Ukraine formalises new gambling regulator

Ukraine’s government has set out the formal regulatory powers of the country’s new gambling commission ahead of its expected launch later this year.

At an extraordinary meeting of Ukraine’s cabinet ministers, legislators conferred several new powers in areas including licensing, responsible gambling and the administration of the still-to-be-created centralised database for gambling tax.

A working group headed by Vice Prime Minister of Ukraine – Minister of Digital Transformation Mykhailo Fedorov was established to develop bylaws necessary for the launch of the ‘Commission for the Regulation of Gambling and Lotteries’, which is expected to formally launch in November.

The commission has been tasked with creating “favourable organisational and economic conditions” for attracting investments from gambling operators in the new regulated Ukrainian market.

Part of this duty involves ensuring a level playing field between prospective operators.

The commission retains responsibility for licensing operators, establishing procedures for testing of operator products and can sanction operators where violations of Ukrainian gambling law are identified.

It also carries responsibility for setting out online monitoring system requirements and the development of the system, which is expected to go live no later than two years’ time.

The commission’s mandate includes establishing principles of responsible gambling across the new Ukrainian market and working with international regulators on best practice procedures.

The commission will be structured hierarchically, with a regulatory CEO and a six-member advisory board.

Members will only serve four-year terms of office and will be appointed by the Ukrainian Cabinet of Ministers.

In addition, the commission will be supported by a separate office to cover day-to-day duties and has the ability to appoint both regional divisions and an advisory board.

The commission will be funded via Ukraine’s state budget.

“The launch of the Commission will make it impossible for illegal gambling establishments to operate under the guise of holding state lotteries,” Federov said.

And the legalization of gambling will stimulate the Ukrainian economy, attract investment, create additional jobs and receive a significant source of additional revenue to the State Budget of Ukraine,” he added.

Earlier this month, the Ukrainian government commissioned a new consultation-style information gathering exercise to obtain, collate and eventually transpose international regulatory advice and standards into its own regulatory model.

Former Dentons lawyer Ilya Machavariani has been hired to coordinate the process on behalf of the government and will deliver a final report to ministers later this year.

Speaking about the new regulator, Machavariani said: “Sometimes its hard to take the next step after a big achievement and it seemed like this might be the case following passage of the initial law. However, the momentum is still there with the new commission.

“This is a good sign for everyone looking at the market as I’d heard some concerns that the process might stall for a couple of months or even more.

“We need to wait for a little more before the regulator’s team will be formed – which would create much more certainty than we have today – but this moment is already very close, which is very good news.”

However, the issue of the taxation of licensed operators is still being debated by the Verkhovna Rada in a separate piece of legislation.