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A year for the gambling business of Ukraine. How does the market work?


On July 14, 2020, the Verkhovna Rada of Ukraine adopted the law "On state regulation of activities for the organization and conduct of gambling." Gamingpost.net remembered what happened this year. And what changes are still waiting for the legal Ukrainian gambling market?
  • Gambling legalization
  • 2021-07-22 11:03:40
  • 24
A year for the gambling business of Ukraine. How does the market work?
CHRONICLE

On July 14, 2020, the Verkhovna Rada of Ukraine adopted a law on gambling. A month later, it entered into force. Two months of the formation of the regulator - and on October 22, 2020, by way of additional due to quarantine restrictions, the Commission for the Regulation of Gambling had a head. It was Ivan Rudy. Already at the end of November in the draft budget for 2021, the people's deputies prescribed that the gambling business will bring Ukraine 7.4 billion hryvnias.

Licensing conditions for gambling operators were adopted on New Year's Eve - they entered into force on December 30, 2020. And the first license to conduct gambling was issued by KRAIL on February 2, 2021. It was received by the SpaceX company, which represents online casinos under the Cosmolot brand.

On March 12, 2021, the first land-based casinos in Lviv and Odesa received their first licenses.

“The process itself was lengthy. We are one of the first to go through the preparation of all the necessary documents, correct wording, collecting all the necessary data to apply for a license. Our team of lawyers literally sat day and night and prepared all these submissions. So we cannot call the process easy for sure, but we are very glad that in the end we already have a number of licenses,”- said representatives of First.

But the issuance of the first licenses for activity does not mean the beginning of the market. Operators are required to obtain a license for each slot machine, roulette, table and shuffle machine by law. The list of equipment for certification was adopted on April 10. On April 19, KRAIL determined the list of certification subjects - those who can certify gambling equipment.

On April 23, KRAIL issued the first B2B license. This has opened up a new direction for companies that want to provide their services in the field of gambling. A few days later, the Gambling Regulatory Commission issued the first licenses for gaming equipment. And on May 14, the first land-based casinos announced their opening.

RESULTS

Casinos or gambling halls can open in 48 hotels in 21 cities of Ukraine. All hotels receive a special permit from KRAIL.

The Gambling Regulatory Commission has issued 24 operating licenses. Five land-based casinos, eleven online casinos, one bookmaker, five brands of slot machine halls and two online poker organizers can legally operate in Ukraine.

Ground-based casinos have been opened in Kyiv - these are Billionaire at the InterContinental Hotel and Shangri La at the Fairmont Hotel. Prepares for the opening of a casino at the Premiere Palace hotel. In Odesa, the First casino operates in the Gagarinn hotel, and in Lviv, the casino of the same brand is opened in the Grand Hotel Lviv.

The slot hall “Gambling Club Lord” and “Slots City” are already operating in Kyiv. The rest of the slot machine halls of this network are being prepared for opening in three more cities of Ukraine. Equipment licenses are also awarded to First, First Ray and Win halls.

BUDGET

The State Treasury Service of Ukraine reported: from payments for licenses to conduct gambling, the budget of Ukraine received 719.4 million hryvnias.

In addition, KRAIL has issued eleven B2B licenses. Nine companies have already paid for them, which brought an additional 16.2 million hryvnias to the state budget.

But even if we summarize budget revenues from all licenses, they will amount to less than 10% of the planned amount of 7.4 billion hryvnias for the year. It is impossible to reach such a figure - explained the head of UGC Anton Kuchukhidze to gamingpost.net.

“During the preparation of the draft budget, calculations were submitted to the relevant state bodies about the figure of 7.4 billion hryvnias, which included the concept of income from license fees for conducting activities, plus all types of taxes. And the deputies voted in such a way that the budget requires UAH 7.4 billion from license fees alone. The operator has the right to pay not immediately for five years, but, for example, for a year, for two or three. So far, it is clear that it is impossible to replenish the budget by UAH 7.4 billion only through licenses. On average, 1.5 billion, maybe a little more,” - says Anton Kuchukhidze.

PROBLEMS

The attention of the entire market is directed to the adoption of bill 2713-d. The thing is that this document normalizes taxes for the gambling business. Under the current tax code, double taxation is in effect, and such a concept as "online casino" is not spelled out at all.

Bill 2713-d equalizes GGR tax rates for all types of gambling business to 10%. Establishes the threshold from which the tax on winnings is withdrawn - this is 48 thousand hryvnias. The bill also repeals the current triple license. Without the adoption of the bill, taxes will not come to the budget from the gambling business, explains Boris Baum, first deputy of the Advisory and Expert Council at KRAIL.

“There will be no tax revenues this year due to the fact that tax changes have not been adopted. Indirect budget receipts, which are calculated in our repairs, in the construction of hotels, in hotel renovations, in secondary services, in additional salaries, in personal income tax, in advertising, and so on - these amounts amount to tens of billions of hryvnias. This is something that no one sees,” - says Boris Baum.

Bill 2713-d was put to a vote for the first time on June 3. Then, before its adoption in the first reading, 9 votes of people's deputies were not enough, and the bill was sent for revision to the committee. Three weeks later, the relevant committee introduced amendments to the bill. The people's deputies were supposed to re-consider 2713-d in the hall of the Verkhovna Rada on July 14, but they did not have time to reach the bill.

Operators of the Ukrainian gambling market are also concerned about the tax on winnings. They believe that if such a tax is left, then foreigners, who are very much expected here, will not come to Ukraine.

“If a tax on winnings is introduced, it will mean the end of the gaming industry in Ukraine. And if not the end, then a complete loss of the potential of the Ukrainian market for international players. Then gambling will go underground again. Nobody wants to play in a casino that has to pay 19.5% for whatever you win. This is ridiculous. What happens if the player loses, will the government give him 19.5% of everything that he loses? Of course not. Therefore, the tax on winnings is unfair,” - says Michael Boettcher, founder of Storm International.

In addition, gambling market operators are awaiting the adoption of technical regulations. It is necessary for a convenient and understandable certification of equipment. The technical regulations are awaiting amendments from the working group. In the same groups, a new classifier of professions is being developed. Now in Ukraine, professions that are simply not spelled out in the labor code are legal.

“This is a very big difficulty. We have fully official employment. When we try to find a name in the classifier of professions that would correspond to a person's position, for example, head of risk management or a verification specialist, it can be very difficult. We have to look for alternatives from the banking sector that have something in common. The fact that the classifier of professions has not been updated for a long time creates difficulties in the design of people. But in fact, the position may sound one at a time, but within the company we understand what exactly the person does,” - says Maria Atrasevich, HR manager at Vbet Ukraine.

KRAIL launched a registry of gamblers in test mode, where relatives or players themselves can enter the data of those who need to be restricted from playing. Earlier, Boris Baum stated that there were only three appeals, but the applicants never reached the Commission to identify their identity.

The gambling market participants consider illegal advertising and the fight against immigrants as a separate problem. KRAIL is developing an interactive map.

“An interactive map will be created on the KRAIL website, where it will be like a quest: find an illegal hall and declare it. If three times there is no reaction of law enforcement agencies to this place, they will be criminally liable. The person who works in this area,” - says Boris Baum.

The material is especially for Gamingpost.net.

 

The gambling portal gamingpost.net monitors the process of legalization of gambling in Ukraine. Read the latest news: "Approval of a tax law is vital" - Igor Makievsky on Bill 2713-d, taxes on winnings and gambling income

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