Ukraine gambling body questions bill

Ukraine gambling body questions bill

Wednesday, December 9, 2015 Totally Gaming
Irina Sergienko believes that overall operating costs will stifle the market

New rules that would legalise gambling in Ukraine have been criticised by the head of the country’s leading trade group in the sector.

Irina Sergienko, director general of the All-Ukrainian Union of Bookmaking Development, told Betting Business Russia that high tax and licence rates could lead to the market being dominated by a small number of large companies.

Sergienko suggested that there must be a reduction in either the 20 per cent gross gaming revenue tax or the annual licence to reduce the overall burden on operators.

“The combination of a high royalty and tax rates are, in my opinion, not a very good option,” Sergienko said. “This model can be applied only to very large companies that operate according to the law of large numbers. They will come to seize the market and monopolise it.

“If we want to create a healthy, stable emerging market with long-term investment, you need to follow the path of rational pragmatism.”

The bill, unveiled last week by the Ministry of Finance, is only at draft stage at present, and Sergienko believes it could still be some time before gambling – outlawed in 2009 - is legal once again in Ukraine.

As it stands, land-based casinos would be subject to an annual license fee of between €300,000 ($328,000) and €1m depending on the population of the local area, while a bookmaking licence will cost €1.5m per year, plus €1,500 to €3,000 per retail shop. Online casino operators would pay €1.5m per year, while an online betting licence would cost a further €300,000.

To qualify for a new gambling licence, companies must be based in the Ukraine and must demonstrate that they have at least €2m of their own capital.

Under the terms of the bill, a single national lottery operator, which must have five years' experience, operate in at least three foreign countries and have a turnover of more than €3bn, will be selected following a tender process.

“On the whole, I am positive about the bill,” Sergienko said. “There are rough edges, which I think will be eliminated in the process of finalisation.

“The main thing is that the document takes into account the proposals that we have expressed in the course of dialogue with the government for a year and a half.”

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