The Servant of the People party (SoP) in Ukraine has revealed its ‘draft law on legislating gambling services’, three weeks later than originally planned. If passed, the bill would end a 10-year ban on all forms of gambling in the country (minus lottery, which is still legal).
Plans to reform the country’s current current gambling law were announced earlier this year. Since 2009, a black market in this industry has thrived. Back in 2017, economists claimed that $1.5 billion in tax could be raised if re-regulation was achieved.
High costs, low taxes
This development will be of interest to affiliates with Ukrainian traffic. However, they should be aware that it won’t necessarily be easy for operators to obtain a licence here.
A range of fees have been added by the SoP to its provisions. The cost to obtain an online licence will be UAH 25 million (€800,000). Moreover, only 10 operators will be given one.
All licences in the Eastern European country, according to provisions within the drafted bill, will be available for five years. This applies across all relevant gambling verticals. Licensing procedures will take place through an ‘electronic auction’ model.
Online tax rates will be confirmed in due course, but are likely to be low. Sources claim that online casino will be around 12.5%, along with 7.5% for gross gaming revenue (GGR).
The priciest proposed licence costs UAH 37 million per year (€1.3 million), which is to operate a casino in Kiev. Retail bookmakers will pay UAH 750,000 (€25,000) for each brick-and-mortar outlets. They’ll also have to pay an additional UAH 30,000 (€1,500) for each gaming machine they have. Meanwhile, casino licences in smaller cities will cost the same as an online one.
Work underway in Ukraine
The Ukrainian parliament has started to review the proposal. However, it seems to have split internal opinions. SoP MP Oleksandr Dubinsky, for example, stated the intention for a different proposal “with better standards designed by experts working with MPs”.
Across the country, bookmaker portfolios will be limited to 800 premises. A total of 80 provisional bookmaker licences will be made available. 32 will be allowed in Kiev, 16 Dnipro and Odessa, and 32 shared throughout smaller municipalities.
The SoP will aim to create a ‘new gambling commission’, which will report directly to Ukraine’s Ministry of Finance. The MoF will also be responsible for distributing the planned ‘special fund’, raised through tax revenue. This will support healthcare networks, cultural development and national sports programmes through licence costs.