What is happening to gambling regulations in Ukraine

For anyone who is interested in the Ukrainian gambling market there are currently two key processes to watch — the adoption of the Bill 2713-д amending the Tax code and the Gambling Law and the finalization of the re-staffing procedure of the gambling regulator — the Commission for Regulation of Gambling and Lotteries in Ukraine (CRGL).

In October, at a press conference, Boris Baum, the first deputy head of the commission’s consultation body — Consulting-Expert Council — shared his expectation of the Ukrainian Parliament to pass Bill 2713-д in the second reading around November 10. But despite the expectations from both the regulator and the business community, the bill is yet to make it to the Hall of Verkhovna Rada for the second reading.

The Bill 2713-д was primarily designed to amend the gambling taxation, but recently it was expanded to also fix the conflicting provisions in the Gambling Law that currently regulate the procedure for selecting and appointing the Head and the members of the CRGL.

Ilya Machavariani, senior partner & CEO at igaming consultancy firm 4H Agency and SBC Brand Ambassador in CIS region has shared his opinion on the possible reasons for the delay.

“From what it looks, the delay is not related to the doubts over the particular Tax Bill; it seems to be caused by unrelated events, although of grater magnitude and of more significant priority to the Government at the time.

The Bill has since made it to the Parliament’s agenda and is expected to be voted in its second hearing on Friday, December 3.”

As for the re-staffing of the Commission for Regulation of Gambling and Lotteries, on October 22, the Cabinet of Ministers of Ukraine initiated a selection procedure to appoint new members of the regulator. The procedure involves testing and interviewing the candidates to replace all members of the Commission, although it’s entirely possible for some of the current members to be re-appointed as members of the Ukrainian regulator.

The need to run such procedure is dictated by the temporary nature of the contracts with the current members of the commission (including its head, Ivan Rudyj) that are due to expire in December of this year.

The current members of the Commission were offered only temporary contracts as they were appointed via a special procedure initiated by the Cabinet of Ministers of Ukraine amidst the COVID-19 pandemic, when it got challenging to conduct full-scale selection procedures that required in-person meetings.

Thus, the temporary measures for selecting the government officials resulted in a duration limit for the contracts with the appointed officials.

With the duration limit approaching, the Cabinet of Ministers of Ukraine had to step up and initiated the procedure for re-staffing of the Commission.

It looks as the Cabinet of Ministers decided against waiting for the adoption of the Bill 2713-д to resolve the conflicting provisions in the Gambling Law that regulate the staffing of the CRGL, and relied on the provisions of the Ukrainian Law “On Civil Service” to initiate the procedure for selecting the members for the Commission. The selection is currently underway with the results are expected to be made public within a few days.

Besides the amendments to the Tax Code and the Gambling Law, and the re-staffing of the CRGL, the Ukrainian legal gambling market still has a long “to-do” list to complete as it lacks clear and transparent procedures to certify gambling equipment or monitor the activity of the licensed gambling operators, among everything else.

This week is shaping up to become one of the most significant weeks for the Ukrainian gambling market.

According to the session agenda on Verkhovna Rada’s website, the Ukrainian government plans to hear the Bill 2713-д on Friday, December 3.

This, along with the appointment of new members of the Commission for Regulation of Gambling and Lotteries will lead two of the key processes for improving the gambling regulation in the country to completion offering more liberal taxation for the gambling business, and staffing the regulator with carefully selected people, willing and able to lead the industry through a number of reforms to nudge Ukraine into becoming a thriving Easter-European gambling hub.