The President of Ukraine signed the law on gambling business. What does it envisage and what difficulties may the market face?
August 13, 2020 is the date that marks the successful end of the long and controversial path of the Law of Ukraine “On State Regulation of Activities for the Organization and Conduct of Gambling” to its adoption and entry into force.
Since 2014 and over the next six years, many copies have been broken around the “gambling law” – some argued that slot machines have no place in Ukraine, and hopes of getting closer to the Las Vegas success are destined to crash on the sharp cliffs of Ukrainian realities.
Others, were operating with numbers, recalling the prosperity of the shadow and unregulated gambling market, the volume of which, according to consolidated expert estimates, pulls 1 billion euros, of which the state treasury receives absolutely nothing.
Despite the end of the battles inA favor of the principle “if you can’t win – take the lead”, one cannot count on peace and quiet so far. The reasons for such heated debate and ongoing resistance are understandable. The gambling business is an area where it is incredibly difficult to fairly draw a dividing line between the interests of its owners and the risks for players who may become addicted to gambling.
However, that the ban on gambling and the absence of any law is by no means the same as the absence of gambling as a phenomenon. The presence of even imperfect, but really existing regulation is still better than ideal, but unrealized plans for it. So, what does the new law imply for the gambling market?
Gambling business verticals
The law legitimizes all major verticals of the gambling business, including casinos and online casinos, bookmaker activities in bookmaker offices and online, slot machine halls and online poker.
Only a company established under Ukrainian law can obtain a license for each type of activity.
The law only allows casinos to be opened in hotels that meet a number of requirements. Thus, in the capital, casinos will appear in five-star hotels with at least 150 rooms. In other cities, operators are allowed to place casinos in four- and five-star hotels with 100 or more rooms.
Casinos are also allowed in suburban complexes with an area of at least 10 thousand square meters with a five-star hotel.
In addition, the legislator decided to make a kind of “knight’s move” to reveal the potential of some territories of the country and came up with the so-called “special play zone”. There will be 5 such zones in total, they will be determined by the government and they will be located, in particular, in the regions of Ukraine, requiring stimulation of their development.
The law also introduces an investment license, which can be obtained by building a 5-star hotel with 200 rooms in the capital or 150 rooms in other cities. In exchange for investments in the construction of the hotel and the development of the Ukrainian infrastructure, the operator is exempted from the license fee, the term of which is 10 years.
The law does not put forward special requirements for the premises of an online casino operator or his actual presence, in addition to the fact that only a Ukrainian company can be the operator.
Previous versions contained a rule that obliged online casino operators to host their servers in Ukraine, but this rule was not preserved until the final text.
In addition, there are some general requirements for all online casino operators, for example, the presence of a domain name in the .UA zone and a website registered in the registry through which the online casino operator works.
Bookmaker activity can be carried out both online and offline through bookmaker offices on the basis of a single license.
The legal requirements for the placement of bookmaker offices are very strict: in 3-5-star hotels with atleast 50 rooms in Kiev and from 25 rooms in other cities. The minimum area of a bookmaker’s office is 50 square meters.
Most likely, due to the described restrictions on the placement of bookmaker’s offices, there will be few operators willing to open them. At the same time, thanks to legalization, the number of regulated online bookmakers should increase significantly.
Separately, the law provides for a license to open one bookmaker’s office at the racetrack, where bets on the results of the races will be accepted.
Perhaps one of the most controversial verticals of gambling, the notorious slot machines, around which almost the hottest disputes thundered, and calls were heard to the last not to allow the mass gambling addiction of the population, to which their legalization could lead.
You can place slot machines in casinos on the basis of a casino license and in slot machine halls on the basis of a separate license.
As well as bookmaker’s offices, slot machine halls can be located in the capital exclusively in hotels of 3-5 stars category with 50 or more rooms, 25 or more rooms in other cities. One license allows you to install 250 slot machines.
The deputies have provided a number of restrictions regarding the location of slot machine halls – they are prohibited in settlements where less than 10 thousand people live, as well as in the immediate vicinity of educational institutions, that is, at a distance of less than 500 meters from them.
In addition, operators are prohibited from using slot machines that were produced earlier than 2019.
Consdering the law, licenses are only issued for online poker. Offline poker is possible either in a casino as one of the games of chance, or in the form of sports poker, which is not considered a game of chance.
Nobody can predict the future of the Ukrainian gambling business with a sufficient degree of certainty. Nevertheless, experts make positive forecasts for the Ukrainian gambling market.
A number of foreign operators, who are accustomed to working according to strict international standards and rules, are already interested in mastering the Ukrainian gambling market. For example, Michael Boettcher’s Storm International, which operates in neighboring Belarus, Armenia and Georgia, sees great prospects in Ukraine.
There is a great hope that they will show by their own example how a conscientious gambling business should work, creating a good business culture and practice on the Ukrainian market, making it more transparent and civilized.
Darren Keane, Storm International CEO, has repeatedly said that Ukraine has all the conditions for the development of the gambling sector, and this will bring profit to all participants in the process: the state, entrepreneurs, tourism, employees and guests of the country.
Also, many Ukrainian employees of Storm International, Darren Keane noted, would be happy to return home to work closer to their family.