The outgoing year past year has been extremely difficult for the domestic legal gambling market. Unfortunately, the overwhelming majority of problems that has actually put licensed gaming operators on the brink of survival in 2023 are not related to hostilities, but to the activities of owners, high ranging persons, black market lobbyists, and operators of banking financial services.
A special charm is provided by law enforcement officers, who continue to "ignore" the operation of hundreds of illegal websites in the online gambling sector, even given the fact that both the largest specialized association that unite legal gambling organizers, the Ukrainian Gambling Council (UGC), as well as the national regulator, the Commission for the Regulation of Gambling and Lotteries (CRGL), provided previously collected information on the activities of such websites. Currently, there are more than 1,200 websites that offer illegal gambling services in Ukraine. And CRGL revealed more than 2,000 illegal gambling web resources. However, this did not become the pretext for the appearance of several thousand cases against illegal online gambling organizers.
Regarding the work of the banking sector against operations in the field of legal gambling and facilitating the activities of illegal businesses, we should highlight a rather strange pattern, which is manifested in the fact that banks block payments from players for the benefit of legal organizers and in the reverse direction, from organizers to players. At the same time, payments for the use of illegal lottery operators are not considered risky and are not subject to blocking. Many media regularly wrote about the so-called miscoding in legal gambling, but almost no one mentioned the illegal work of lottery operators and the fact that there are no problems with crediting to their accounts of funds using the banking system. Have they "failed to notice" this again?
In addition to that, in the fourth year of the reform of the gambling sector in Ukraine, the issues of organizing the tax legislation, used terminology and determining the unequivocal interpretation remain unresolved. For example, the latest changes regarding the taxation of the only type of gambling, which surprisingly survived and felt free during the legal ban on gambling, namely lotteries, were introduced into the Tax Code back in 2016. Currently, its provisions do not comply with the Law of Ukraine "On State Regulation of Activities Regarding the Organization and Conduct of Gambling" adopted in 2020. This non-conformity is caused by duplication of tax burdens, uncertainty of the status of the taxable part of winnings and the income base of legal gambling organizers. And this stands in the way of entering the Ukrainian market by large Western companies and their investments.
Separately, it is worth mentioning the legislative initiatives aimed at slowing down the reform and eliminating the white gambling market, such as Draft Law No. 10101 "On Introducing Amendments to Certain Laws of Ukraine Regarding Improvement of Legislation in the Field of Organization and Conduct of Gambling and State Lotteries," which is lobbied by Mr. Hetmantsev and a number of MPs. The provisions of this document envisage the legal possibility for lottery operators to engage in the organization of all types of gambling without paying for a license for the relevant type of activity, without mandatory compliance with legal provisions regarding the restriction concerning the location of gambling establishments in hotels only and without the tax burden imposed on legal organizers in the gambling market. Its adoption can bury the entire legal sphere of gambling and leave the state budget without tax revenues and payment for licenses.
Thus, the legal gambling sector enters 2024 in a quite tense condition, and is waiting for adequate state decisions that will determine its future fate. We can only hope that it will be better than this year.
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