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Legal gambling organizers continue to pay license fees

The Commission for Regulation of Gambling and Lotteries (CRGL) continues to receive license fees from legal gambling operators. Thanks to the systematic work of the regulator, legal gambling provide revenue to the state budget despite the challenges of the war and the difficult economic situation. The result of the joint efforts of CRGL and business was the provision of UAH 1.163 billion of revenues to the state budget for just 8 months of 2023.

From the very beginning of the war, many "experts" predicted the rapid disappearance of the legal gambling market in Ukraine and the collapse of the reform. However, legal gambling operators not merely persevered; they continued to pay taxes and license fees. Many brands have kept their business afloat and also actively provide funds to help the army and society repel the Russian aggression.

Fulfilment of the state budget indicators was a vivid example of the stability of the legal gambling business last year. The treasury received UAH 1.166 billion, which was 98% of the planned amount. It is worth noting that the state budget was estimated without taking into account such a risk as war. That is, the legal organizers actually showed the pre-war rates of development of the industry during a full-scale war. Thus, the entire economic sector not only survived; it was able to prove its ability to fulfil its obligations to the state in extremely difficult conditions.

UAH 1.596 billion of revenues from the gambling sector are planned for 2023, which is more than 25% more than the similar amount for 2022. However, despite the frank scepticism of many politicians regarding the fulfilment of financial obligations by legal gambling organizers, they already paid license fees in the amount of UAH 1.163 billion as of 1 September 2023, which is more than 73% of the planned amount.

It is interesting that the stable providing of revenues to the state budget occurred against the background of the actual blocking of the CRGL's operations. Only on 8 August this year, the Commission was able to hold a meeting for the first time after forming the appropriate quorum. All this speaks of three important characteristics of the market, which were clearly outlined in this crisis period:

1. An effective system of relations between legal gambling organizers and the CRGL was established. Thanks to this system, the market functioned and paid license fees even when the actual powers of the Commission were effectively blocked. That is, the market functions without the need for "manual management" by CRGL, and therefore is relatively stable.

2. New companies that receive licenses appear on the market. Big brands continue to adapt their own business to the realities of war, offering new online products for players. That is, the market held up and even continues to develop.

3. The market has much more potential than it might have seemed when gambling was legalized 2.5 years ago. The trials of war, attacks by illegal businesses, and the imperfection of tax and regulatory legislation have clearly proven this. Therefore, provided these challenges are overcome, the pace and scale of development will be much stronger.

The fact that the legal gambling market has survived is a joint achievement of the Commission and the legal gambling organizers themselves. However, despite all the successes, a number of issues still remain, the final solution of which lies beyond the competence of CRGL. Therefore, adoption of draft tax law 2713-д and the introduction of the State Online Monitoring System should be the next steps. Only if these two key conditions are fulfilled, it will be possible to talk about further prospects for the full development of the legal gambling market and effective countering illegal gambling businesses.


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