The parliament voted in favour of the draft law 2285-D on July 14, 2020. The document aimed to legalise the gaming business in Ukraine was considered at an extraordinary session of the Verkhovna Rada. The innovations were supported by 248 deputies.
The majority of votes were provided by the party Sluha Narodu (Servant of the People) (224). Some members of the “For the Future” and “Trust” factions also approved the amendments.
The Objectives of Bill No.2285-D
The ban on gambling in Ukraine has been in effect since 2009.
For 11 years, lottery operators (the only legal segment) have found several loopholes allowing them to organise underground gaming clubs. According to experts, the country’s budget loses 10 billion hryvnias due to such activities annually. This amount could be used for the needs of health care, education and other social areas.
Complete transfer of the gaming business from the shadow segment and optimisation of budget revenues are the main goals of Bill No. 2285-D.
The authors of the project (Oleg Marusyak, Daniil Getmantsev and others) note:
- the legalisation will bring at least 2.5 billion hryvnias to the state treasury in 2020;
- gambling investors will receive many benefits; the Verkhovna Rada Committee on Finance and Banking expects a strong recovery of the gambling market this year.
The document will put an end to the lottery monopoly that has hampered business development for many years.
Parliament promises to develop a project to reduce the tax burden on gambling businesses and put it to the vote. The changes will affect VAT and the unified income tax.
What Gambling Activities will be Allowed
The document will legalise two gambling areas at once:
- online segment: virtual casinos, sports betting websites and sweepstakes, online poker projects;
- land-based business: slot machine halls, bookmaker and lottery kiosks, casinos.
The Verkhovna Rada does not consider offline poker tournaments as gambling activities. The Ministry of Youth and Sports will be engaged in issuing documents for organising poker games.
License Validity Terms and the Cost of Permits
The legalisation implies the registration and renewal of permits. Operators having licences issued following the new rules will be able to work in Ukraine legally, without the threat of any sanctions.
The initiators of Bill No. 2285-D based the cost of each license on the amount of the minimum wage. This parameter changes annually (in some cases, several times a year) and is determined by the Cabinet of Ministers during the formation of the country's budget. The size of the minimum wage is 4,723 hryvnias in 2020.
All licenses will be valid for 5 years.
Operators must pay one-fifth of the permit cost annually.
| Kind of activity | Cost | ||
| In a number of minimum wages, ths. | In national currency, UAH million | ||
| Betting | In online establishments | 6,5 | 30,7 |
| In land-based kiosks | |||
| Games of chance | In online establishments | 30 | 141,7 |
| In land-based casinos | 60 (for Kyiv); 30 (for other cities) | 283.4 (for the capital); 141.7 (for other cities) | |
| In slot machine halls | 7,5 | 35,4 | |
| Online poker | 5 | 23,6 | |
The Admission of Players: The Main Requirements
After the adoption of Bill No. 2285-D in the first reading (January 17, 2020), the document was sent for revision to the finance committee. Parliamentarians submitted almost 3.5 thousand amendments. Most of them concerned the fight against gambling addiction.
The results of the revision are as follows:
- Increasing the minimum age for gamers from 18 to 21 years.
- A ban on games for representatives of the occupying country, incapacitated persons and persons with limited legal capacity.
- The creation of a separate register for self-restrained persons.
The measures envisaged by the bill sparked a heated discussion among opposition politicians and market experts.
Political scientist Nikolai Spiridonov believes:
“According to the resolution of the Cabinet of Ministers, the age of 20 is the age of recruitment. At the same time, President Zelensky believes that soldiers can be called up for military service at the age of 18… Accordingly, gamblers can say: why can we go to the army from the age of 18, but we have no right to play casino games?”
The document provides some restrictions for:
- players with a 3-month debt of maintenance;
- gamers receiving subsidies for housing and communal services;
- gamblers with debt obligations equivalent to 100 and more living wages.
Family members can also restrict a player by a court decision.
However, Nikolai Spiridonov believes:
“These restrictions will not work very effectively. Unless, one of the family members will be very actively seeking their implementation through the courts.”
The Conditions for Businessmen
The document defines the list of requirements for licensees:
- Opening a legal entity. The company can be registered as a limited or joint-stock company, as well as a legal entity with limited or full liability. Members of local self-government bodies or non-profit enterprises cannot be the founders.
- The minimum amount of the authorised capital is 30 million hryvnias. Borrowed money, loans, and budget funds cannot be used for its formation. Funding sources must be documented.
- The absence of a conviction is a prerequisite for the head and chief accountant of the company.
- Equipment certification. Each piece of equipment placed in the hall (a slot machine, a gaming table, a terminal) must have a corresponding document. This condition is also relevant for software used in land-based and virtual establishments.
In the future, all market participants will be connected to the state online monitoring system. The government promises to launch it within 2 years. After the launch of the platform, the cost of licenses will triple.
The Main Things about the Legalisation of the Gambling Industry in Ukraine
The adoption of the document No. 2285-D revived the gambling segment in the state.
- The operation of both land-based establishments and resources providing gaming services on the Internet will be allowed.
- Licenses will be issued for 5 years. Their cost depends on the type of gambling activity and the size of the minimum wage.
- The Verkhovna Rada raised the minimum age of players to 21 years and introduced several restrictions to combat gambling addiction.
The law has not yet been signed by the President, but many market participants are already planning and developing their gambling projects. The haste is due to the fact that the first licensees will receive significant benefits.
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The company also offers the following options:
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