Gambling Business Legalized in Ukraine: Details of New Legislation
On July 14, 2020, at the second final reading, deputies of the Verkhovna Rada of Ukraine adopted the bill 2285-d that regulates gambling activity. On July 27, the paper was signed by the chairman of the parliament Dmytro Razumkov. On August 11, the law was signed by the President Volodymyr Zelensky. On August 12, it was published in the parliamentary newspaper Holos Ukrayiny. On August 13, the new law came into effect.
Plans are that the new law will allow bringing the gambling business out of the shadows and attracting additional revenue to the budget. Besides, legalization of the industry is expected to have a positive impact on the development of the labor market, tourism, and infrastructure. Read more about main provisions of the law in the article below.
General requirements to organization and conduct of gambling
According to the adopted law, Ukraine legalizes land-based and online casinos, betting outlets, online betting, slot machine halls, and online poker.
Only legal entities – residents of Ukraine have the right to conduct gambling business. The company’s authorized capital should be no less than UAH 30 million. Besides, it has to be formed only from the funds the source of which can be confirmed by official documents.
Managers, chief accountant, substantial shareholders, and ultimate beneficial owners have to maintain a spotless business reputation. Citizens of the country recognized as an occupant or aggressor toward Ukraine cannot hold the abovementioned positions. All employees of gambling facilities should be at least 21 years old.
To organize and conduct gambling, business owner has to arrange a special purpose bank deposit or a bank guarantee that ensures the payment of winnings for the total amount of 7,200 minimal wages. Today this amount equals to UAH 34,005,600 *.
Gambling business operation is possible only based on a license issued by the authorized body – Commission for regulation of gambling and lotteries. This agency will ensure state regulation in the field of organization and conduct of gambling. The commission will consist of eight people. Results of the open contest will determine the head and members of the commission.
Different types of gambling activity require standalone licenses. The authorized body develops licensing conditions, and the Cabinet of Ministers approves them.
Separate requirements of the law touch upon equipment used by gambling operators. In particular, gambling organizer has to pay annual license fees for every slot machine and gambling table, including roulette tables. Moreover, the equipment has to be certified. The authorized body determines the list of gambling accessories that have to undergo certification procedure.
State online monitoring system was established to control operator activity, monitor performance of gambling equipment, and secure player rights. Individuals that organize gambling games have to connect the corresponding gambling equipment to the system, which will collect and record data on every betting transaction, payments of winnings, etc.
The online monitoring system will start working in two and a half years. Before its launch, the annual licensing fee for betting activity, online casino activity, and every slot machine will be increased threefold.
The law stipulates that operators must have an internal online system connected to the State online monitoring system. It has to record all financial operations, including placed bets, payment of winnings, etc.
Operators can conduct online gambling via websites with domain names in the UA zone and via mobile applications. They can process bets placed by Ukrainian citizens and foreign players.
The law pays great attention to measures intended to fight against gambling addiction. For example, gambling operators are required to adhere to the principles of responsible gambling. Among other things, they have to place information on the symptoms of gambling addiction in places of their activity and places where problem gamblers can get the necessary help.
Requirements to visitors of gambling facilities
The law sets requirements not only for organizers of the gambling business, but also for visitors of gambling facilities. Thus, individuals that have not reached the age of 21 are forbidden to participate in gambling. Players cannot involve people under the influence of alcohol or drugs, incapacitated and partially incapacitated persons, as well as those whom the administration of the facility has classified as unwanted guests.
Each visitor must be identified. This procedure is carried out by checking the original identity document. On Internet sites, verification can be carried out using an electronic signature, a SIM card supporting MobileID, BankID and other methods.
An individual can voluntarily restrict his or her access to gambling sites and participation in gambling for a period of six months to three years. To do this, player has to submit an appropriate application for self-restriction. At the same time, player may be prohibited from visiting gambling facilities based on the well-reasoned requirements of his family or legal representatives.
Opening of a casino: key conditions
In the original version of the law, it was assumed that land-based casinos would only be able to operate in five-star hotels. In the final version of the law, the list of locations for this type of gambling facilities was expanded.
During the second reading of the document, deputies voted for an amendment to include four-star hotels in the list of territories for opening casinos. Then an opinion was expressed that the norm was added to the document by accident and could become the basis for vetoing the bill. However, in the end, the head of the state, Volodymyr Zelensky, signed the law with the new amendment.
Thus, now casinos can be opened:
in Kyiv, on the territory of five-star hotels that have at least 150 rooms;
on the territory of four- and five-star hotels located in other towns of the country. Hotels must have at least 100 rooms;
in suburban resort complexes with a five-star hotel. The total area of such a facility should be more than 10,000 sq. m;
on the territory of a special gambling zone, which will be created by the decision of the Ukrainian Cabinet of Ministers. In total, no more than five such zones are allowed in the country.
The area of casino premises located on the territory of five-star hotels must be at least 500 sq. m.
The law provides for the issuance of investment licenses. Such a document is issued in case the applicant builds a five-star hotel complex with at least 200 rooms in Kyiv and at least 150 rooms in other cities.
Separate norms of the law determine the minimum amount of gambling equipment that can operate in one casino. This figure depends on the location of the facility and the number of residents in the city in which it will be located.
As for the cost of licenses for gambling in land-based casinos, to register the document giving the right to open a facility in Kyiv, one must pay 60,000 minimum wages (UAH 283,380,000 *), and to open a facility in other towns – 30,000 minimum wages (UAH 141,690,000 *). The cost of online casino license is 6,500 minimum wages (UAH 30,699,500 *). Licensing documents for the opening of land-based and online casinos are issued for the period of five years.
There is no fee for obtaining an investment license. Its validity period is 10 years.
Features of the organization of bookmaker activities
According to the new gambling legislation, land-based betting outlets can be located on the territory of three-, four- and five-star hotels with at least 50 rooms if they are based in Kyiv, and at least 25 rooms – in other towns.
Also, land-based betting outlets are allowed to open at hippodromes. However, one can accept bets there only on competitions held directly at the hippodrome.
The total area of the premises, where betting outlets are allowed to be based, must be at least 50 sq. m.
A betting license is issued for five years and gives its holder the right to accept bets in both offline and online market segments. To obtain such a document, an entrepreneur must pay a fee of 30,000 minimum wages (UAH 141,690,000 *). The annual licensing fee for a betting outlet is 30 minimum wages (UAH 141,690 *).
To obtain a license for the organization of totalizer at the hippodrome, operator has to pay a fee of one minimum wage – today UAH 4,723. Its validity period is five years.
Slot machine halls and online poker: the main requirements for organizing a business
The law states that it is allowed to equip slot machine halls on the territory of 3-, 4-, 5-star hotels, which have at least 50 rooms in Kyiv and 25 rooms or more – in other towns. The area of the premises, where the gambling facility will operate, should be more than 300 sq. m.
At the same time, the new legislation prohibits to open slot machine halls at a distance of less than 500 meters from educational institutions and in cities where less than 10,000 people live.
One license entitles the business owner to place no more than 250 slot machines in one hall. Besides, at least 50 slot machines can operate in each hall.
For the license that allows opening a slot machine hall, a fee of 7,500 minimum wages (UAH 35,422,500 *) is charged. It is issued for five years.
As for online poker games, the law allows a legal entity to conduct its activities on the Internet using the website and/or mobile applications.
The cost of online poker license is 5,000 minimum wages (UAH 23,615,000 *). The permit is considered valid within five years.
Responsibility for law violation
For modifications of gambling equipment that are not envisaged by manufacturer, the violator can be fined for 1,000 minimum wages. Penalties apply to each equipment unit.
For admission to a gambling facility of visitors under the age of 21, a fine of 500 minimum wages is envisaged. The same fine will be imposed for violation of the identification procedure, in the result of which a person below 21 years old was allowed to participate in gambling.
For accepting bets offline without the license for a betting outlet, the gambling organizer faces a fine in the amount of 160 minimum wages. The penalty is applied for each case of conducting a betting activity.
A gambling market participant faces a fine of 1000 minimum wages if he accepts bets using equipment that has not passed mandatory inspection, certification and is not connected to the State Online Monitoring System.
Financial sanctions are also envisaged for the use of equipment, for which an appropriate license has not been obtained. In particular, for the operation of a roulette table, an offender faces a penalty in the amount of 700 minimum wages, for each use of other types of gambling tables – a fine of 350 minimum wages, for using a slot machine without a license – a fine of 24 minimum wages.
* The amount is specified taking into account the minimum wage in Ukraine as of January 1, 2020, which is set at UAH 4,723.
Do you want to know more about nuances of the gambling legislation in Ukraine? Come to Ukrainian Gaming Week 2020 held on October 6-7.
The event will feature Ukrainian and foreign experts that will consider the specifics of gambling regulation and discuss market prospects. Besides, the latest developments in the gambling market will be presented and the best companies in the industry will be awarded at the event.