PlayCity revoked Patriot’s license — enforcement is working effectively

The new licensing rules introduced by the national regulator PlayCity are already demonstrating their effectiveness. In particular, there has been enhanced scrutiny of applications submitted by operators seeking licenses. Cooperation with the State Bureau of Investigations (SBI) and other law enforcement agencies in this area has already produced initial results. Recently, the license of one lottery operator was revoked due to the ultimate beneficial owner’s failure to meet legal requirements.

The emergence of the new gambling market regulator, PlayCity, sparked considerable discussion last year. Accordingly, many expectations were placed on the new regulator, as there were and still are numerous unresolved issues in gambling regulation. These include combating illegal operators and unlawful advertising, unifying tax legislation, implementing an online monitoring system, and updating licensing rules and compliance requirements.

PlayCity has proposed initiatives in all of the above areas, and it is worth noting that in some of them the agency has already achieved results. In particular, the effectiveness of control over license issuance and supervision of their use has improved.

A striking example of this is the recent revocation of the license of the lottery operator “Patriot” due to the ultimate beneficial owner’s failure to meet legal requirements. The grounds for revocation were based on information obtained following a comprehensive inspection of the company by the SBI in cooperation with other law enforcement agencies. The company (which won the tender on January 28 alongside “MSL” and “UNL”) paid UAH 24.2 million but failed the transparency test. “Patriot” is challenging the decision as unlawful, citing its public ownership structure and Ukrainian owner Andrii Matiukha.

This decision by PlayCity indicates at least three positive trends:

1. The regulator’s ability to create effective control mechanisms. The developed verification mechanism made it possible to detect violations efficiently and respond promptly. This sends a clear signal — the new rules are being enforced strictly. If companies fail to comply or violate them, sanctions will be applied regardless of their size, ownership, or the amount of licensing fees they have paid to the state budget.

2. The establishment of effective interagency cooperation. The license revocation was based on information provided by the SBI. This suggests that within a relatively short time, the new regulator has managed to build an effective mechanism for cooperation with the law enforcement system. This, in turn, gives cautious optimism regarding increased effectiveness in combating illegal operators.

3. Lotteries are no longer “untouchable.” The very fact of holding a tender for lottery licenses has already forced state lottery operators to come out of the shadows and pay UAH 72 million into the state budget. The next stage was the verification of beneficiaries, which ensured market transparency and excluded players who cannot hold such licenses due to their corporate structure. Lottery operators must finally understand that they are no longer in a gray zone — if they want to operate in Ukraine, they must comply with all legal requirements.

This example demonstrates that the regulator is moving in the right direction in organizing the market. The next necessary step, after establishing a reliable infrastructure, is to revise the provisions of the main law. The goal is to make the market not only stable but also ready for development and expansion, including through changes in tax legislation.