Ukraine gambling regulation bill moves to second reading

Ukraine’s parliament has greenlit passage of a broad base gambling and sports betting bill to a second reading by the Verkhovna Rada.

Representatives of the Verkhovna Rada Committee on Finance, Tax and Customs Policy voted to approve bill 2285-D on 3 June, following the initial reading and passage of the bill to committee stage in January.

Finance, Tax and Customs Policy committee member Andriy Motovilovets said the group had unanimously supported the bill and called on the rest of the Verkhovna Rada to follow suit.

“We are fully ready for the second reading,” Motovilovets added.

However, it is understood that several unpublished amendments have been made by the committee to the legislation, which could slow down its passage through a second reading.

Parimatch head of legal Ievgeniia Derbal hailed the progress made on the bill but called on legislators to remember the objective of developing a fair and transparent sports betting industry.

“There are many elements of the bill in its current state which will help to develop a framework for the industry that is in line with best practice international standards.

“There are also some aspects of it which we believe will undermine the industry, such as the overly punitive tax code and an ill-considered online monitoring system,” said Derbal.

“These need to be addressed to provide clarity and a fair opportunity to international operators. We have waited 10 years to legalise the industry in Ukraine and we are now entering the critical moment to ensure it has a viable future,” Derbal added.

Bill 2285-D initially called for the development of an online real-time monitoring system to provide information on player bets, deposits and winnings, similar to those currently being used in neighbouring Russia and Belarus.

Addressing the development of a similar system in Ukraine, Derbal highlighted the resources and personnel requirements of creating such a platform, including staff training at the Ukrainian tax service.

“Alternatively, the system could be operated by a private company at an expensive cost to the taxpayer. This would also make operators nervous that the confidential information that they are sharing could fall into the wrong hands through cyber-threats or corruption,” Derbal claimed.

More than 3,500 amendments have been made to the bill since it passed through a first reading in January. Since then, the Ukrainian government has issued 89 court orders to Ukrainian internet service providers to block popular sites including partypoker, CloudBet and Pinnacle.

The taxation of operators has still to be agreed and requires the passage of separate legislation.

In addition, the make-up of the new Ukrainian gambling regulatory body has yet to be confirmed.

A final vote on the bill is scheduled to take place within the Verkhovna Rada on 16 June.