entertainment proposition – those ones are the ones who prospered during this period.

When there were no sports fixtures, the bookmaking side didn’t do very well at all. Now sport is back, online is resilient. You can see the online turnovers and revenues back to pretty much pre-COVID levels in most European and US markets.

L.G.: How do you think, will the land-based operators recover after pandemic or we will see an absolutely new market then?

A.G.: You can see a very interesting situation going on in the US, when recently legalized sportsbetting have been a leading activity in the land-based casinos that were reopened.

Yes, people are returning to the casinos. There are probably not returning quite the same numbers, not the same entertainment options available.

It was seen very clearly in the places like Las Vegas: no entertainment, no restaurants, no conferences. Non-gaming revenue is very important in those markets.

Pure-play casinos are suffering and struggling to come back, but what they need is a good online offering to go with it.

L.G.: Many companies see potential now in Ukraine and in a new emerging market. What do you think about this market? Is it big enough for the worldwide gaming business?

A.G.: It is a kind of a big event. Ukraine is coming back to the world of regulated gambling. It’s a big event. It’s like welcoming an old friend back in some ways.

You know, 10 years ago a lot of operators had presence in Ukraine and were doing a good busines particularly on a poker side, online.

And the suspension of the gaming licenses and the activities for the last 10 years – it’s been an absence, but in the meantime, of course, a lot of European markets had developed, regulated and grown.

We had a sectoral growth across the European markets, but that now is starting to come to an end and operators are looking around for the alternatives. Other markets are of a descent size.

A lot of alternative markets, some of the African markets, for instance, smaller Latin American countries – they are too small and too difficult to access.

Ukraine is kind of at the doorstep of Europe, a good population, high propensity to gamble – so it is very attractive.

For operators, who are facing higher and higher tax burdens in their European markets, or places like Germany, where can be product restrictions, Ukraine does represent a very interesting opportunity.

Of course, it’s not at any cost and the tax element of the puzzle has to be determined in Ukraine, but the operators are looking very closely at this opportunity now.

L.G.: What would you suggest for Ukrainian government? What would be ideal regulation in Ukraine?

A.G.: Typically, online operators prefer an open licensing, when to apply for a license you need little time; and an unlimited number of licenses to make a market where...

I guess, one of the ambitions is expensive licenses and make those licenses limited in number – that’s not ideal. Obviously, operators want to be able to get into the market and operate.

Also, clarity of the tax environment is very important. I understand there is a transitional arrangement of triple taxing before the GGR tax comes into place. And that GGR tax has not been confirmed.

The amount of tax is going to be important. Operators are kind of weary in Europe of seeing increased taxation or retrospective taxation, or different volatilities in the tax environment.

So, the clearer the operating conditions can be, the more successful the market is likely to be.

L.G.: How common is the taxation for the player, for the winnings? As far as I know in Ukraine it is a kind of a problem now.

A.G.: Winnings taxation is a kind of a problem in Latin American markets, obviously, a withholding tax in the US for the land-based players.

Generally, if you say, in Europe it is not very common for player winnings to be taxed. It’s a part of a mix. Actually, it’s not going to be the determining factor of a success or a failure of the market.

But it’s certainly something the operators don’t want to see.

L.G.: Do you know any operators willing to come to the Ukrainian market now or at the moment they are just taking a look and getting prepared?

A.G.: Well, what I think, is you’ve got a bit of lobbying, there are a lot of operators and associations, that represent them, are focusing a lot of attention on the parliamentary and regulatory process in Ukraine right now.

I don’t know if it goes to the extent of the operators building a ground game and building teams on the ground in Ukraine, but certainly they are engaging lawyers and lobbyists to stay a part of the process.

Watch the episode featuring Borys Baum, a freelance Advisor to the Deputy Head of the Office of the President of Ukraine here>>>