The EU proposes a unified tax on iGaming – how will it affect Ukraine?

The European gambling market continues to develop dynamically. While in Ukraine we are still at the stage of defining terminology in tax legislation and developing adequate approaches to advertising, in Europe discussions are already underway about the possibility of supranational regulation of the gambling sector. Today, proposals to unify gambling taxation across all EU countries and introduce common tax rates are being actively debated. Against this backdrop, a logical question arises: how realistic is such an initiative, and what opportunities could it create for other, “younger” gambling jurisdictions such as ours?

The Vice-President of the European Parliament, Viktor Negrescu, has proposed introducing a fixed European levy on gambling operators. He argues that even an additional 1% tax on top of standard national taxes could generate significant revenue for the EU budget. The funds would be directed toward education and youth programs, particularly Erasmus+.

At first glance, the proposal appears modest — just one additional percent. However, given the scale of the market, which is approaching €200 billion annually and growing by roughly 5% each year, this would translate into billions of euros. Online gambling is one of the most dynamic digital sectors of the economy, and due to its substantial shadow component, its revenues are not always fully captured by taxation.

Today, the tax landscape in the EU resembles a mosaic. Gross gaming revenue (GGR) tax rates range from 5% to 40%. Some countries, such as France and Sweden, have increased taxes in recent years in an attempt to balance their budgets and strengthen market oversight. Estonia, by contrast, has taken a different approach by reducing the tax burden. This diversity in fiscal approaches to gambling creates distortions within the internal market: operators tend to concentrate in jurisdictions with lower tax pressure, while countries with higher rates lose part of their potential revenues.

For this reason, the idea of tax harmonization may appear attractive at the conceptual level, but in practice its implementation will be highly complicated. Unlike VAT, which is partially harmonized within the EU, gambling taxation remains entirely under the control of national governments. Introducing a pan-European tax would require the unanimous consent of all 27 member states. This means that countries with strong iGaming industries could simply block the initiative. Given this reality, the chances of a quick decision appear rather low.

For Eastern European countries, the issue has a dual dimension. On the one hand, the region is demonstrating strong growth in the gambling sector. On the other hand, an additional European levy could enhance the competitiveness of younger markets — provided they maintain more flexible tax and regulatory conditions. If the tax is imposed “on top of” national rates without coordination or crediting mechanisms, it could become a restraining factor for the development of EU markets.

Ukraine should closely observe this trend. Although we are not yet an EU member, our course toward integration means gradual alignment with European regulatory standards. The key lesson lies not so much in the size of the tax itself as in the principle of transparency and the harmonization of rules. Clear, understandable, and competitive tax rates, combined with modern monitoring systems, could bring billions of hryvnias out of the shadow economy and into the state budget.

For the Ukrainian market, it is important to benefit from the innovations of European tax policy by creating a flexible taxation model that ensures budget revenues while preserving the attractiveness of the legal segment. If legal businesses operate under predictable conditions while illegal operators face real risks of blocking and sanctions, the balance will gradually shift in favor of the regulated sector.

At the same time, it is important to understand that as long as Ukraine is not part of the EU, we can use rising tax rates in European countries as an opportunity to attract investors by offering a more flexible and business-friendly gambling taxation framework. This is yet another strong argument for implementing gambling tax reform in Ukraine as soon as possible.