“There Should Be no Monopoly in the Gambling Industry,” Expert Ihor Makiievskyi

14.02.2020

How should the Ukrainian legislation on gambling regulation look like? How much time may it take to arrange the operation of the updated gambling market? Is it possible to attract additional investments to the country thanks to the legalization of the gambling industry? The head of the All-Ukrainian Association of Employers in the Recreation and Entertainment Sector Ihor Makiievskyi told Ukrainian Gaming Week about these issues.

Ihor is one of the experts that are members of the workgroup on the gambling business legalization under the Verkhovna Rada Committee for Financial, Tax, and Custom Policy of Ukraine. The expert has been the head of the All-Ukrainian Association of Employers in the Recreation and Entertainment Sector since 2011.

Interviewer: Ukrainian Gaming Week (UGW)
Respondent: Ihor Makiievskyi (I. M.)

UGW: How do you think, how should the work on the draft law about gambling business legalization proceed: behind closed doors or in the public spotlight?

I. M.: In our opinion, the adoption of the new legislation should take place openly. All provisions in this normative legal document should be debated in public. Besides, such information has to be open.

When the law is passed out of public view, behind closed doors, it can be considered as lobbyism, which is not okay to happen.

UGW: The expert community expresses different opinions concerning the optimal draft law about the gambling industry regulation. What is your opinion here?

I. M.: It is important to approach the formulation of the draft law dutifully. It will help the country to establish economic growth points, which gambling business is capable of and has to stimulate.

In our opinion, the draft law has to be formulated to serve the interests of the Ukrainian economy, and to be useful for both companies of the production industry and operators. It will allow obtaining the biggest number of benefits possible from the legalization of gambling. Such an approach will facilitate the operation of production chains and the emergence of new workplaces in the country. Ukraine should not turn into the place that sells slot machines manufactured abroad.

Besides, legalization can encourage the activation of different economic sectors, for example, IT.

It is essential to specify all the above-mentioned nuances in the document about the gambling industry regulation.

UGW: Is it possible to attract additional investments to Ukraine thanks to the legalization of the gambling business?

I. M.: When gambling legalization was discussed initially, there were plans to set up a tourism and gambling cluster on the Black Sea coast. However, the draft laws that were passed for consideration to deputies said nothing about the establishment of such zones. Indeed, they could really help to attract both local and foreign investors.

Today all the countries neighboring with Ukraine allow gambling activity. At the same time, our country bans the gambling business. For this reason, it would make sense to develop a modern law that would help to attract investments to the country. All provisions of such a document should allow running the business in Ukraine with greater profitability than in neighboring countries. Seeing and understanding all the advantages of the local gambling legislation, interested individuals and organizations will want to invest funds in our country. To create such a situation, it is necessary to think about all nuances thoroughly and clearly specify them in the law.

Unfortunately, the new legislation is being drafted in the shade. We do not know what provisions it will involve. Moreover, we do not know what officials take decisions at the highest level. Interactions with the representatives of the business community are of formal nature.

The law-making process does not have to take place in this way. The authorities already wanted to legalize the gambling business using an analogous approach in past years, but their attempts were not successful.

We believe that the work on the formulation of the law has to be carried out openly, taking into account the arguments and queries of all interested parties. In fact, we need to maintain the balance or reach a compromise between three parties: the state, representatives of the business community, and direct consumers that will use gambling services.

UGW: What tasks should the law on the gambling market regulation solve?

I. M.: First, the law should facilitate the unshadowing of the gambling market, as well as refilling the budgets with the maximum of payment revenue charged for running the gambling business. Money should go to both the central public treasury and the local budgets. Cities of our country should also be involved in this issue, as they should also get benefits from the gambling business legalization.

The draft law has to be formulated in a way to provide business representatives with understandable conditions of work in the industry. There has to be no monopoly in the market, as well as there should be no conditions for the development of corrupt practices.

UGW: Can the establishment of a gambling commission acting as a regulator become a reason for the development of corruption risks?

I. M.: The establishment of the gambling commission truly results in the emergence of big corruption risks. It is supposed that this agency will be issuing and canceling gambling permits. Besides, it will define what kind of companies comply with the licensing conditions and other requirements, and which – not. At the same time, the commission will be responsible for the formulation of new regulations, about which it will have to inform the society before the launch of the updated market.

UGW: In your opinion, how much time will it take for the gambling market to start working in the updated format?

I. M.: The transition period pays a great role. Currently, there is a lottery law in Ukraine, but it is not ideal and requires the adoption of follow-ups.

Thereby, we suppose that the Ukrainian gambling market will need at least one year of the transition period. Over this time, industry representatives will be able to study the new legislation. This will help them understand who can keep doing their business and who needs to change the format.

In our opinion, one year of the transition period is an optimal timeframe to arrange seamless operation of the legal market.

UGW: In Ukraine, thousands of people work at gambling companies that operate in the shade. Can the adoption of the new gambling legislation become a reason for the reduction in the number of workplaces?

I. M.: According to the data we have, around 50,000 people were working in the gambling field as for late 2019. It will not be right to close the market in no time and to fire all these people. Because every workplace is valued in Ukraine. Our country experienced the time when everything was destroyed down to rock bottom. At that time, such an approach did not bring positive results. Therefore, we believe that it is essential to keep workplaces.

UGW: In your opinion, what should be the cost of gambling licenses?

I. M.: There should be no monopoly in the gambling industry; the country has to create a competitive environment. I think that industry representatives have to pay a high cost for licenses. However, the sums should be reasoned from the economic standpoint and be affordable for the medium business.

On April 15, Ihor will become a participant of the panel discussion at Ukrainian Gaming Week 2020. Together with the Ukrainian politicians, foreign experts and representatives of industry associations, he will discuss the subtleties of the gambling legislation and review the main advantages of unshadowing the gambling market.

The major exhibition of advanced gambling solutions UGW 2020 will take place on April 15-16. Join the event and get an opportunity to be the first to learn about the new products in the industry, as well as ask questions of the leading industry experts.

The event’s program and details ►►►