Gambling Legalisation in Ukraine

Ukraine has officially legalised gambling with the signing into law of the nation’s Gambling Act by president Volodymyr Zelensky on Tuesday.

The bill to legalise gambling was sent to the desk of the President after Ukraine’s parliament, the Verkhovna Rada, approved it on a second reading. It allows for the legalisation of online gambling, slot machine halls, land based casinos and bookmaking, although all casinos must be in hotels.

Licence fees will initially be set at €1 million for online gaming, which will be renewed every five years, but this fee is set to be tripled until the national Online Monitoring System can come into effect, which is expected within three years of the launch of the market.

An earlier version of the bill, proposed a ban on casinos advertising their services online or through third party marketing, but this was removed by the parliament’s Committee on Finance, Tax and Customs Policy. There are set to be ownership restrictions for licensees, including a rule that Russian residents and citizens are not allowed to act as either a shareholder or owner, while only legal entities registered in the nation of Ukraine will be eligible for an operating licence.

The bill was initially brought forward in October 2019 and although it failed to pass at its first reading in December 2019, it came through another vote in January 2020 thanks to amendments including a raising of the legal gambling age to 21.

The president has long been a proponent of regulated gambling in Ukraine and has previously given public support for proposals to allow gambling at hotels, in order to reduce the impact of illegal gambling. Following the initial rejection of the gambling bill, the president said that he would be enforcing anti-gambling laws more strictly, and there have been a number of orders from Ukraine’s courts, blocking access to numerous online betting sites.

Eastern Europe-facing gambling operator Parimatch has already confirmed that it will be seeking a licence under the new act. The Chief Executive of Parimatch, which was founded in Ukraine, expressed approval of the move to regulate Ukrainian betting:

“I would firstly like to congratulate President Zelensky for delivering on his pledge to legalize gambling in Ukraine. He has a shown that he is a man of his word and we fully support his agenda to liberalize the local economy. Parimatch has long argued that the development of a fair and regulated betting industry will really benefit Ukraine.”

There still remains a few hurdles to clear before the regulated sector can be launched, including a new tax policy for the industry. A range of options are currently under discussion, and many in the industry will be keen to ensure that tax rates are set at a competitive level.

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