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Amendments to the lottery legislation

The legal gambling market recently celebrated only its third anniversary and is still quite young and vulnerable to various schemes used to imitate the activities of gambling companies.

One such scheme provides for the creation of fake online casinos that offer players the opportunity to gamble, despite they actually have no license and do not ensure the security of monetary transactions.

However, the problem is not just the presence of illegal business. Such imitation, unfortunately, is sometimes stems from the gaps in the legislation that were not eradicated by introducing relevant amendments by the Parliament due to the war. First of all, this is noticeable in the online gambling segment, the operation of which remains insufficiently organized and regulated.

For example, using the effective provisions of the Law of Ukraine "On State Lotteries in Ukraine", lottery operators provide bookmaking services under the guise of Toto lotteries, and reproduce the operation of slot machines under the guise of online instant lotteries. The use of combined lotteries allows them to organize an almost full-fledged online casino.

This leads to making legal gambling operators, which invest significantly in obtaining licenses and ensuring high quality of their services, unable to compete with lottery operators that do not purchase gambling licenses, do not bear the appropriate fiscal burden and do not comply with player safety standards.

Such quasi-lottery activities can lead to an increase in the number of players suffering from gambling addiction (ludomania), because lotteries usually offer and are heavily advertise "high odds" of winning large sums of money for a small ticket price.

Therefore, it is necessary to change the legislation and prohibit the imitation of gambling that are conducted under the guise of lotteries. For this, first of all, changes should be made to the current legislation, which would more accurately distinguish the activities of lottery operators and types of lotteries from the activities of gambling organizers. These changes can be conditionally divided into three categories:

- Arrangement

- Restrictive

- Punitive

The first category should include changes regarding the acquisition of the status of a lottery operator from a declarative one (regarding the conditions of its conduct) to a registered one (regarding compliance with licensing requirements and making relevant payments to the state budget of Ukraine).

The second category includes the introduction of a number of prohibitions, in particular regarding the following:

- Online distribution of instant and combined lotteries that have features of instant ones.

- Reproduction in any form of the drawing process, which externally imitates the drawing process on a slot machine.

- Conducting state lotteries that have signs, in particular visual, of casino gambling (cylindrical games (roulette), dice games or slot machine games).

The third category includes the establishment of irrevocable responsibility for market operators for repeated violations of license conditions within a year from the moment of the previous violation in the form of withdrawal of licenses to operate.

Adoption of these changes will allow arranging the activities of the gambling and lottery market and provide a larger amount of revenue to the state budget.


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