Recently, member of the Commission for Regulation of Gambling and Lotteries (CRGL) Olena Vodolazhko gave an interview to International Masters of Gaming Law, in which she told about the current state of affairs in the legal gambling sector in Ukraine. In addition to the description of challenges facing the legal gambling sector, the interview also contains some interesting insights into the measures that CRGL actively takes to bring reforms to their logical conclusion and create appropriate conditions for both national gambling organizers and existing foreign investors.
The legalization of the gambling business in Ukraine was an important step on the way to the de-shadowing of this sector of the economy and an increase in budget revenues. The process of legalization moved the whole industry into the legal and regulatory field, which is qualitatively different from the "gambling" that existed before 2009. Gambling sector has received a separate sectoral law, which envisages clear rules for all participants in the country, defined mechanisms of state control and further steps to complete the reforms. Special attention was also paid to the adoption of special tax legislation and the introduction of the State Online Monitoring System (SOMS).
Such a systematic approach has its positive results. During the first three years of the market's operation, out of which a full-scale war against Russia in Ukraine lasts for one and a half years, the budget receives several billion hryvnias of revenue from license payments only. The overall positive effect for the economy, related to the creation of jobs, stimulation of the development of related industries and payment of relevant taxes, is measured in hundreds of millions of hryvnias.
Of course, because of the war, development stopped. Many legal gambling organizers, especially in the land sector, have reported significant losses and have been forced to severely reduce scope of operations due to destruction of assets and player outflows. The online sector feels a little better in the current situation, but as with the land-based sector, taxation and transaction monitoring are the most pressing issues for this sector.
At the same time, despite all the challenges the industry faced due to the war, the national regulator continues to fight for the use of legal gambling.
1. Work is underway to improve SOMS. In addition to that, the functional system was recently presented at GREF 2023 international gambling forum in Bergen, where it received positive reviews from international experts.
2. Together with other state agencies, the Commission works on introducing amendments to the Constitution, taking into account the three-year experience of the operation of the legal market.
3. CRGL also actively develops special conditions for granting licenses to companies and investors that will be involved in the post-war reconstruction of Ukraine.
However, taxation remains the key issue for CRGL, just as for the entire market. In the above-mentioned interview, Vodolazhko specially emphasized the thesis that bringing the tax legislation in line with the market needs is a key condition for the normal operation of the market for both national gambling organizers and foreign companies, which even despite the risks associated with the war, plan to enter the Ukrainian market. It is difficult to agree here and not to remind oneself the market’s mantra: simultaneous adoption of the draft Law 2713-д and the introduction of the SOMS is a guarantee of further market stability and thus the completion of the reform.