The ban on legal gambling advertising provides endless opportunities for black market gambling advertising. This was clear to all experts in both advertising and gambling. They wrote about it, talked about it, warned about it. However, the authorities apparently decided that "what's new is well-forgotten" and used the age-old bureaucratic principle: if you don't know what to do, you need to use a ban.
It's been a month since the advertising of legal gambling market organisers was banned in Ukraine. What has changed since then, who won and who lost? Let's summarise the first results.
Firstly, traditionally, anything that is prohibited arouses increased interest. That is, the interest in gambling has not decreased, but has been gradually growing at this time. It is difficult to say whether this will be a long process. Probably not. However, there is definitely a temporary revival. And since there is no advertising of white market representatives, potential players in their search end up on the resources of illegal gambling operators, where they stay to play. After all, the volume of advertising by illegal operators has not decreased, but only increased, and there is no competition for them now.
Given the fact that even before the ban on advertising, there were at least 100 illegal gambling sites for every legal gambling site in the Ukrainian Internet segment, the first beneficiaries of the ban on legal advertising can be identified without even looking for them. These are the representatives of the black segment of gambling.
Secondly, the reduction in advertising budgets of media outlets that worked with legal gambling organisers had a negative impact on the media market, which is currently surviving as best it can during the war.
Thirdly, on the eve of the Summer Olympics to be held from 26 July to 11 August 2024 in Paris, our athletes have lost some of their sponsorship, which is also advertising. It's hard to say how this will affect their performances, but we can definitely predict that such losses will not motivate them, but rather the opposite.
Fourthly, a decrease in the number of people using the services of legal gambling organisers and the flow of financial resources to illegal gambling operators will hit budgets at all levels, as illegal gambling operators do not pay taxes.
And that's not all. Since lotteries in Ukraine have not been considered gambling for the second decade in a row, and their activities are regulated by a separate law, we have seen an increase in advertising and other activities of lottery operators. In particular, one of the country's major fuel retailers has a permanent "Play and Win" sign at its petrol stations.
I would like to remind you that, unlike legal gambling companies, lottery operators pay much less taxes and licence fees. Therefore, the growth of their activity will not fill the state and local budgets, but it will definitely increase the income of their owners.
In general, a ban on gambling advertising can lead to changes in consumer habits, demand for entertainment, and the popularity of gambling in society. And such a ban will exclusively benefit the black market, reducing state and local budget revenues and lining the pockets of criminals.
I would like to remind you once again that government regulation is not a ban on business activities, but rather monitoring compliance with the conditions of integrity and legality of business.
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