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Lotteries should finally start providing revenues to the state budget

The year 2023 is slowly coming to an end, and therefore it is time to draw conclusions, in particular for the gambling industry in Ukraine. If we look at the statistics recently published by the Commission for Regulation of Gambling and Lotteries (CRGL), we will see that, thanks to the joint efforts of the regulator and the legal gambling market, the targets of payments to the budget have been exceeded a month and a half before the end of the year. This certainly is a reason for optimism. On the other hand, this success makes us think about the amount of underpayment to the state budget due to the activities of illegal gambling businesses, particularly lotteries.

According to the budget plan for 2023, the state was supposed to receive UAH 1.596 billion of revenues from the payment of licenses by legal gambling organizers. As of 15 November, the budget has already received more than UAH 1.608 billion in license payments, which is 101% of the planned amount. That is, as I predicted at the beginning of the year, the legal organizers were able to perform the budget payment indicators, despite the war and the difficult economic situation in the country. In addition to that, there are still almost 1.5 months left until the end of the year, and therefore the level of exceeding budget payment indicators can easily increase from 1 to 5 or even more percent.

Just think about it - in the conditions of a full-scale war, we are talking about exceeding the budget indicators by the legal gambling sector. Such dynamics certainly inspire confidence that licensed organizers will be able to continue to hold the market and develop despite all the difficulties. On the other hand, these achievements once again emphasize how much the state does not receive due to illegal immigrants. This is another reminder that the budget is suffering losses due to illegal businesses that consider themselves "better" and "smarter" than others, because they manage to operate without license fees and taxes.

The situation with lotteries is the most interesting in this context, because 2023 has become the jubilee year - the tenth year when the state does not receive any license payments from them. In addition to that, lottery operators operate freely in the market, openly advertise their services, and even quite successfully and, of course, illegally imitate gambling on their online platforms and in underground gambling halls.

I will simply remind you how lottery operators organize and conduct gambling without the appropriate licenses.

1. They work according to KVED 92.00 code (organization of gambling), and manage to imitate bookmaker bets, slot machines and online casinos on their online platforms. At the same time, no lottery has received any license to organize and conduct gambling. They are not listed in the "Registries and Lists" section on the CRGL website.

2. Lottery operators actively cooperate with the underground illegal sector, organizing "instant lotteries" in illegal gambling halls, which imitate gambling on slot machines.

3. Licenses of state lottery operators M.S.L. LLC and Ukrainian National Lottery Foreign-invested Enterprise expired back in 2014, but this does not prevent them from continuing to work even now and imitating gambling.

Conducting lotteries of all these types of activities in the field of gambling without licenses means an annual underpayment of hundreds of millions of hryvnias of revenues to the state budget. The most effective method of combating this is to recognize lotteries as gambling, as the regulators of most developed markets have done, in particular in the EU countries, in which we are so eager to integrate. This step and a number of other important measures will make it possible to stop the illegal imitation of gambling by lottery operators, which cause significant losses to the state and prevent the development of legal gambling business.


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