Ukraine nears sports betting and online casino regulation
Sources claim government will sign bill into law on 4 June as debates continue into appropriate licensing framework
The Ukrainian government will rubber stamp a package of sports betting and online casino legislation on 4 June, EGR Intel has learned.
Sources close to the debate have said the government is currently working on the final make-up of the legislation, with two positions on licensing and taxation currently under consideration.
The first of these would see sports betting operators pay a €1m fee for a five-year licence, with operators taxed at 10% of gross gambling revenue (GGR) annually.
The second mooted option includes a licence fee of €3-5m payable every year without any GGR taxation applied. The framework for licensing of online casinos has not been revealed yet but is expected to be similar to the plans for sports betting.
In addition to debates over the licensing framework, EGR understands there are more than 3,000 edits to the bills final text currently to be discussed and approved.
The make-up of the new regulatory entity, the Ukraine Gambling Commission is still to be decided. However Ukrainian lobbyist and businessman Boris Baum has signalled his intent to head up the new body in the Ukrainian press.
Ilya Machavariani , lawyer at international law firm Dentons, cited the implementation of a taxation system based on GGR as being difficult for the newly regulated market.
“Theoretically speaking, any sane lawyer would support the GGR taxation approach as it is the most transparent and fair for everyone involved,” Machavariani said.
“However, in the Ukrainian case, I would go with a second approach for a couple of years and then try to implement a GGR taxation system later. It’s a new system and it would be highly difficult to implement such a tax from day one of the market launching,” Machavariani added.
Both options are currently being debated in the Verkhovna Rada and have provoked furious debate in the Ukrainian parliament.
Last week, the leader of the “Servant of the People” faction in the Ukrainian Parliament (which is the President Zelenskiy’s faction as well), David Arahamiya, claimed the law would be formally adopted by the end of May.
In an interview with local news outlet Interfax-Ukraine, Arahamiya said bill 2285-D could not be passed earlier due to questions about illegal gambling.
“A ban on gambling is not a method. Everyone says illegal gambling is bad, but nobody does anything.”
“We just need to cut these knots. Of course, by cutting them down, we will make mistakes and it is important to be aware of and correct these mistakes quickly,” Arahamiya said.
Mikheil Saakashvili, chairman of the Executive Committee of Reforms of the National Reform Council of Ukraine, also highlighted the potential for corruption in a letter addressed to the chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Danylo Hetmantsev.