UKRAINE

What are the Odds of Ukraine legalizing gambling in 2018?

The ban on online gambling is not effective, thus online casinos operate freely in Ukraine. At the same time, the government promised the IMF to legalize gambling before the end of 2018. Is it worth waiting for legalization this year? According to Ksenia Zivirko, a journalist of 112 TV channel, experts are skeptical.

Gambling in Ukraine is prohibited by law since 2009. In 2011, the parliament banned online casinos as well, regardless of the location of the game server. However methods of control are ineffective: gambling websites are still there but pay no taxed. According to the calculations of the Ministry of Finance, gambling could bring at least UAH 5 billion as additional tax revenues, and the share of online casinos in this segment is about 20%.

More than 50 Russian-speaking gambling websites formally forbidden in Ukraine and working under the international gambling licenses. “Theoretically, it would be possible to limit access to online casinos in Ukraine, but internet providers would need to purchase equipment worth about $ 2 billion”, Dmitry Sizov, editor-in-chief of InternetUA, says.

Ban on gambling in Ukraine is bypassed both technically and legally via lotteries, which are the only allowed type of gambling operations in Ukraine. There are only three legal lottery operators: “Ukrainian National Lottery” (“UNL”), LLC “Patriot” and LLC “MSL”. According to the Anti-Corruption Committee of Ukraine, license period expired in 2014, but these companies are still working on legal grounds, allegedly being in the process of obtaining a new permit. As lottery operators, they provide sports betting services, although bookmakers are also banned in Ukraine.

About a dozen of bills are waiting for revision in Ukrainian parliament. The newest one was registered in 2016. Some of the bills have not been reviewed and analyzed by committees, some have not been approved by the Antimonopoly Committee. According to experts, the rules prescribed in the draft laws may lead to monopolies and a negative business climate. For example, in the draft of Law No. 3632, it was suggested that only one operator should get the license. During the registration of the bill in 2015, UNL was only one operator of the lottery market, because “MSL” and “Patriot” were included into the sanctions list (and excluded only in May 2018).

According to the memorandum with the IMF, Ukraine promised to legalize gambling until the end of 2018. “This requirement still has chances to be fulfilled. It is quite possible that the ban will be cancelled and appropriate gambling law will be adopted for control, accounting and taxation. However, it is unlikely that effective legal regulation of gambling industry will be provided in the terms promised in the memorandum. Most likely, a package of laws will be adopted just as a demonstration, sufficient enough just for reporting to the IMF to receive credit funds on the threshold of the upcoming elections campaign, ” Sergei Senik, Worldwide LEX law firm managing partner, comments.

 

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