Gambling

Ukrainian Parliament passed a bill legalizing gambling in Ukraine

23/07/2020

In January 2020, the Ukrainian Parliament passed a bill aimed to create a regulated environment for gambling activities. The bill, initially introduced by the member of parliament, Oleg Marusyak, has been scheduled for voting in December 2019 but failed to pass and was rescheduled for January, after about 100 amendments out of 3000 proposed by the opposition were included into the bill. 

 

It's worth noting that gambling activities, both online and land-based, with the exception of state-run lotteries, were effectively banned in Ukraine since 2009, after a number of people died in a fire in a gambling parlor in Dnipropetrovsk. Particularly, access to most online gambling resources was blocked by state censors. Ukrainian government has sought to create a legal framework for gambling activities since 2015, later pledging to bring the industry back by 2018.

 

The current bill imposes a number of restrictions, such as setting the minimum legal age for gambling at 21 and limiting the placement of gambling facilities to hotels. Businesses providing gambling services must be licensed, with the license renewed every 5 years. The gambling industry will be further controlled by a specially formed Gambling Commission, a step that initially caused some controversy regarding the right of the legislative body to establish such a regulator. Originally, the bill also imposed restrictions on any form of gambling advertisement although later this part was scrapped. 

 

The legislation limits access to the Ukrainian gambling market for businesses originating in the countries Ukraine deems as hostile, which includes Russian owned companies or companies run by Russian CEOs, heads of accounting, and UBOs. This restriction doesn't apply to game suppliers though, except for producers of land-based slot machines. 

 

One of the controversial issues is the taxation of gambling business. The proposals introduced so far vary from flat-rate taxation to elimination of the special gambling tax altogether, with gambling businesses paying only license fees. The latter proposal put forward by Artem Dubnov is most likely to pass. It's worth clarifying that although the proposal implies the absence of special taxation of gambling houses and bookmakers they are still liable to pay all the regular taxes, such as an income tax. 

 

The Ukrainian President, Volodimir Zelensky, is a vocal proponent of reviving the gambling industry in the country in a civilized and controlled fashion.