The Act №2285-d Has Been Enacted: New Opportunities for the Gambling Industry20 december 2019
3.1. Additional Expenses
The Gambling Act in Ukraine was adopted at the winter session of the Verkhovna Rada. The voting took place on January 16, 2020, and 260 members of parliament have casted an affirmative vote. Now, it is easier than before and more cost-efficient to launch an online casino in Ukraine or another gambling project.
This item was listed as one of the priorities in the election program of the party “Servant of the people”. The exposure draft №2285 “lost a race” during the voting that took place last December. After that, specialised committees have finalised the document and presented the revised version of the bill №2285-d, for which they voted at the winter parliamentary session.
According to the estimates of the government, the gambling business in Ukraine can bring 4 billion hryvnias a year. The money will be spent on the implementation of projects in the field of healthcare and education, as well as other needs of the country's budget. Market experts take a positive view on the innovations and hope that the changes will bring the gambling industry in from the cold.
In the draft bill, the principles of combating ludomania are explicitly stated:
- Minors are not allowed to visit gambling establishments.
- All users will be able to add themselves to the self-restriction list for a period of from 6 months to 3 years. Such an option will also be available to relatives of a person with addiction but, in this case, it will be necessary to show the decision of the court.
- Special attention needs to be paid to the need for personal identification, which is described in detail in the above-mentioned bill. In land-based casinos, it can be done only with a passport, and in the online sector ― with the help of an electronic digital signature, a SIM card with MobileID support, the BankID method or a scanned copy of a passport.
The legalisation of gambling in Ukraine will be carried out by the issuance of permits for 5 years. The cost of licenses will vary depending on the type of activity, the location of the gambling establishment, and some other factors.
The type of gambling activity
The cost of a license, in millions of hryvnias
Gambling halls with “one-armed bandits”
In addition to the permits, companies will have to obtain additional licensing agreements based on the specifics of the chosen niche in the gambling industry:
The opening of a casino in Ukraine will require the acquisition of permits for each slot machine (28.3 thousand hryvnias), a table with the built-in roulette (56.6 thousand hryvnias), and a table without a roulette (30.1 thousand hryvnias).
When you are launching an online casino, it is necessary to obtain a permit for the organisation of tournaments for poker players (11.8 million hryvnias). Fulfilment of this condition can facilitate the work of your virtual service in the future.
The gambling business in Ukraine in the form of betting requires the issuance of two permits: for bookmaker’s activity and each land-based betting shop (377.8 thousand hryvnias).
The lottery sphere is planned to be given to state monopolists. This approach reminds us of the practice of recent years when the gambling business in Ukraine was represented only by lotteries from several brands.
It is also possible to get a license for the organisation of poker on the Web. A company will need a separate website or mobile application. In this case, bets are accepted from locals and representatives of those tax jurisdictions where poker is allowed on the legislative level.
In addition to payments for casino licensing, all companies must pay 18% VAT. The Verkhovna Rada is going to review a draft law on preferential taxation in the amount of 10% of the turnover but it is not yet known when they will do it. Physical entities who have won prizes will also have to pay taxes. The tax rate is the same ― the income tax in the amount of 18%.
To open a gambling business in Ukraine, applicants must fulfil the following conditions:
- Register the company in the domestic legal framework. An alternative solution is to organise a local branch office of an already existing foreign company (a resident of any state other than the Russian Federation).
- Provide a financial guarantee (an authorised fund) in the amount of 30 million hryvnias.
- Pass certification of all the used equipment (slot machines, terminals, cash registers, servers, and so on).
- Install audio and video surveillance in gambling halls and staff rooms.
- Register a gaming site in the .ua domain zone.
- Connect the equipment to the governmental online monitoring system.
- Organise cash services in land-based casinos or connect a payment module in the online segment. In both cases, payments can be made only in hryvnias.
It will be possible to open a casino in Ukraine only in five-star hotels, and the gambling establishment must have a separate entrance and exit. The number of rooms in the hotel is also important: the cost of a license directly depends on it.
For those investors who want to build a hotel from scratch and open a casino in it, such an option as preferential licensing is offered. In this case, the object should accommodate 200 rooms. For already existing hotels, it is enough to have 150 (in Kyiv) and 100 (in other cities) rooms.
A similar principle is implemented in relation to bookmakers and gambling clubs: they can be located in hotels with 3 stars and more. Those betting shops that accept bets on horse races can also be placed at hippodromes. The minimum area is 50 square metres for a betting shop and 300 square metres for gambling establishments with slot machines.
Gambling in Ukraine will be regulated by a specially created authority ― the Gambling Commission. The list of its responsibilities includes:
- Monitoring of compliance of companies with license agreements.
- Monitoring of gambling activities.
- Determination of requirements for the certification of equipment.
- Maintaining public ledgers in relation to business entities that have received a license.
Also, the commission has the right to check the package of documents of those applicants who are planning to buy a casino in Ukraine or launch another gambling project. The licenses themselves will be drawn on the basis of tendering on the Prozorro site. The service will charge a 10% fee of the total amount of transaction.
The composition of the commission will be elected: it will include six people and a chairman. Each participant will be appointed by the Cabinet of Ministers with the submission of relevant committees. These should be independent individuals with excellent knowledge of the specifics of the industry.
In the gambling field in Ukraine in 2020, there will be sanctions for the following contempt of law:
- Access to a gambling establishment by minors (people under 21 years old), non-compliance with the user identification procedure, and the disclosure of personal information of gamblers ― 2.4 million hryvnias.
- Unauthorised interference with the operation of the equipment ― 4.8 million hryvnias.
- Violation of the advertising requirements ― 1.4 million hryvnias.
It is forbidden to advertise gambling services in the framework of sports and cultural events. It is also impossible to conduct advertising campaigns in the context of goods and services intended for minors, the disadvantaged population, psychopathic people, and other vulnerable population groups.
It is also prohibited to use the title “casino” on the signs of land-based gambling establishments.
In addition to punitive sanctions, violators can be subject to criminal prosecution and be sent to prison for 6 years. The license will be recalled, and all equipment will be confiscated.
Gambling in Ukraine opens possibilities for both entrepreneurs and investors. It is becoming profitable ― to invest in the domestic gambling industry: this is a chance to earn good money and increase the level of competitiveness and brand recognition.
You can launch your own gambling project by contacting Casino Market. We provide a wide range of services related to the registration of a company, acquisition of a license, and purchase of gambling equipment and software for a gaming site.
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