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Changes in lottery legislation are one of the key priorities in combating illegal gambling business

The effective countering illegal gambling is one of the main conditions for the development of the legal gambling market in Ukraine. Illegal businesses can be divided into two main camps: online and offline gambling operators that do not have the appropriate licenses, and lottery operators who imitate gambling without having even lottery licenses. Combating the latter is no less important than "classic" illegal businesses. In order for this fight to be effective, it is necessary to improve the relevant regulatory legislation.

I have repeatedly mentioned that the activity of lottery operators causes significant damage to legal organizers of gambling games, as it creates unequal conditions on the market. Simply put, lottery operators do not buy expensive gambling licenses and simulate gambling on their web-sites and other online platforms using loopholes in the legislation.

In addition to that, they cooperate with land-based illegal businesses and, under the guise of lotteries, actually simulate gambling on slot machines in illegal gambling halls. From 2013 to the end of 2019, lottery operators organized a network of "instant lottery halls", which included more than 3,000 facilities sometimes. Without a control mechanism on the part of the state, such a situation may repeat itself.

In order for this not to happen and for lottery operators to finally stop imitating gambling, even without paying the corresponding license fees, a number of legislative changes should be adopted.

Firstly, lottery operators have run instant lotteries that duplicate gambling for a long time. The ban on the organization of "Internet cafes" with access to lotteries should also apply to the web-sites of lottery operators, in particular state ones, since currently there is an exception for them in the legislation.

Second, it is necessary to strengthen the control over state lotteries and give the authority to a relevant authorized body, in addition to entering lotteries in the Unified Register of State Lotteries, to deny operators entry to the register of lotteries. Currently, the legislation obliges the authorized body to enter lotteries in the register within the prescribed period after receiving the relevant submission from a state lottery operator.

Third, the effective legislation does not limit the distribution of instant lotteries over the Internet. At the same time, this type of lottery in the classical sense does not need to be distributed online at all. However, lottery operators actively use this loophole in the legislation to conduct online instant lotteries, which is actually an imitation of gambling on slot machines. Therefore, appropriate restrictions should be introduced.

Fourth, the legislation currently prohibits the reproduction in any form of the process of spinning the wheels, which resembles the process of drawing on a slot machine. However, not only the reproduction of the process of spinning the wheels, but also any other drawing processes that bear resemblance to the drawing process on a slot machine should be prohibited.

Fifth, the responsibility of lottery operators for violation of license conditions should be strengthened and the criteria for revoking lottery licenses, which are currently limited by law, should be expanded. Legislation in the field of unscheduled inspections of lottery operators' activities should be strengthened as well.

These legislative changes are of a technical nature, but in practice they address a strategic issue for the legal gambling market in Ukraine. Depriving lottery operators of the opportunity to imitate gambling, in addition to improving the competitive environment in the legal gambling market, will also increase state budget revenues, as it will force lottery operators that want to continue to provide services on the organization and conduct of gambling to purchase appropriate licenses.


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