Ukraine Rada begins ‘draft assessments’ but can it separate good from the bad and the ugly

Following the Christmas break, Ukraine MPs return to the Rada (parliament), in which the first readings of Ukraine’s newly planned gambling regulatory framework are scheduled to take place this week.

The closing months of 2019 saw seven draft regulatory proposals put to the Rada, detailing little cross-party consensus on how Ukraine should end its 10-year gambling hiatus established under the ‘2009 – Prohibition of Gambling Law.

The diverging proposals agree on developing safer gambling measures and the protection of minors but maintain several points of conflict with regards to operator restrictions, industry governance, tax structures, market size and the number of licensees.

Maksym Liashko – Parimatch

Despite outright political support for Ukraine opening up its gambling market, industry stakeholders anticipate an arduous assessment period, in which MPs will have to review the merits and falsehoods of eight diverging bills.

Speaking to SBC, Maksym Liashko, a Partner at Parimatch, said: “As far as we can see, the trend is this: the state is now moving away from the liberal concept that was put to the vote in December. And most likely in January a new bill will be introduced, which will contain more restrictions, primarily on the number of licenses and other conditions for operating a gambling business in Ukraine.

“All the same types of licenses will be issued. The question now is more likely in the content of the bill itself, rather than conceptually on the issue of legalization, which remains on the agenda. The state clearly says that the industry will be legalized.”

The governing Servant of the People (SoP) party have published the terms of its ‘law on legislating gambling services – a draft bill sponsored by Ukraine’s First Minister Oleksiy Honcharuk, acting deputy to President Volodymyr Zelensky.

However, it remains unclear whether Honcharuk’s bill is supported by the party, as SoP members have submitted counter-proposals.

Ahead of Rada assessments, SoP deputy Daria Volodina submitted ‘Draft Bill– 2285-10 – The Organisation & Conduct of Gambling’ – a proposal that would be lambasted for featuring no distinction between land-based and online casino services, attached to an ‘all-in-one’ licensing fee set a €25 million.

Speeding initiatives, industry stakeholders will hope that the Rada is quick to drop ‘unicorn proposals’, and focus on draft bills that seek to establish effective foundations for Ukraine to establish its regulatory framework.

Further concerns for stakeholders relate to the ‘transparency on licensing systems’ and whether the Ukrainian government will secure the appropriate provisions with regards to governing a gambling sector and its associated incumbents.

“We welcome the practice of adopting international licenses,” Liashko added. “It is unlikely that Ukraine has the expertise to certify such software or slot machines at the same level that is now present in England, other European countries, USA and other countries where this industry has been represented for many years.

“The adoption of international certificates, test laboratories and their results on the territory of Ukraine is very important. This will greatly simplify business entry, timelines, and reduce corruption risks.”

Opening the doors of what could become Eastern Europe’s most lucrative regulated gambling market, Liashko and further business stakeholders await for further transparency as to how the government will establish an independent regulatory overseeing the relationship body between the state and enterprise.

He concluded: “An important step that we expect is the establishment of a regulatory body. Either on the basis of the Ministry of Finance or separately as part of the Cabinet of Ministers of Ukraine. Unambiguously, all the draft bills have a provision that such a body will have to develop more detailed conditions for issuing a license.

“And this document is very important. There is no project of this bill today, but everyone is waiting for it. Because it will give a final understanding of how it will be possible to get a license, what requirements must be met.”

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