On Tuesday, August 11, 2020, President Volodymyr Zelenskiy signed the gambling law passed by the parliament on July 14. Now the gambling business in Ukraine is legalized – the document came into force from the moment of its publication in the official press.
The president’s signature on this version of the law came as a surprise to both the majority of deputies and participants in the gambling industry: they predicted that Zelensky would veto the law and return to parliament to correct mistakes.
The MPs allegedly voted by mistake an amendment to open casinos in four-star hotels. In the original version, casinos were allowed only in a five-star hotels.
In addition, the rule on the formation of a competition commission for the selection of members of the Commission for the Regulation of Gambling was mistakenly voted. This, according to the law, should be dealt by the Cabinet of Ministers and the relevant committee of the Verkhovna Rada.
These moments were considered by the deputies from the Voice and the Servant of the People to be a good reason for a presidential veto. But Zelensky acted differently – he signed the law.
“Yes, the conflict with the commission remains, but it is unconstitutional, we will resolve it later and make changes. And the 4 star hotels for casinos also were remained. We assessed all the risks and decided that it is better for us to sign it now and then fix it, than to lose the whole law and budget receipts “, – commented the presidential adviser, who was directly involved in the development of the document, Boris Baum.
Recall that a special fund for the support of medicine, sports and culture will appear in the state budget, which will receive payments from the gambling industry licensing.
According to Baum, there will be many more amendments to the law in the process of market formation. “But I think we will settle all the controversial issues,” he notes.
Table of Contents
When will legal casinos appear?
Opening a casino after the entry into force of the law will not be very easy. Now, participants in all segments of the gambling market will have to work under a license and pay taxes. However, in order to buy it, the government first needs to create a seller of licenses – a special Commission for the regulation of the gambling market.For this, according to Baum, is given two months. In addition, a special tax law for the market is not yet ready or considered, says the presidential adviser.
“The existing tax rules are disadvantageous to the budget and the market. We will form and adopt new ones,” he said.
Consequently, the market will be fully operational by the end of the year, or by 2021.
The developers of the law assure that the sale of licenses and proceeds from the gambling business will bring UAH 2.5 – 4 billion a year (the deputy of the Servant of the People Oleg Marusyak submitted the draft to the Rada, but the law was being written in the President’s Office). At the same time, tax rates are not spelled out in the document; for this, a separate regulatory act will be developed.
According to the law, sports competitions, billiards, bowling, in which a prize is provided for winning, playing on machines with material prizes (toys, sweets, souvenirs), sports poker do not belong to the category of gambling, therefore they are not regulated by this law.
What the new law provides
Who can run a gambling business
Only Ukrainian legal entities can engage in gambling business, the main activity of which is the organization and conduct of gambling. The authorized capital of such a company must be at least UAH 30 million, including securities, property and property rights. At the same time, the formation of the authorized capital from unknown sources is not allowed.
An important condition for a participant in the gambling market is the impeccable business reputation of its owners and managers. It is also necessary to confirm that the company’s owners and managers are not associated with assets in the aggressor states territory.
Where and what gambling establishments can operate
The operation of land-based casinos (with gambling tables) is allowed only in hotels of the category not only 5 stars, but also 4 stars. Casinos in the capital are allowed in hotels with at least 150 rooms, for regions the requirements for the number of rooms are lower. Also, casinos were allowed on the territory of suburban complexes (with a total area of at least 10,000 square meters, consisting of two or more buildings, among which there must be a five-star hotel) and on the territories of specially created special territorial gambling zones.
In the capital, a land-based casino can accommodate at least 10 gaming tables (including 2 roulette tables) and 50 slot machines.
Expert opinions
Gambling market experts are pleased with the adoption of the law on casinos in Ukraine. Now the business that existed in the shadows will become safe and will generate income for the state. Many foreign companies, for example, Michael Boettcher’s Storm International, have been waiting for this moment in order to legally enter the market and operate in the legal field.
Experts note that according to the experience of many European countries, legalization will be beneficial in several ways at once. The state will receive additional income, the tourism industry will receive a serious impetus for development, citizens of Ukraine will receive thousands of jobs with good income. For example, many Ukrainian employees of Storm International, Darren Keane, the director of the company, noted that they would be happy to return to their homeland and work in an already familiar field.
Also, said Darren Keane, Storm International sees excellent prospects in Ukraine for the development of gambling tourism, since the state has all the conditions for this.