Having legalized gambling, Ukraine now offers an immense range of highly promising opportunities for investments in the gaming industry. While opening an online casino in 2020 was covered in detail in one of our latest articles, now we are going to guide you through the journey of launching a land-based casino in Ukraine.
Analysis of Ukraine’s gambling landscape
Once gambling was prohibited in 2009, the Ukrainian gaming industry developed under the legal radar. However, two kinds of gaming — state lotteries and sport poker —managed to stay within the law, creating room for loopholes which were quickly detected by black market operators. For the next decade, gambling operators in Ukraine successfully (but illegally) thrived under the cover of night, slipping away with the first ray of dawn.
In 2019, President Volodymyr Zelensky, whose presidential campaign had included a promise to turn gambling into a legal form of entertainment, declared war on the black market and put forward an initiative to legalize the gambling industry. The Verkhovna Rada formulated Bill No. 2285-D, which was published in October 2019. It took parliamentarians nearly a year to finally pass the bill, but in August 2020, once President Zelensky put his signature to the document, the law governing the gambling sector was officially signed and sealed.
Implementation of the law will be regulated by the Gambling and Lottery Commission, which is set to be created by a special team which was assembled by the government of Ukraine on September 23. The Commission will be responsible for determining licensing conditions and fees, as well as the issuance of licenses and designation of special gambling areas.
To open a land-based casino in Ukraine, there are a number of requirements that operators must satisfy. First, according to the law, only a legal entity registered or incorporated in Ukraine with authorized capital of at least €970,000 can apply for a license. Another prerequisite is a security deposit or a bank guarantee in the amount of €1.1 million.
Under no circumstances can a bank, other financial institution, or non-governmental organization become an operator of a gambling enterprise. Another crucial factor for operators is to have no ties with individuals or citizens of the aggressor state (currently the Russian Federation).
Gaming business requirements
The serpentine road to getting a gambling license requires a great amount of patience while following the steps outlined by the law. It begins with the fact that all operators must be registered in the country and satisfy the other requirements mentioned above. Then, the paperwork comes in; the package of documents includes an application, as well as the company’s administrative and legal information. In the end, land-based casino business owners will need to pay for a general gambling license as well as a separate fee for each gaming table in their casino.
Each license entitles the holder to operate a single casino. The license fee in Kyiv differs from the fees in other cities: in Kyiv, operators pay €9.2 million for a license, while in other cities, the fee is €4.6 million.
In Kyiv, gambling will only be allowed in 5-star hotels with at least 150 rooms; in other cities, in 5-star hotels with at least 100 rooms. In addition, in any region, the casino should have an area of no less than 500 m² with a minimum of 50 employees. Countryside recreation zones must have an area of 10,000 m².
The Cabinet of Ministers of Ukraine will also designate up to 5 special gambling zones, wherein the casino area must be no less than 10,000 m². Casinos in the appointed special gambling zones must contain a minimum of 20 gaming tables (including 4 roulette tables) and 250 slot machines.
License holders can operate up to 250 slot machines, and the license fee is €1.2 million.
In Kyiv, gambling activities can be arranged only in 3-, 4- and 5-star hotels with at least 50 rooms, while in other cities, in 3-, 4- and 5-star hotels with at least 25 rooms. One condition that’s imposed uniformly across the country is that slot halls should be no smaller than 300 m² and contain no fewer than 50 slot machines.
Also, the law requires operators to apply for supplementary licenses for each gaming and/or roulette table (€13,800 per year for each non-roulette gaming table and €27,000 per year for each roulette table) and for each slot machine (€920 per year for each new machine).
All licenses are valid for a period of five years. License fees are calculated based on the statutory minimum wage (currently, one statutory minimum wage is UAH 4.723 (~ € 150)).
In addition, the Gambling Act provides for an investment license, which may be issued for the purpose of investment in a land-based gaming project approved by the government. The license is free of charge for the first 10 years, and then additional license fees come into effect at the rates noted above.
Casino equipment and slot machines
Gaming equipment selection will shape the success of a land-based casino. To effectively and productively operate a casino, it is necessary to purchase or rent slot machines, gaming tables, and terminals that are of value to players.
While picking out casino equipment, operators should pay close attention to the cost and quality of the slot machines. It’s also important to dig deeper and find out more about the suppliers of the gaming equipment, since players value high-quality terminals and consequently go for first-class games rather than products that raise more questions than answers; as in all industries, brand names can carry serious weight, and players will trust a name they know before one they don’t.
There are also some requirements for land-based casino owners regarding the minimum number of slot machines in their gaming halls. In cities with a population of more than 500,000, there should be a minimum of 10 gaming tables (including 2 roulette tables) and 50 slot machines. In small towns and rural areas, casinos are required to have 5 gaming tables (including 1 roulette table) and 20 slot machines.
While managing a land-based casino, operators should monitor all the gaming operations in real time to maintain the best possible level of casino functionality. Also, operators should design new business strategies and improve existing ones to promote the most in-demand products, giving casino guests an unforgettable gaming experience.
The centralized monitoring system from Slotegrator is developed to efficiently manage every aspect of land-based casino operations. Additionally, it’s set to add a required degree of transparency to the business, as the government determines the tax on slot machines based on the data collected.
IMPORTANT: it is prohibited to install slot machines released before 2019.
Hiring high-quality staff
All employees should be recognized for their roles in making a land-based casino work. That’s why talent acquisition efforts should focus on hiring highly qualified specialists to help operators handle casino management and maintenance, as well as effective marketing and promotion. No casino business plan would be complete without the requisite staff.
Casino staff should include:
Despite the fact that hiring a wide circle of professionals may seem like an unnecessary expense for casino owners, the truth is that without qualified team members, getting the most of a large gaming enterprise is simply impossible.
Marketing is king. Developing strategic advertising campaigns is extremely important in order to attract a bigger audience and draw the attention of players who can potentially become long-term casino clients, so marketing efforts should factor prominently in your casino business plan.
At the moment, the Gambling Act imposes some amendments to the advertising law regarding the rules and restrictions governing gambling promotion. It is critical to take into account the following: a ban on gambling advertisements from 6:00 to 23:00 on TV, radio, and the internet; a ban on advertising in any print media (except for specialized gambling publications) and bans on outdoor advertising. But even though the restrictions seem quite stringent, a good marketing professional can get the job done, no matter how little room to maneuver they have.
Bonus strategies, along with elements of gamification, can make a difference in user engagement. Also, loyalty and VIP programs are a classic tool for building long-lasting relationships with high rollers. This is actually a very delicate process that takes time, but it’s worth it to let your players know how much you value them. After all, the players who spend the most time within the walls of your casino deserve some special treatment.
The more timely and responsive your customer service is, the better your odds are of retaining your players, as well as developing a good reputation throughout the sector. Unfortunately, there is always something that can go wrong, but first-class customer service is a reliable method of handling any lamentable consequences.
Clients and casino representatives most often resolve problematic situations face-to-face, so building good relationships with your players is essential. This is a reason to pay attention to the communication skills of your casino staff, as a charming appearance, good manners, and customer-oriented behavior will undoubtedly win your clients’ hearts and demonstrate your interest in providing the best possible customer journey.
How can Slotegrator help you?
Despite how recent the legislative process was, Ukraine has already become an attractive destination on the global gambling map for operators looking to start their own casino. Slotegrator has constantly kept in touch with gambling experts, lawyers, and officials to stay at the forefront of any and all developments on the road to legalization. Now, having kept themselves informed, our specialists are geared up to help operators open a land-based casino business.
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