On July 14, 2020, the Verkhovna Rada of Ukraine finally passed Bill 2285-D, legalizing all types of gambling. This article is based on the last published version of the law (hereinafter the Gambling Act), and is written for informational purposes. Also, the text of the final law may differ from the currently-approved version.

The flow of information surrounding the legalization of gambling in Ukraine is increasing every day, making it hard to keep track of all the details (the fact that more than 3,500 amendments were presented for consideration before the second reading should serve as vivid evidence of how heated the debates were before a 248-95 vote at the second reading).

Based on the law recently adopted by the Ukrainian parliament, we have prepared a guide to the most relevant and necessary information about the legal framework for the gambling industry, which has spent the last 10 years operating outside legislative boundaries.

The Gambling Act also introduces amendments to the law on lottery regulation in Ukraine — a separate type of gambling activity controlled by the government.

gambling law Ukraine

Types of gambling

The Gambling Act allows the following types of gambling activities to be organized within the territory of Ukraine:

  • Land-based and online casino games, including table games, offline poker, and other games
  • Betting in land-based betting shops and on online platforms (including real-life events such as sports matches and horse races but excluding virtual events)
  • Slot machines (in gaming halls)
  • Online poker

Land-based casinos (table games and slot machines) 

Each license entitles the holder to operate a single casino. License fees are €9.2 million in Kyiv and €4.6 million in other cities.

The main requirements:

Gambling will be allowed only in designated gambling zones:

  • In Kyiv — 5-star hotels with at least 150 rooms
  • In other cities — 5-star hotels with at least 100 rooms
  • Countryside recreation zones with an area of 10 thousand m²
  • Special gambling zones established by the government (in Ukraine, there can be a maximum of five special gambling zones created; the casino area should be no less than 10 thousand square meters; it should contain a minimum of 20 gaming tables (including four roulette tables) and 250 slot machines)
  • The casino should have an area of no less than 500 m²
  • The minimum number of employees is 50 people

Minimum necessary equipment:

  • In cities with a population of more than 500 thousand people — 10 gaming tables (including two roulette tables) and 50 slot machines
  • In small towns and rural areas — five gaming tables (including one roulette) and 20 slot machines
  • The use of slot machines produced before 2019 is prohibited
Specific licensing conditions are being developed and will be approved by the Verkhovna Rada of Ukraine.

gambling law Ukraine

gambling law Ukraine

Online games

License fees are €995,000.

The main requirements:

Online games are legal only via mobile applications and/or websites with a .UA domain name that are added to a special register by the Ukrainian regulator.

gambling law Ukraine

Betting

One license allows the holder to organize both land-based and online betting.

License fees are €4.6 million.

The main requirements:

Land-based betting can only be organized in special gambling zones:

  • In Kyiv — 3-,4-, and 5-star hotels with at least 50 rooms
  • In other cities — 3-,4-, and 5-star hotels with at least 25 rooms
  • At racetracks (for horserace betting) 
  • The betting room should have an area of no less than 50 m²

Online betting can only be conducted via mobile applications and/or websites with a .UA domain name that are added to a special register by the Ukrainian regulator.

gambling law Ukraine

Slot machines

A single license enables the holder to operate up to 250 slot machines. License fees are €1.2 million.

The main requirements:

Only in special gambling zones:

  • In Kyiv — 3-, 4- and 5-star hotels with at least 50 rooms
  • In other cities — 3-, 4- and 5-star hotels with at least 25 rooms

The slot machine hall should have an area of no less than 300 m² and contain a minimum of 50 slot machines.

gambling law Ukraine

Online poker

License fees are €765,000.

The main requirements:

Online poker can only be conducted via mobile applications and/or websites with a .UA domain name that are listed on a special register maintained by the Ukrainian regulator.

gambling law Ukraine

The Gambling Act also requires operators to obtain supplementary licenses (in addition to the core licenses listed above and covering the same time period) for:

  • Gaming and/or roulette tables — €27,000 per year for each roulette table and €13,800 per year for each non-roulette gaming table
  • Betting companies — €4,600 per year for each company
  • Slot machines — €920 per year for each slot machine

gambling law Ukraine

All licenses will be issued for a period of five years. License fees are calculated based on the statutory minimum wage. As of this writing, one statutory minimum wage is UAH 4,723 (or ~ 150 euros).

Apart from that, the following separate licenses are included in the Gambling Act:

  • License for the provision of services for gambling businesses (supplying gambling software) — €46,000 for five years
  • An investment license (issued for a land-based gaming investment project approved by the Ukrainian government) — free for 10 years with further additional licenses at the rates indicated above

Gambling operators 

The basic requirements for becoming an official gambling operator in Ukraine are:

  • The status of a legal entity that is registered or incorporated in Ukraine
  • Authorized capital of at least €970,000 
  • The operator must not be directly or indirectly controlled by persons or citizens of the aggressor state (currently the Russian Federation)
  • The operator must not be a bank, other financial institution, or non-governmental organization
  • The operator must have a security deposit or bank guarantee in the amount of €1.1 million 

gambling law Ukraine

Players and social responsibility

The Gambling Act emphasizes player safety and protection from gambling addiction. It has a number of measures listed, including a minimum age of 21, mandatory player identification, a list of excluded players (for example, players can make a request to be forever excluded, or they may be excluded at the request of close relatives), and other measures.

Regulator

In accordance with the Gambling Act, the government will create a new specialized gambling body that will be responsible for state control over gambling. It will fulfill several duties, such as issuing licenses, drafting secondary legislation, monitoring and conducting inspections.

The creation of this body is another vital point in the gambling legalization process, as the industry’s future will largely depend on it.

State online monitoring system

The Gambling Act includes the establishment of a central monitoring system that allows the regulator to connect to gaming equipment and monitor all gaming transactions in real-time.

The system has not been developed and launched yet, but it is expected to be ready in two years. Before the system is live, the license fees for betting, online gaming, and the annual additional license fees for each slot machine are expected to increase by three times.

Taxation

The issue of taxation in the gambling industry remains open and should be considered a part of a separate draft law.

Currently, there are five versions the Verkhovna Rada will most likely consider in the next session, and all of them will be amendments to the Tax Code of Ukraine. Four of the proposed taxation schemes include a tax on GGR (gross gambling revenue) and an income tax.

  №2713
Zablotskiy M.B.
Marusyak O.R.
№2713-1
Natalukha D.A.
№2713-2
Dubinsky O.A.
№2713-3
Dubnov A. V.
№2392
Mulik R. M.
Strunevich V. O.
Land-based casino GGR tax
10%
12.5%
N/A
18%*
20%
Online casino GGR tax
10%
12.5%
25%
18%*
20%
Gaming halls GGR tax
10%
12.5%
25%
18%*
20%
Betting GGR tax
10%
7.5%
25%
18%*
20%
Lotteries GGR tax
10%
22%
25%
18%*
20%
Income tax
18%**
18%**
18%**
18%*
N/A
Tax on winnings
No
No
No***
No
0%

* The Tax Code excludes all tax regulations regarding these gambling types. Therefore, the general income tax at a rate of 18% will apply.

**Final revenue is subject to both income tax and GGR tax. 

*** The tax agent submits information about the amount of the winnings to the tax service if it exceeds the amount determined by the law on financial monitoring.

Advertising

The Gambling Act introduces amendments to the Ukrainian law on advertising regarding the rules and restrictions for advertising gambling activities. The amendments include a ban on advertising casino games from 6 a.m. to 11 p.m. on TV, radio, and the Internet, a ban on advertising in any print media (except for specialized gambling publications), and bans on outdoor advertising.

The law is currently awaiting signature by the chairman of the Verkhovna Rada, Dmitry Razumkov, and afterwards will be sent for signature to the President of Ukraine Volodymyr Zelensky. If the President imposes a veto, the Law will be returned to Parliament for revision. Otherwise, it will come into effect after its publication.

gambling law Ukraine

Latest updates

11.08.2020

The president of Ukraine Volodymyr Zelensky signed Bill 2285-d on the gambling legalization. The document was sent to the president as soon as it was signed by the head of the Verkhovna Rada, Dmitry Razumkov. After Zelensky's approval, the bill was returned to the Parliament. The text of the law will be published on the official website of the Verkhovna Rada soon. The law comes into force the next day after its publication.

Despite the fact that the most important step in the entire gambling legalization process has already been made, there are still many decisions ahead that need to be made for the Ukrainian gambling market to work in full force. Among the crucial upcoming actions is the creation of a gambling regulatory commission and the tax rules adoption.

 
 

What has changed in the text of the law?

  • Land-based casinos

The requirements for organizing land-based casino games in cities other than Kyiv have changed — now not only 5-star, but also 4-star hotels with at least 100 rooms are eligible.

Also, new requirements for countryside recreation zones with casinos have been announced: only 5-star hotels, consisting of two or more buildings and with a total area of 10,000 square meters, will qualify.

In addition, small towns and rural areas — where casinos will be required to have at least five gaming tables (including one roulette table) and 20 slot machines — will be defined as locations with a population of less than 500 thousand people or territories outside of settlements.

  • Online casinos

The law now states that the payment of bets, fund returns, and winnings payouts must not be carried out in cash.

In addition, online casino organizers are prohibited from:

  • Conducting online poker games and online poker tournaments without obtaining an online poker license
  • Offering loans and accepting payments in installments
  • Exceeding the payment deadline, which is 30 days from the date of the player's request
  • Organizing games that have lottery characteristics and resemble lotteries
  • Betting

Regarding land-based betting offices, the organizer must use a special online system for recording events and winnings.

  • Slot machine gaming halls

The following restrictions have been announced regarding the placement of slot machines: it is now prohibited for slot machine gaming halls to be located closer than 500 meters to educational institutions and in settlements with a population of less than 10,000.

  • Licenses

The conditions for obtaining an investment license have been released — they will be issued to applicants planning to build a 5-star hotel complex with 200 rooms in Kyiv or with 150 rooms in other cities.

  • Monitoring system

The law provides for a certification system for gaming equipment, either conducted by special companies or through recognition of foreign certificates. The provisions of the law that relate to what gaming equipment is subject to certification will enter into force after the authorized body determines the list of certifying companies, as well as certificates that are recognized in Ukraine, but no later than January 1, 2021.

Update: September 24, 2020

Implementation of the law will be regulated by the Gambling and Lottery Commission. To establish the Commission, the Cabinet of Ministers of Ukraine assembled a special team to create the necessary regulatory legislation on September 23. The regulator is expected to become operational from November. The Commission will be responsible for developing licensing conditions and determining license fees, as well as the issuance of licenses and management of registries. This authority will also designate certain locations as “special gambling zones.” Watch this short video to get a complete picture of the Ukraine gambling law.