Lottery Market in Ukraine May Be Legalized Soon

Volodymyr Groysman, the Prime Minister of Ukraine, said that the country would soon enforce a new procedure to regulate gambling. 

According to PM, the next step after the fight against smuggling will be the legalization of the lottery market, where there is now a huge turnover of shadow funds. In his opinion, lottery business today is absolutely illegal and has nothing to do with the legitimate business activity. That is why legalization and tax collection for Ukraine's budget replenishment is a sound decision.

The Ministry of Finance has been trying to resolve the issue of commercial lotteries legalization for two years. By various estimates, the turnover of funds in this gambling segment reaches the millions of dollars. For example, according to local media reports, from 2015 to 2018, only officials and members of Ukrainian Parliament received lottery winnings at a number of about 8 million hryvnias (about $300 thousand). While a dime of that money never reached the state budget.

As said by the ex-finance minister, Alexander Daniluk, licensing conditions for lottery operators have already been developed. They include license fees and regular contributions to the budget. It is proposed to introduce the American model of local lotteries. In such case, every region would be able to license its regional lottery and receive income for the local budget.

According to the Ministry, the legalization of gambling could bring the country over 5 billion hryvnias annually. However, Daniluk said that so far the Government failed to reach the agreement with the Verkhovna Rada on the adoption of new gambling law.

The State Regulatory Office and the National Bank of Ukraine didn't support the proposed licensing conditions as well. They pointed to many serious flaws, which can make the control of account activity impossible. 

It is to be recalled that only state lottery is legally allowed in Ukraine. Gambling was banned back in 2009. 

According to the National Police of Ukraine, about 7 thousand illegal gambling houses currently operate in Ukraine and this number increases by 1.5 thousand each year. 

Organization of gambling activities is fined ₴25 million or more with further confiscation of the equipment and money in the profit of state. Players are fined ₴112.

However, as evidenced by the global experience, the practice of complete legal prohibition of gambling, except for highly religious countries, has failed. It only leads to an increase of the shadow segment.

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