Summer 2020 has become a turning point for gambling in Ukraine. The Verkhovna Rada and the President adopted a law on the legalization of the gaming industry.
Michael Boettcher’s Storm International, an international gaming entertainment operator, supports Ukrainian government initiative to legalize the gaming business. The holding is ready to enter the Ukrainian market as soon as all issues in the country legislation are settled. The chief executive officer of Storm International, Darren Keane, is positive about the lifting of the ban on gambling business in Ukraine and makes optimistic forecasts regarding the development of the gaming industry in the country.
The new bill on the gaming business in Ukraine in general terms
The Law allows the following categories of gambling activities to be conducted on the territory of Ukraine:
• Games (land-based and online games) – casino games, including casino table games, offline poker, etc.
• Betting (at bookmakers and online) – Bets on any real-life events such as sports and horse racing, excluding virtual events.
• Slot machines (in the slot halls).
• Online poker.
The Gambling Bill also amends the law regulating lotteries in Ukraine, which is a separate type of gambling activity controlled by the state.
Legalization of casinos in Ukraine in numbers
In August 2020, Ukrainian President Volodymyr Zelenskyy signed a bill on the gambling industry legalization, which the Verkhovna Rada adopted on July 14, 2020. Ground-based gambling establishments as well as virtual casinos are currently banned in Ukraine, but the consent of the country’s president will legalize both. Although the first category will only be allowed in luxury hotels after paying a license fee of about $ 4.5 million for real estate located in Kiev. The rest of the country’s gambling establishments will cost about $ 2.6 million. Online gambling operators will receive similar licenses after paying a fee of about $ 1.1 million, and the rate for bookmakers is about $ 2.6 million. All of these fees are to be tripled until Ukraine launches an official online monitoring system sometime in the next 30 months.
In addition, the law on the gaming business establishes who will be allowed to own and operate land-based casinos or supply such establishments with games.
Now, following the approval of the proposed bill by the president, the government will be required to create a commission to oversee gambling facilities. And it is also necessary to adopt a new set of relevant tax laws.
On the latter aspect, there are currently five different proposals. According to these proposals, the possible duty on gambling transactions could be in the range of 25% of gambling income and up to a more reasonable 10%.
Basic requirements for gambling industry operators:
• It must be a legal entity – a resident of Ukraine.
• The operator must have a registered capital of at least 970,000 euros.
• Cannot be directly or indirectly controlled by persons or citizens of the “aggressor state”.
• Cannot be a bank, other financial institution, or nongovernmental organization.
• Must have a security deposit or bank guarantee in the amount of EUR 1.1 million.
As an international organization and one of the leaders in the gaming industry market, Storm International notes the fact that the Law on the gaming business in Ukraine meets the most important modern standards. The law provides for the introduction of the principle of responsible gambling, which all operators must adhere to. In addition, the requirements for players and their identification are established.
As a responsible operator, Storm International understands the risks involved in gambling and adheres to the standards set by the Responsible Gaming Program. This program includes age restrictions, social standards, strict quality control of the gambling establishment, dissemination of relevant information and restrictions on advertising.
What is important for players to know
The Gambling Law focuses on the safety and protection of players from addiction, including setting a minimum age of 21, mandatory player identification, and registration of blacklisted players. For example, players may irrevocably request to be blacklisted or be blacklisted at the request of close relatives.
A structure that monitors gambling entertainment
The new legislation in the field of gambling envisages the creation of a central monitoring structure. This system will allow the regulator to connect to the play equipment and monitor all play activities in real time. Such a structure is still under development, but it is expected to happen in two years under the Gambling Law. Until then, the licensing fees for land-based casinos, online games, and the annual additional license fees for each slot machine will triple.
The word to the gambling industry leaders
As noted in the company Storm International – the implementation of state licensing of the gambling business will have a positive impact on the country’s budget. Removing this area from the shadows will enable the state to receive additional taxes. Among other things, this will help attract foreign investors. An one more important fact is that the development of a gambling business operating on a legal basis will expand the labor market in the country. It is worth noting that many Ukrainian citizens work in the game and entertainment centers in European countries run by Storm International, Darren Keane admitted. With the adoption of a new law that legalizes the organization of the gaming business, they have the opportunity to continue their careers in their home country.
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