Gambling Business in Ukraine: From the Lottery to the Casino

“The process got off the ground” — this is how the Ukrainian gambling market can be described. It should be recalled that gambling in Ukraine is in the shadow segment and is considered illegal. However, the situation may change at any time, since the government of the country is working on the new bill improvement rather actively. It is aimed to legalize the gambling industry completely and set a stream of budget revenues on short notice.

The Gaminator team has collected detailed information about the latest changes in the Ukrainian market, from the state of the national lottery organizer to future standards for the placement of slot machines. Subscribe to keep up to date with current events and the latest news.

We always monitor the market and select only useful information that allows us to develop the gambling business as efficiently as possible.

History of Gambling in Ukraine

The gambling industry in Ukraine began its development relatively recently in 1991. The first legal gambling house was opened in the country during this period. The establishment was working in Kyiv, in the hotel complex "Kievan Rus."

By the mid-nineties, gambling houses spread throughout the country on an enormous scale.

The first attempt to control the financial flow of the gaming industry was made in 1996. The following solution was the result of the innovation. The gambling rooms became private enterprises, but the state received its share from one-armed bandits and roulette.

In 2002, lotteries were nationalized (monopolized) by presidential decree.

The first significant campaign for the mass extermination of one-armed bandits swept in 2005. The state apparatus decided to transfer slot machines to special rooms and take some measures to protect minors from games of chance.

Later, representatives of different parties and factions tried to take control of gambling in Ukraine. It is not known how the further redistribution of power would have ended. However, the tragic incident had happened and had been publicized by the media. The gambling hall caught fire in Dnipro in the spring of 2009. The blaze killed 10 people.

By the end of May, the draft law prohibiting gambling in Ukraine was being introduced to Verkhovna Rada. It was approved unanimously. The decision resulted in mass protests and millions of losses of legal operators.

The president rejected the decision, focusing on the fact that the revenue from this casino activity makes up more than 3.5 billion hryvnias annually. Nevertheless, deputies again voted unanimously again, overcoming the presidential veto. The ban on organizing the gambling business in Ukraine becomes legal on June 25, 2009.

The result of such innovation was the rapid modernization of gaming rooms. Some establishments were reoriented to poker clubs, and the others started underground activities without signboards and advertisements.

The situation received a new impetus for development in 2012. In October, Verkhovna Rada adopts a bill on state lotteries. After that, slot machines turned into betting equipment, and traditional gaming halls started offering lotteries instead of gambling games.

Gambling News: Latest Developments

The most long-awaited and discussed event of the near future is the new law on gambling. Decree No. 2285 was submitted to parliamentary committees a few weeks after the deadline set by the president. At the same time, the text continues to be changed and supplemented.

The “struggle for jurisdiction” between the financial and economic committees is considered one of the reasons for the delay. Nevertheless, this showdown could not last forever. The president set a clear deadline for legalizing the gaming area. The gambling industry should start coming out of the shadows on December 1 of this year.

Basic Principles of the New Regulation

Despite ongoing adjustments to the text of a future bill, the following nuances and key points can be highlighted:

• casino games and sports betting will be allowed in all forms;
• profit from gambling will be used to finance medicine, sports, and cultural sectors;
• a number of market participants will be limited (20 casinos, 800 betting establishments, 160 gambling halls, 5 ground-based, and 5 virtual poker rooms);
• a state monopoly in the lottery field will be created (the supplier must open at least 1 thousand points of sale in the country);
• 10 licenses for Internet business will be provided;
• a single online system for controlling rates, deposits, payments, and other cash flows of the industry will be created.

What Types of Gambling Will be Available to Players? 

One of the critical points of the new regulation is the placement of gambling zones. Traditional casinos are planned to be open exclusively on the territory of 5-star hotels. Moreover, there will be a limit on the number of rooms.

For example, the gambling business in Kyiv will be presented in hotel complexes with 200 rooms. For other cities, the minimum number of rooms in future casino hotels must be at least 150. The regulator plans to issue 20 licenses with a detailed description of the number of gambling tables, slot machines, features of employees, and other nuances.

It will be possible to open a slot machine hall in 3- and 4-star hotel complexes. The legalization implies the presence of 250 devices. Most zones will be located in the capital of the country. In total, up to 15 thousand slot machines will operate on the territory of Kyiv.

Gambling in Odesa, Lviv, Kharkiv, and the Dnipro involves opening up to 50 establishments in the city. The limit for smaller towns is 20 gaming halls.

It is worth noting that poker in Ukraine is equated to a sports competition. The new bill also implies the opening of the poker club network. The owners of such establishments will receive the right to hold tournament competitions lasting up to two weeks.

The draft law will affect the sports betting area too. The state will allow the creation of about 800 betting establishments throughout the country.

The lottery business will be represented by a state monopoly.

Risk Insurance and Bank Guarantees

In accordance with the provisions of the new law on gambling business, each of the gaming activities organizers must have a bank guarantee and a fund to cover the winnings of users:

• 30 million 45 thousand hryvnias for casinos and bookmakers (5 million (or less) should be paid immediately upon the customer’s request. Higher amounts be deposited within 10 days from the date of determining the winner).
• The 70 thousand hryvnias sum is some kind of “airbag” for owners of slot machine halls.
• A bank reserve for lottery operators is 417.3 million hryvnias.

Bans and Fines

The prohibition on visiting gambling establishments will apply to two categories of the population:

• minors (citizens under the age of 19);
• “self-limited” users (clients who abandoned the gaming activities independently for six months to three years period. This type of ban can also be introduced by relatives of the gambling addict by court order).

It is planned to control the industry through a special virtual system. People wishing to make investments in gambling projects will bid in an open online auction.

The lucky ones will have to wait for a license, and their data will be entered into five registries immediately. The equipment of ground-based establishments will be connected to a remote monitoring system that will allow representatives of the authorities to turn off the devices and monitor the situation in gaming halls 24/7.

The penalty system is as follows:

• double license fee in the case of permit absence;
• the organization of the game outside the gambling establishments will be punished by double annual license payment;
• an eight-fold permit fee in the case of the lack of equipment documentation;
• illegal modification of equipment implies a fine from 4 million hryvnias per unit;
• 2.86 million hryvnias fine threatens the owners of gaming establishments that will allow minors to play;
• betting through unlicensed equipment will cost 4.173 million hryvnias;
• violation of the advertising campaign provisions will be punished by1.251 million hryvnias penalty.

In addition to financial obligations, a criminal liability system will be launched in the industry in 2021.

Betting

As mentioned above, gambling in Ukraine has been banned at the state level since 2009. However, some bookmakers have successfully “turned” their establishments into Internet cafes, and organized their activities using the lottery licenses.

The betting market is considered semi-legal because the player is obliged to pay the tax charge for each winning. Moreover, lots of gambling service providers are the official sponsors of various sports and particular teams.

Bookmaker as a Business

Law enforcement experts claimed that the monthly turnover of bookmakers in Ukraine exceeded $100 million at the end of 2018.

It is worth highlighting the largest providers of betting services:

National Lottery of Ukraine

The company for organizing lotteries began its history in 1997 and established itself as a market leader almost immediately.

The brand activities are controlled by the Ministry of Finance and are carried out based on license No. 446756.

The operator received the right to organize such lotteries:

1. "Super Lotto";
2. "Lotto Maxim";
3. "Keno";
4. “A Moment of Luck”;
5. "Lotto Three".

Interesting Statistics

During its existence, the National lottery of Ukraine has demonstrated the following indicators:

• the total size of the won jackpots is 300303000 hryvnias;
• the operator paid about 1238 large prizes;
• 60 jackpots have been won in the history of “Super Lotto”;
• the brand has developed 16 unique lotteries focused on the Ukrainian market.

The advantages of NLU include the presence of a virtual format. The company provides the opportunity to place bets as comfortably and quickly as possible, through both personal computers and mobile devices for its players. It is worth noting that prizes are awarded the next day after the draw.

Conclusion

The Ukrainian gambling industry is about to become one of the completely new sales markets. It is time to consider investing in gaming projects and become the source of this promising area.

Given the current situation, the question of the complete legalization of real money gambling may be resolved very soon. Moreover, the set of measures covers all aspects of market regulation and provides the possibility of transparent control of the industry. The virtual segment will be under strict control too. The online business will be protected as much as possible.

It is time to start your own business. Leave a request to the Gaminator manager, and we will offer the best solutions for gambling start-ups of various formats. Game content from leading world providers and a rich assortment of exclusive developments are always available in our arsenal.

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