Ukraine’s Parliament Passes Landmark Online Gambling Law
Ukraine’s parliament, the Verkhovna Rada, has voted affirmative on a sweeping new set of laws that will completely legalize online and land-based gambling across the Eastern European country.
The draft bill, known as 2285-D, passed with an overwhelming majority of 248 votes for to 95 against. It will be officially signed into law sometime next month.
Ukraine previously had a legal land-based market. However, the death of ten people in a tragic fire at a gaming hall in the city of Dnipro in 2009 was the last straw in a building swing of negative public and legislative opinion on gambling.
This new set of laws will see land-based casinos and sports betting outlets legalized, along with online casinos and sportsbooks.
Not too many details have been confirmed as of yet. One thing we know is that the minimum legal gambling age will be raised to 21.
It’s also been reported that land-based casinos will only be allowed to operate in conjunction with existing hotels.
Time in the Making
Part of the reason we don’t know too many details on the new legislature is that an estimated 3,000 amendments have been tabled since the first draft of this bill passed in January 2020.
It was originally proposed in late 2019 but failed to pass Parliament the first time. One administration even promised to have a legalized gambling bill passed back in 2017.
With all those amendments, though, a new legal market was sure to stand a better chance this time.
Another factor may be the ongoing COVID-19 pandemic, which has killed hundreds of thousands and caused economies around the world to come crashing down.
During such a time, the extra tax revenue online gambling companies can bring to a country may be more attractive than in times of prosperity.
In this case, gambling business advocates have long maintained that a legal market in Ukraine today could be worth some $200 million in taxes per year.
What We Do Know
License fees will be set at a cool UAH30.7 million ($1.1 million) for online casinos. This amount will be payable every five years.
The bill also confirmed that tenders would be open to foreign online casino and sportsbook operators.
However, one interesting clause in the legislation is much more political in nature.
“All operators and game suppliers, online and offline, must not be controlled by residents of an occupying state and/or the aggressor state in relation to Ukraine.”
This, although not confirmed, is seemingly an attempt to stop Russian gambling operators from entering the country’s new market after the country’s not-so-clandestine annexation of the previously Ukrainian-owned Crimean peninsula in 2014.
Tax Matters
The next step for the Verkhovna Rada is to decide on a tax structure for the new market. Various options to be voted on include:
- 10% for online gaming revenues and 5% for land-based casinos
- Flat 25% tax on all gambling businesses
- No extra gambling taxes (just licensing and standard income tax)
- 12.5% for online gambling, 7.5% for offline
According to reports, the first option (2713-D) looks the most likely to pass at this stage.
However, with Ukraine’s track record of delays and long debates on these issues, we aren’t holding our breath for a resolution any time soon.
There’s also the matter of who appoints the regulators and what any new gambling regulator would look like.
Legal experts in the Parliament have already stated that the current plan for selecting regulators is not constitutional and may be challenged in the courts.
Prepare for the long haul on this story. However, we’re here to keep you updated on this and other regulatory news, no matter how drawn out.
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