Conditions For Issuing Licenses to Gambling Business: General Information

On December 21, 2020, the Cabinet of Ministers of Ukraine adopted a resolution on the approval of licensing conditions in the field of organizing and conducting gambling. The requirements relate to the implementation of gambling activities in land-based and online casinos, slot machine halls, betting shops, online betting platforms and online poker websites. The document comes into force from the moment of signing, except for some provisions regarding the creation of registers for gambling operators and the launch of the State Online Monitoring System.

The approved resolution acts as a necessary addition to the already adopted law on the regulation of activities related to the organization of gambling. Read more details about its main provisions in the article.

► General rules

Both conduct and participation in gambling activities is allowed only to people who have reached the age of 21. The same age limits are set for employees of gambling establishments.

Banks (or other financial institutions), enterprises that are listed in the register of non-profitable organizations, as well as legal entities that are prohibited from engaging in this type of activity according to a court decision, cannot become organizers of gambling activities.

A number of general conditions apply to all licensees. For example, only a legal entity that is a resident of Ukraine can become one. All executives, as well as those responsible for financial transactions, must have an impeccable business reputation.

The decision to issue a license is made by the Commission for Regulation of Gambling and Lotteries (CRGL). Documents required for licensing can be submitted in person, sent by mail or electronically. The licensing authority must report its decision within five days from the date of its adoption. If CRGL refuses to issue a license, gambling regulator must indicate the grounds for such refusal in its decision.

Each license is for one organizer brand only. Moreover, depending on the type of gambling activity, the operator may require additional licensing documents. For example, if we are talking about opening a land-based casino, then in this case, you also need to obtain a license for each gambling table (including a table with a roulette wheel) and slot machine.

To obtain a license, the applicant must prepare and submit a number of documents. These include:

• package of constituent documents of the licensee;
• an extract from the trade, court or bank register about the founder (participant) of the applicant, if it is a foreign legal entity, issued not more than 90 days ago;
• a document from an independent auditor that verified the completeness of the establishment of the registered capital;
• financial statements of legal entities or tax statements for individuals who participate in the process of organizing gambling activities to confirm all sources that make up the registered capital;
• a document confirming the authority of the person who signs the application for a gambling license;
• police clearance certificates for all managers, owners, chief accountant, ultimate beneficial owner;
• documents confirming the rights to a certain brand and a number of others.

Absolutely all gambling business owners must ensure the operation of an online system that will record information about all financial transactions between the operator and the player in real time. Such a system should be connected to the State Online Monitoring System as soon as the latter is launched.

The text of the resolution contains strict requirements for the measures that must be taken by the organizers to combat gambling addiction. Land-based business and venues where gambling activities are held shall distribute information about the symptoms of gambling addiction and institutions helping to cope with it. When it comes to online gambling, this information shall be posted on the website or in the application.

Also, licensees are required to ensure a process for identifying each client. In casinos, slot machine halls, as well as bookmaker offices, ID check is obligatory. Online gambling operators must ensure client verification using BankID or other general methods.

Both land-based and online businesses are not permitted to host games that contain the elements of lottery, including accepting bets on lottery draw results.

► Requirements for running a gambling business in the offline segment

The licensing terms stipulate strict requirements to land-based gambling venues. They can be located on the territory of hotels of certain categories and with different types of rooms. Restrictions depend on the type of gambling activity and the city in which the institution will operate. Betting shops are still allowed to be placed on the territory of hippodromes, and casinos – in suburban recreation complexes that meet a number of conditions, and in special gambling zones.

At the same time, it is strictly forbidden to open gambling venues within in the premises of state bodies or religious organizations, buildings of religious significance, housing stock, unfinished buildings, kiosks.

Information on the compliance of the gambling territory with the established requirements is submitted along with other documents to the licensing authority. To open a casino, slot machine halls and betting shops, the applicant must provide documents that certify the ownership or right to use of a certain room for a gambling business.

Smoking is not allowed in the gambling halls. Also, the organizer undertakes to prevent persons under the influence of alcoholic or drug intoxication from gambling activities.

Within the framework of one corresponding license, the owner of slot machine halls has the right to place up to 250 slot machines. All machines involved must be produced not earlier than 2019 and have the necessary certificates. The total win rate (theoretical return to player) must be at least 90% on each slot. The usage of slot machines with an option of manual adjustment of the winning percentage is prohibited.

As for the activities of betting shops, a list of restrictions has also been developed. Acceptance of bets on credit and provision of any loans to the client are prohibited. It is not allowed to bet on events that are unacceptable for moral and ethical reasons or offend the country's sovereignty. Within the premises where bets are accepted, it is prohibited to install ATMs, pawnshop offices and credit organizations.

► Online gambling: key requirements

The operator must post the following information on any online resources (website, application) hosting gambling or poker games:

• the official name of the organizer according to the documents;
• place of registration of the organizer and actual location;
• organizer's identification code;
• information about the license;
• rules for participation in gambling activities;
• payment regulations;
• information about all applications and gambling equipment used by the organizer;
• information about technical support and service support;
• materials about responsible gambling, the emergence of gambling addiction, ways to combat gambling addiction, as well as contact details of medical centers that help get rid of it;
• all warnings regarding restrictions imposed by law.

The online system for conducting gambling activities must belong to the organizer on the basis of the right of ownership or usage and shall be connected to the State Online Monitoring System.

It should involve mechanisms for identifying the player, fixing the reception, calculation and payout of winnings, as well as certain methods of protecting the personal data of users and protecting against any unauthorized interference with the online system operations.

To obtain a license, the operator must present the rights for the corresponding domain name in the UA domain zone, which will be used for organizing gambling activities, as well as data on the hosting provider and domain name registrar.

The organizers of gambling activities shall have no right to provide telecommunication services and equipment to third parties for Internet access.

The online betting operator is obliged to provide users with access to all event lines available for betting.

The organizer of the poker games has the right to impose some restrictions on players and visitors. In particular, to refuse payouts to persons who are not players. Also, the operator can refuse payouts and return the bets in case of noticing violations of the law on preventing and combating the legalization (laundering) of income. Organizer has the right to restrict access to the website or application if the user violates public order, interferes with the poker game at any stage, or if there is a suspicion that the user is using programs or technologies that affect the outcome of the win.

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More details about the legislative features of obtaining licenses in Ukraine will be discussed on February 24-25 at Ukrainian Gaming Week 2021.

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