The legalization of the gambling business was one of the points of the election campaign of Vladimir Zelensky, so it is not surprising that, having taken the presidency, he did not postpone the resolution of this issue. Already on August 11, 2020, the law on gambling (No. 2285-d) was signed, thereby making the gambling business legal on the territory of Ukraine.
The Verkhovna Rada understood that the gambling industry is a huge market and the ban on gambling only translated it into the shadows. Many slot machine halls were opened under the guise of lotteries or other masks, so there have been heated debates around their legitimization and the direction of funds to the country’s budget. The development and introduction of this bill allowed at the official level to regulate the requirements for such institutions, and most importantly, to receive additional income, which is planned to be directed to the development of medicine, education and other things.
A number of major international operators are already conducting legal consultations to open their business in Ukraine. So, Parimatch and Shangri La by Michael Boettcher plan to start working in the country in the future.
Licenses And Requirements
Despite the signed bill, the legalization of gambling in Ukraine is just beginning. The issue of taxation of this industry has not been fully worked out; at the moment, departments and commissions have not been formed to regulate the gambling market and distribute the income received from it, but full functioning is promised by 2021.
The following types of gambling halls and activities are regulated:
- casino
- online casino
- bookmaker activity
- slot machines
- online poker
Each type of activity requires its own license and a number of its requirements are put forward to each of them. A license for a gambling business can only be issued to a legal entity of Ukraine, which is engaged in the organization and conduct of gambling as the main activity. The company’s budget must be at least UAH 30 million.
Casino Legalization
A casino license requires the placement of a casino on the territory of a 5-star hotel and includes at least 150 rooms, for Kiev the requirement is slightly different, you need at least 200 rooms. Yes, for Kiev and for other regions of Ukraine, the license requirement may differ, as well as its cost. A casino license for a period of 5 years, for Kiev, will cost 60,000 minimal salaries, for the regions this price is twice lower. In addition, it is possible to obtain an investment license for a period of 10 years, it is issued if the investor is ready to implement a separate investment. project, or build a hotel complex suitable for the requirements.
Bookmakers can operate in any non-residential building, the price of their license is 30,000 minimal salaries. Slot machines can be located on the territory of hotels of a 3-star category and above, the price for their license is 7,500 minimal salaries, plus 6 minimal salaries for each machine. You cannot place bookmakers and slot machine halls at a distance closer than 500 from educational institutions and government buildings, hospitals, etc.
The gambling legalization also affects online activities. Such a license is issued only for one site, which must have a user identification system before accepting a bet, and also allow payment only from non-cash bank cards. However, online poker requires a separate license with additional fees. A gambling license is not required for the type of poker where there are no bets, such poker is considered a sport.
Gambling Initiatives
The return of the gambling business to Ukraine has entailed many initiatives that are now being submitted to the Verkhovna Rada. So, one of these projects is the Bill No. 3899 of 07/17/2020 “On Amendments to the Budget Code of Ukraine regarding the establishment of the State Fund for Support of Medicine, Sports, Education, Culture and Science.” Such an initiative is aimed at maintaining social orientation in the country, as well as to comply with EU standards in the gambling sector.
The authors of the project propose the following transformation of the Budget Code of Ukraine:
- Contribution to the Special Fund of the State Budget of Ukraine of assets for investment in medicine, sports, education, culture and science;
- To direct the deductions from the received annual payments for the license to conduct gambling, as well as lotteries to the said State Support Fund;
- Half of the payments for licenses to conduct gambling, as well as all payments for licenses for bookmaker offices, should be directed to local budgets (according to the location of the gambling establishment);
- With the targeted direction of payment, the received funds should be directed to the funds for the development of medicine, sports, education, culture and science.
Foreign investors are confident that legalization will benefit the state and its residents. So Darren Keane, Shangri La managing director, has repeatedly said that the employees of many brand units are citizens of Ukraine who will be happy to return to their homeland. In addition, the presence of a casino will spur the development of hotel and tourism destinations.
Such actions fully support the world practice of doing this area of business, including the work of this area in European countries. The gaming business in Ukraine, in turn, does not at all refuse to provide financial assistance to the state and local municipalities. Now market players want to work not only in the legal field, but also to form a socially responsible sector.