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The state should receive adequate funds from organizing and conducting lotteries


Throughout the history of gambling business development in Ukraine, lotteries have been singled out by the state as a separate category of economic activity. During the presidency of Yanukovych, this exclusivity was even enshrined in a separate Law of Ukraine "On State Lotteries in Ukraine" that has been in force since 2012!

Despite the loud name, which suggests that all activities related to the organization and conduct of lotteries in our country are the prerogative of the state, this is not entirely true. To be more precise, it is not true at all. Private companies organize and conduct lotteries, but the lotteries they own have the status of state-owned. As a matter of fact, all "statehood" ends there.

Why? Because a lottery acquires the status of a state lottery from the moment the terms and conditions of such a lottery are published by the state lottery operator. That's all the "requirements" needed to obtain this status. Yes, lottery activity is prohibited without it, but... the operator itself, i.e. a legal entity - a business entity (and not a state institution) that has received the right to conduct state lotteries in accordance with the procedure established by the Law of Ukraine "On State Lotteries in Ukraine", must approve the terms and conditions of conducting lotteries!

As for the funds that lottery operators must pay for the license, their amount should be determined by the Law of Ukraine "On Licensing of Economic Activities," but... there is nothing of the kind in it, except for a cross-reference to the Law of Ukraine "On State Lotteries in Ukraine." Due to this vicious circle of mutual references in the laws, state lottery operators have been actually avoiding paying for licenses for more than 10 years and are not responsible for it.

Worse, while the Commission for Regulation of Gambling and Lotteries has the right to terminate other gambling market players due to non-compliance with license conditions and non-payment of licenses, the national regulator does not have such a right with regard to state lottery operators.

In fact, lottery operators exist outside the current legal framework in which all other gambling organizers operate. And they use this legal gap for their own enrichment, ignoring the interests of the state. While other companies are deprived of their licenses for failing to make mandatory payments to the state budget, lottery operators continue to thrive on the black market, pay nothing to the state, and imitate other types of gambling.

And all of this is happening because of gaps in the legislation that are quite easy to fill. And not only to fill them, but to do so in such a way that the state budget receives reimbursements for unpaid taxes and license fees for the entire period of the unjustified "privilege" for lottery operators. This should be a clear and fair mechanism that cannot be circumvented or avoided.

The development and creation of such a mechanism is the prerogative of MPs, since according to the Constitution, they are responsible for the state's tax policy. And here the position of the specialized tax committee of the Verkhovna Rada is quite strange, as its representatives have been "not noticing" the huge cash flow that constantly bypasses the state budget and brings profits only to private owners of state lotteries. So maybe it's time to open our eyes and see the real source of the state treasury?

 

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