It is difficult to imagine a greater risk for an investor than a war in the country where he/she plans to invest. Nevertheless, Western investors continue to show significant interest in the legal gambling market of Ukraine. This is especially relevant for the online segment. Currently, several powerful players are considering Ukrainian online gambling for investment. However, there are several "buts" that still prevent investors from switching from plans to actions.
You don't need to graduate from the London School of Economics to understand that the legal gambling market in Ukraine has serious investment potential and opportunities for development. It is sufficient to look at the conditions in which it developed from the very beginning of its existence and the results it managed to achieve, in particular from the viewpoint of providing revenue to the state budget.
Even in the current situation, when the country is in a state of full-scale war, there are still a number of sector-specific investors interested in investing in the Ukrainian segment of legal gambling. Despite this interest may seem strange upon superficial analysis, from the point of view of the long-term perspective it looks quite logical.
After the victory of Ukraine and the defeat of russia, the regional market of legal gambling will need a new leader. Considering how popular Ukraine is today, and what prospects for post-war recovery it has, we will undoubtedly claim political and economic leadership in the region. Those investors, who are not afraid to invest money in the post-war Ukrainian economy first, in particular in the gambling segment, will definitely have a competitive advantage over companies that will come later.
However, in addition to security challenges, the Ukrainian legal gambling market still has a number of regulatory shortcomings that make investors refrain from investing:
1. Issues related to taxation and the introduction of a unified state online monitoring system (SOMS) have not yet been resolved. This complicates the regulatory environment of the market making it less attractive for foreign investors. This should be resolved as soon as possible. Conditions for this exist, only political will and a few simple steps are needed.
2. Despite certain successes, the systematic fight against illegal businesses still remains a significant challenge. The activity of illegal gambling businesses creates unequal working conditions, which certainly repels investors. Moreover, in the online segment, some illegal organizers connected to russia still operate, which does not contribute to the attractiveness of the market.
3. The existence of a separate regulator is a standard practice for civilized Western markets, which did not embrace the policy of transferring the regulation of gambling to the jurisdiction of already existing authorities. Therefore, Western companies do not understand why they attack the national regulator, the Commission for Regulation of Gambling and Lotteries, which has demonstrated high efficiency in providing revenue for the state budget and continues to build a dialogue with legal business in extremely difficult economic and political conditions. Attacks on the regulator increase the instability of the national market in the eyes of investors.
Even in the conditions of war, the Ukrainian legal gambling market continues to operate. Legal businesses pay taxes and license fees, websites of illegal businesses are blocked, Commission for Regulation of Gambling and Lotteries continues to monitor the fulfilment of obligations undertaken by businesses, legal organizers continue to support the army and society. These are all important steps, but they keep the market operating while fundamental regulatory and tax changes are needed to improve working conditions for all and increase transparency. This is exactly what will help us to attract foreign investors to national gambling even now, when the country is still at war.