After may 2009 gambling became illegal in Ukraine after a fire at a gambling hall in Dnipropetrovsk killed 9 people. The law stated that “any game requiring the player to make a bet that enables them to receive a prize and the result of which depends on chance partially or completely, is considered gambling”. The lottery, sports events, pool, bowling, free draws carried for advertising, charity were not integrated in the “gambling” category allowing them to exist legally.
Until 2011 operators were able to take advantage by “reading between the lines” when it came to Ukrainian laws. Flaws in the law allowed them to continue their activity, by moving servers outside the country without the fear of persecution. But in 2011 the government passed a bill that empowered them to take more action against this kind of practices, including the power to make arrests.
But even though the main reasons of the ban was apparently restriction, like limiting crime and other similar actions, nothing was done against it. Even more, they indirectly forced the gambling industry to take an illegal turn, throwing this industry in the black market area. The requirements were simply too much. Not only they required a capital of 2 million € separated by any borrowed funds, but also space requirements. The new casinos were to exist only in 4 or 5 stars hotels, with over 200 rooms, but the only problem consisted in the very small numbers of such places.
But wait, there’s more! An annual license fee is also introduced, ranging from 300 000 – 1 000 000 € depending on the city and population, of the placed casino. Overall, this does not include the gaming license. Add 1.5milion euros more to get the license. This kind of laws are very likely to scare off foreign investors, thus putting Ukraine very close to the top on the list of “most expensive places to make a casino” in the world. AND APPARENTLY the government chooses to look at the negative side of gambling more than it looks at the possible advantages that such industry would create and help sustain national budget and tourism. The government controlled lottery is the only form of gambling, that is accessible to most of the Ukrainian people.
The good news is that even though these bans existed, Ukrainian people were still able to comfort their thirst for gambling, by visiting foreign web-sites; most of them accepting Ukrainian citizens. These things were not regulated by any specific laws; and even though some laws tried to regulate this aspect, things were very unclear when it came to sanctions or allowance. While trying to stabilize economy in every way possible, and at the same time wishing to bring more tourists to the country, the Ukrainian government announced that possible legalization of gambling could be brought in discussion again. Glyn Thomas, organizer of has stated that Ukraine has “a background of IT companies that are involved in the gaming industry. A lot of software suppliers are based here already because of the renowned skill of the workforce” thus showing the potential of Ukraine that could become one of the world’s leading countries in this industry. But because the harsh legislation that still holds on in Ukraine, many investors have decided to wait for “better days” before investing in a country that has one of the biggest taxation laws.
Here’s what our partners Casexe mentioned about this economy:
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CASEXE experts, that support legislative regulations in the gambling industry, stated the following:
“Gambling in Ukraine. What’s going on and why?
It’s a well-known fact that CASEXE is a major supporter of legislative regulation of the gambling industry in any country of the world, despite of the region and market peculiarities.
Having comprehensively analyzed the situation that is evolving around the possible legalization of gambling in Ukraine, CASEXE experts have provided their confident and extensive comments on the topic.
Ivan Kondilenko, CEO, CASEXE:
“In the future, Ukraine could become one of the most interesting and top priority markets for our company. And this goes not without a reason, as this is the second country in Europe by population, which has the experience of regulating gambling business and a certain established segment of the audience that is quite aware with peculiarities of gambling (first of all, land based). That’s why we decided to carefully study the situation with gambling legalization in Ukraine, and understand why there’s still no any progress in the industry and what should we expect in the nearest future.
On September 29, 2015, CASEXE has been sponsoring the first Ukrainian Gambling Congress, which was held in Kyiv and was expected to become a catalyst for progress. Event has been a top class, but unfortunately, speeches and promises from politicians weren’t enough and the law on legislation of gambling has not been accepted yet. Why’s that so?
It seems that key reason for such situation is powerful lobbying from people who represent the only kind of legal business in Ukraine – lotteries. Their unwillingness to share the market with bookmakers and casino is a key obstacle on the way of adopting the law that could regulate all types of gambling in the country.
The essence of the law is important as well, being offered by the Ministry of Finance of Ukraine. Unfortunately, it doesn’t take into account all realities and interests of market participants. We’ll not go into details, but let’s just note the fact that the draft in its existing form creates more problems and obstacles for operators, than possibilities for organizing a business.
Some part of Ukrainian political elite explains it as a care about population and preventing negative consequences of gambling legalization. Unfortunately, such notes are no more than manipulation, as advantages and benefits from adopting of the law that we don’t have today would be so much bigger. So let’s look through the key thesis against legalization that we can hear from mass media:
1.) “Gambling is waste, addiction and poverty”. This is not more than a mere myth. There’s a threat for people fighting the gambling addiction. But there’re no more gambling addicts in the industry than, for example, people suffering from alcohol addiction, and it’s allowed everywhere. American social studies show that gambling problem has been an issue for 1 – 1,5 per cent of the total amount of player respondents. In your opinion, is this figure high or low?
2.) “Gambling is criminal”. Makes sense if we speak about the country where it’s banned. The need for playing has not been vanished, thus players go to illegal venues. And there are lots of them. The only way to exterminate criminal essence of this business is to legalize it.
3.) “Children and teenagers who can’t control themselves will attend casinos”. This is another myth, because the rules of the reasonable law completely prevent people under the legal age to enter such places. And owner of the business shall bear responsibility for that with a possibility of losing the license and confiscation of property. No need to doubt – control will be very strict. It’s proven by the worldwide experience of casino and betting shops operation.
CASEXE is the leading European manufacturer of software for gambling industry. Multifunctional online casino platform is a key product of the company allowing to launch the most challenging and unconventional projects.
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CASEXE is the leading European manufacturer of software for gambling industry.
In particular, Evchenko will cover the possibility to attract tourists and players to Ukraine from all over the world and factors that can repackage the image of the country, as well as the chance to turn the country into an interesting investment project in the terms of gambling and other sectors
