The Verkhovna Rada Allowed Gambling in Ukraine: Some Important Nuances
On July 14, 2020, the Ukrainian parliament adopted the bill No.2285-D. This document authorises gambling activities within the country. 248 deputies' votes were given in favour of the new law. The bill was considered over several sessions because about three and a half thousand amendments were added to the original text.
According to the forecasts of the special-purpose committee, gambling enterprises will bring to the local treasury from 2.5 to 4 billion hryvnias in the first year of their legal operation.
Since 2009, the gambling industry has been under government ban. An exception was the monopolised lottery business. After 11 years, the situation may change dramatically.
Bill No. 2285-D will allow businessmen to open:
- land-based casinos and betting establishments;
- online real money gaming services;
- online poker;
- land-based slot machine halls;
- commercial lotteries.
The cost of licenses is calculated based on the amount of the minimum wage in Ukraine. In 2020, this sum makes up 4723 UAH.
Prices are valid as of July 15 this year:
Type of activity
Cost in UAH
The organisation of land-based establishments outside built-up areas
Land-based casino in the capital
Licensing of a betting business (offline and online services)
The legalisation of a slot machine hall
The organisation of an online poker website
A gambling certificate for any format of gaming is issued for 5 years.
The annual provision of the Ukrainian gambling license will cost:
Type of activity
Price in UAH
The maintenance of one roulette table
A certificate for one gaming table without a roulette wheel
One piece of equipment
The annual fee for organising virtual games (except poker)
The annual charges for maintaining a bookmaker license
The industry’s operations will be controlled by the Commission for the Development and Regulation of Gambling. The organisation will consist of a head and 6 members. They will be selected on a competitive basis. Appointments and dismissals will be overseen by the government.
Candidates wishing to join the supervisory authority should have the following personal qualities:
- higher education in the fields of administration, economics and jurisprudence;
- a positive business reputation;
- at least 7 years of cumulative work experience and 3 years of managerial experience;
- fluency in the official language.
The term of the commission members’ office is 4 years (without the possibility of re-election more than 2 times in a row).
The regulatory body will be responsible for the following tasks:
- Issuance of licenses (11 types). The conditions of the certificates will be confirmed by the Cabinet of Ministers of Ukraine. Each gambling brand can use only one permission (without sublicensing).
- Formation of registers. These will be lists of organisers and a register of persons who are restricted in visiting gambling establishments. All lists, except the above register, will be publicly available on the website of the gambling regulator.
- The list of equipment. This list will include slot machines, cash register equipment, and other systems subject to mandatory certification.
- Online monitoring of the industry. The authorised agency is developing a single virtual system. All holders of Ukrainian licenses will have to join it. The platform will record and process information about all bets, payments and revenues of the organisers in a real-time mode (second by second).
We asked about the opinion of the political scientist Nikolai Spiridonov, an expert at the Ukrainian Institute of Politics, about the new law.
The specialist drew attention to the rules for the location of land-based casinos. He compared them with the norms of other states:
In America and some other countries, gambling establishments are placed mainly outside the cities. This is done to make it more difficult to get there for some persons, for example, minors.
The situation in Ukraine is different — the objects of the gambling industry will be concentrated in large cities.
This legislative initiative is most likely lobbied by representatives of the hotel business because casinos are located in hotels. Why not in cinemas or stadiums?
The norms for the location of land-based gaming complexes are really strict:
- Gambling locations can be opened only in 5-star hotels with at least a hundred rooms (or 150 rooms for the capital).
- It is possible to organise gambling activities on the territory of suburban complexes from 10 thousand square meters. There must be two or more real estate objects on the territory. One of them should be a hotel.
- Slot machines halls will be located in 5-star hotels with 25 and more rooms (of 50 rooms for Kyiv). There must be at least 50 hardware devices on the territory of an establishment (the maximum number allowed by the license is 250 pieces of equipment).
- Bookmakers can provide their services in 3-, 4- and 5-star hotel complexes and at racetracks. Players will be able to bet only on real sports events. Betting on eSports is still illegal in Ukraine.
An operator can count on a free license for a 10-year period under the condition that he or she will build a hotel complex with more than 150 rooms (or at least 200 rooms for the capital). The investor will not pay for the basic certificate. However, he or she will have to make contributions for the maintenance of licenses for each piece of gaming equipment.
An applicant for a gambling license in Ukraine must meet the following requirements:
- mandatory legal status on the territory of the country (economic entity; the organisation and conducting of a gambling business should be the main activity);
- the presence of authorised capital from 30 million hryvnias (it is prohibited to use budget and borrowed funds, as well as financial assets without confirmation of their source;
- the management and accounting department of the company must provide police clearance certificates;
- the chief accountant or another person involved in accounting of the enterprise must have higher economic education (at least a bachelor's degree) and 3 years of working experience in a similar position;
- persons previously declared bankrupt cannot be founders and managers of an enterprise;
- an operator cannot organise gambling activities if he or she is a resident of a country recognised an aggressor against Ukraine.
The conditions for the legalisation of the gambling business on the territory of Ukraine apply to both local entrepreneurs and foreign investors.
The following fines are provided for violation of legal norms:
- 2 361 500 UAH — for the admission of minors to the game (persons under 21);
- 4 723 000 UAH — for the use of non-certified equipment;
- 755 680 UAH — for illegal bookmaker activities.
The gambling bill was passed by the parliament on July 14, 2020. Until that time, gambling in Ukraine was banned for 11 years (since 2009).
The basic provisions and instructions for future participants in the gambling market:
- license validity period is 5 years;
- all types of gambling are allowed (from land-based casinos to lotteries and online poker);
- land-based locations can be located only in 5-star hotels;
- persons under the age of 21 cannot take part in real money games;
- the gambling market of Ukraine is open to foreign investors.
Important thing: the bill has been adopted, but has not yet been signed by the president. This is the right time to launch your own start-up. Operators who are the first to obtain a Ukrainian license, will receive a significant advantage over other market participants.
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