The head of the All-Ukrainian Association of Employers' Organizations in the Recreation and Entertainment Industry Igor Makievsky answered several questions to the Ukrainian Gaming Week website regarding the process of legalizing of the gambling business in Ukraine and the text of the bill, which is now being considered by the Verkhovna Rada in the second reading:
"The text, which has been prepared for the second reading, contains, in our opinion, the excessive regulation of the market. The draft law contains a lot of norms and requirements, which together are very difficult to fulfill and which directly affect such an indicator as the ease of doing business. So, “the ease of running a gambling business” in Ukraine is very difficult, if I may say so".
Makeyevsky comments license prices:
"We also note a very high price for entering the market and licensing fees, which may be acceptable for the city of Kiev and for some specific locations, but for most regions and Ukrainian business they are very high and unaffordable. As a result, according to our estimates, if this legalization format is adopted, then the budget will receive from the gambling market about 10 times less - about $30-50 million a year, instead of $300 million to half a billion dollars a year with a transparent, understandable approach and regulation. "
The expert also recalled that experts highlight the Georgian and Belarusian approaches to regulating the gambling market. These countries are closer to us in mentality and more understandable in terms of the market.
"So, Georgian contains literally three royalties, or rather - a large general license, patents and payment to the local budget. Moreover, they have differentiation of payments depending on the region and its economic condition. The meaning is this: they have high payments, but business pays three payments a year and this is where his relations with the state, so to speak, end. In other words, the business has fulfilled its obligations to the state and can calmly build its work without hassle. Belarus has a different system. The state taxes come from this business through the online system Thus, there are less payments in terms of indicators, but the taxable base is wider due to the fact that they control almost every machine.
In our country, the legislator has made a mix of the Georgian and Belarusian approaches, combining them in one bill. There are very high royalties and an online monitoring system as well as income tax. All this together creates an explosive mixture that pleases neither domestic nor foreign investors."
But there is a hope that common sense will prevail. Because if the law is adopted “for show”, this is not the option that, objectively, everyone needs. After all, it is necessary to launch the economy, economic processes, related business, create workplaces. To do this, you need to live by realities and understand what economic situation Ukraine is in, what the purchasing power of the population is.
“And I'm not even talking about the features associated with the coronavirus and restrictions. And that the gambling market, if it opens, will do it in the midst of restrictive measures, which will also directly affect performance, investment and profit. Therefore, people need to go down to earth. In this we see a common sense.
If an unviable format is adopted, then it will remain so. If we have a shadow or gray component, then all these corruption risks, which should have already ended with the acception of the law, will not go anywhere and “our song is good, start from the beginning”. But we hope for common sense, which should prevail. "
