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Legal land-based gambling sector is on the verge of closing

Ukrainian Gambling Council and legal gambling organizers in the land-based sector CASINO PREMIER PALACE LLC, VOLNA 4444 LLC, BILLIONARE CASINO COMPANY LLC, NEBULA GAMES LLC, GAMEDEV LLC, STORM UKRAINE LLC, EMPIRE OF EXCITEMENT LLC, KHARKIV PALACE CLUB LLC, ROYAL LLC submitted a collective appeal to Denys Shmyhal, the Prime Minister of Ukraine, and all representatives of the state agencies involved in the formation and implementation of the general state gambling policy regarding the adverse consequences for the industry of the adoption of draft resolution of the Cabinet of Ministers of Ukraine "On Amendments to Clause 1 of Resolution of the Cabinet of Ministers of Ukraine No. 314 dated 18 March 2022."

The draft resolution proposes to deprive legal gambling organizers only of the right to postpone payment of license fees, which actually discriminates against them. After all, according to the provisions of Resolution No. 314 adopted by the Cabinet of Ministers of Ukraine in March 2022, terms of valid licenses (for all types of business, including gambling) are automatically extended for the period of martial law and for three months after the day of its termination, and periodic, regular payments for licenses are postponed for the specified period.

According to the amendments made to the Resolution, land-based gambling organizers must pay all license fees for 2022 and 2023 within 30 days. Given the fact that the State Online Monitoring System (SOMS) was never put into operation in 2022, and draft law No. 2713-Д adopted, according to which the license payments actually paid in the threefold amount in 2021 were to be counted as future payments, the organizers, having paid three times the amount of licenses in 2021 (besides, all license obligations for 2021 were fulfilled!), are obliged to pay three times the amount of license fees again for 2022.

However, companies are not able to perform their obligations in full, because the land-based sector suffered the most due to the war. In 2022, the organizers had to suspend the operation of all gambling establishments for an average period of 5 months; 15 companies out of 19 that worked offline reported a temporary suspension of gambling establishments, and the total number of casinos and gambling halls that had to temporarily close is 45 out of 61 gambling establishments.

Having recovered from the shock in the beginning of the full-scale invasion by Russia, the organizers had to adapt to new harsh conditions: a significant decrease in the income of citizens, complete stop of to the tourist flow, curfew restrictions, air raid alarms, lack of electricity, and irreversible loss of assets in the occupied territories.

However, the gaming businesses did everything they could to keep operating, keep as many jobs and pay taxes. In addition, the organizers of the gambling businesses directed hundreds of millions of hryvnias to support the Armed Forces of Ukraine and the people.

Due to the introduction of changes in this resolution, the legal land-based gambling sector is on the verge of closure, so the organizers propose to take a set of measures to preserve the gambling market and ensure that the state budget receives the maximum possible revenue.

In order to save the legal gambling sector in Ukraine, gambling organizers propose to create a platform for dialogue in the "Government + Business" format. After all, despite the above, the gambling business is still ready to fund the state budget, especially during the war. However, the reality should be taken into account: in particular, Ukraine has the largest license payments in Europe, and at the same time, Russia is waging the largest mainland war against our country since the World War II.

Therefore, representatives of the legal gambling business propose the following for the period of martial law:

– Amend Resolution No. 314 of the Cabinet of Ministers of Ukraine and increase the terms of payment of license payments to 180 calendar days.

– For the period of martial law, establish the license fee to organize and conduct gambling in gambling establishments of casinos for the city of Kyiv in the amount of 18,000 (eighteen thousand) minimum wages and 9,000 (nine thousand) minimum wages for other settlements (except the city of Kyiv).

– Envisage that for the period of martial law, license fees for slot machines shall be paid at the base rate regardless of the terms of introduction of the State Online Monitoring System. In particular, Part 3 of Chapter XI of the industry specific law shall not be applied.

– Establish the possibility of payment by the organizers of license fees for every three months of the validity of the license.

Organizers of the gambling business are convinced that the performance of the above items will help the state to preserve the legal gambling sector, and it will continue to replenish the budget, which is important in these extremely difficult times.

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