You're reading: Parliament passes law legalizing gambling in Ukraine

Parliament has passed a law legalizing the gambling business in Ukraine during its session on July 14. The law will allow online gambling platforms and gambling establishments — including bookmakers, gambling halls, casinos and lotteries — to work legally with a five-year license.

In its first year of legal operations, the gambling business is expected to bring Hr 4.4 billion to the country’s state budget, money the government will spend for education and medicine.

The new legislation will also help eliminate the vast network of shadow gambling sites disguised as lottery offices and internet cafes.

After parliament passed the law, Ukrainian lawmakers, including former Prime Minister Yulia Tymoshenko, submitted two bills to cancel the new gambling legislation. According to the rules, the parliament cannot pass the law to the president for his signature until lawmakers reject these bills.

Ukraine officially banned gambling in 2009, but casinos found legal loopholes to continue operating. That cost the state budget roughly $10 billion every year, according to Oleg Marusyak, the head of the parliamentary subcommittee charged with taxing the gambling business.

Expensive business

According to the new law, gambling halls will only be permitted in five-star hotels, recreation sites outside city limits or gambling buildings approved by the government.

In Kyiv, only hotels with more than 150 rooms will be eligible. In smaller cities such as Odesa, Kharkiv, Dnipro and Lviv, hotels will be allowed to install casinos if they have at least 100 rooms.

However, entering the gambling market will be expensive for many businesses, Anton Avdeev, a representative of Ukrainian lottery operator MSL, told the Kyiv Post earlier in January.

To open a casino, businesses have to buy a license valid for five years. Depending on the city and type of building, the cost can vary. For example, for a five-star hotel in Kyiv with over 150 rooms, the cost is Hr 283.4 million ($10.4 million) paid over the five years. Every year, the casino must also pay over Hr 826,500 ($30,500) for each game table and over Hr 56,000 ($2,064) for each slot machine.

The law will also allow bookmakers to work at horse tracks and three-, four- or five-star hotels with at least 50 rooms in Kyiv and 25 in other cities. A five-year bookmaker’s license will cost nearly Hr 141.7 million ($5.2 million), according to the law.

One can also get a license for gambling halls and online poker that costs Hr 35.4 million ($1.3 million) and Hr 23.6 million ($870,000) respectively.

To tax the gambling industry, the government needs an online system to monitor gambling equipment and software. It will only start working in two years.  

Some Ukrainian lawmakers disapproved of this rule, arguing that Ukraine will ultimately postpone the launch of the monitoring system because, after paying for the licenses, businesses will be unwilling to pay more, Deutsche Welle reported.

Long-awaited bill

Before adopting the gambling bill, the government considered over 3,500 amendments. 

Tymoshenko and her 26-member Batkivshchyna faction in parliament strongly opposed the bill. She said that it would destroy “spirituality” in Ukraine.

In 2009, Tymoshenko supported the ban on the gambling business, but today admits that it only pushed gambling into the shadows.

On December 19, the parliament failed to adopt the draft law on legalizing gambling.

“We know who is behind it,” President Volodymyr Zelensky wrote the next day on Twitter, addressing the message to former President Petro Poroshenko.

After that, Zelensky ordered that all gambling halls operating as lotteries be shut down. Law enforcement conducted massive raids on these facilities and the prosecutors opened criminal cases against their owners. 

However, many businesses still operate in the country, disguising themselves as karaoke halls and internet cafés.

The new gambling legislation will reduce legal loopholes that allow them to operate in disguise, the authors of the bill said. 

Speaking to the Ukrinform news agency, Sergey Portnov, CEO of the sports betting site Parimatch, said that the new law will eliminate corruption in his industry and will allow Ukraine to attract foreign investment.

“As an international company, we need to work with transparent legislation,” Portnov said.