State Online Monitoring System - when to expect It?

The issue of introducing the State Online Monitoring System (SOMS) in the gambling sector has been on the agenda since the very beginning of the reform. However, as in the case of tax legislation, this issue has not been finally resolved for more than 5 years. Despite some progress in this direction at the end of 2023, when the government strengthened the legal framework for the introduction of the SOMS, no real steps were taken in this direction. Later, the situation began to change, as the state regulator PlayCity signed an agreement with Computer Information Technologies LLC to develop and implement the SOMS.

The state agency PlayCity has signed an agreement with Computer Information Technologies LLC, which won an open tender for the creation of the State Online Monitoring System. The first stage of the system is expected to be launched in December this year. The final implementation of the system's full functionality is scheduled to be completed in October 2026.

The full functioning of the SOMS should be an important step towards building a more civilised regulatory environment that will allow the market to grow. In general, the introduction of the system should help achieve 3 main goals:

1. Reduce the grey lottery segment of the market. This, in turn, will increase tax revenues to the state budget.

2. Increase the level of game security for players. Ideally, the SOMS should allow tracking the interaction of a particular gambling organiser with a particular player in real time. This means that it will become much easier for the regulator to identify any abuse by legal organisers towards players or by players towards a legal gambling organiser, and to respond more quickly to violations of the principles of responsible gambling. This, in turn, should increase the effectiveness of the fight against the spread of gambling addiction.

3. Eliminate manipulations by state authorities regarding the real amount of money in the legal gambling market.

However, it is important to remember that the SOMS is a critical component of the broader ecosystem of the legal gambling market in Ukraine. Without appropriate changes to tax legislation, its implementation is unlikely to achieve the desired impact. Furthermore, without addressing fundamental issue ssuch as standardising key definitions like "winnings" and "GGR" in legislation the introduction of the system could potentially harm legal gambling operators.

Undoubtedly, the current legislative framework still contains many shortcomings. However, it is worth acknowledging that these issues have persisted for years, and it is a positive development that the new regulator has begun addressing them. There appears to be a growing recognition of the value in streamlining the regulatory system for the benefit of the state, players, and legal gambling operators alike. It is hoped that this work will continue and become more systematic, as proper market functioning depends on comprehensive reforms being carried out across all regulatory areas in parallel.