Gambling regulation in Ukraine

On the 14 July 2020, parliament has passed a new law that will be regulating a gambling industry in Ukraine.

The law aims to place the gambling business into the legal framework as the previous measures predominantly directed to prohibit gambling in Ukraine (Gambling Ban Law, 2009) have not solved the problem. Therefore, Ukrainian authorities decided to go another way around and legalise the industry which like the other industries, similar in their nature, cannot be banned but only regulated.

Gambling activities

So, according to the new Gambling Law, the following activities shall be allowed to conduct in Ukraine:

  • gambling in casinos (land-based casino and online casino)
  • betting activity (betting firm and online betting)
  • gambling on slot machines
  • online poker.

To start operating your business in Ukraine on one of the permitted gambling activities, you must receive a licence from the Commission on gambling and lottery regulation (“Gambling Commission”). Gambling Commission will serve as a regulator of the gambling industry. Among the other tasks, it will be responsible for issuing and annulling licences, running the registers of the gambling providers in Ukraine, conducting inspections, etc.

However, before applying for so “wished” gambling licence, you first would have to find yourself among the subjects who actually are allowed to make the application according to the new law.

Criteria to be met

The criteria which are necessary to meet before applying for the licence:

  • You have a legal entity that is duly registered under the laws of Ukraine as only residents are allowed to operate a gambling business in Ukraine. Ensure that the main economic activity of your company is conducting a gambling activity.
  • Charter capital of your company shall amount to not less than 30 mln UAH (approx. 1.07 mln USD) and be formed without the state budget funds.
  • Be ready to provide all the requested information on the nature and the origin of your funds.
  • The management of the company, chief accountant, substantial shareholders, and company’s beneficiaries must have a good legal standing. According to the Ukrainian law, good legal standing shall be interpreted as the amount of information on the person allowing the regulator to conclude that a person in question did not violate the anti-corruption law, law on financial services for the past three years (if another term has not been set) and does not have a criminal record.
  • Beneficiaries of the company do not relate to a state-aggressor or company does not hold companies that are being related to a state-aggressor according to Ukrainian law.
  • No company’s participants are being registered in states that are placed into the FATF list.

Preparing the venue

Let us say, you have met the requirements and ready to proceed further. Next, you will have to establish a deposit account or bank guarantee of 34 mln UAH (approx. 1.2 mln USD).

What is more, if your gambling activity is supposed to be held at premises and not online, you will have to obtain relevant permission from the Gambling Commission proving that your premises are perfectly suitable for conducting a gambling activity.

To obtain such permission, you will need to submit:

  • documents on property right (certificate or lease agreement)
  • certificate on the hotel category
  • technical certificate.

However, those are just general requirements for the potential investors and do not consider the particular type of gambling activity.

Selecting the place to play

Depending on a type of gambling activity, you will face some specific requirements.

If your choice has fallen on running a casino:

a) the casino can be operated in the territory of five-star hotels with at least 150 rooms in Kyiv or at least 100 in the other locality; or
b) in the territory of a country house hotel with the area of at least 10 000 m2 with the assigned category of a five-star hotel.

If it is betting activity, you will need to find a five, four or three-star hotel with at least 50 rooms in Kyiv or at least 25 in the other locality. A betting activity can also be operated on racetracks. Gambling on slot machines has the same requirements as the betting activity.

Moreover, the authorised companies, foreign or domestic labs, must certify all the gaming equipment and it must be produced earlier than 2019.

Applying for the licence

After meeting all the requirements, you can file the application. Your application shall provide the regulator with the following information:

  • name of the applicant
  • identification code
  • banking requisites
  • type of licence you are applying for, etc.

Remember to support your application with the notarised constitutional documents of the company (applicant) and Extract from the relevant register (banking, court, trade, etc.) on the applicant. Remember that the relevant Extract shall be formed no later than 90 days before filing the application. In addition, you will be asked to provide lease agreement or document on property right and the information on the sources that have been used to form a charter capital.

Turn to pay

Finally, when the applicant was granted with the five-year licence on gambling in the casino (presumably located in Kyiv), he will have to pay a fee for the issued licence of 28.3 mln UAH (approx. 1 mln USD). Licence for gaming at the other locality will cost him approx. 391 thousand USD. On top of that, an annual fee will be charged for every licence granted on gambling table (roulette) of 826 thousand UAH (approx. 29 thousand USD) in Kyiv.

The right to conduct a betting activity in its turn will require the applicant to pay a fee of 14.1 mln UAH (approx. 507 thousand USD) not mentioning the annual fee for running every betting shop (approx. 5 thousand USD).

Last, but not least, the Gambling Commission shall be formed within two months from the day when the Gambling Law will come into effect, and it shall happen before the end of August.

To sum, we did not cover the issue of online gambling and some other very important in our view provisions of the new Gambling Law. The main task of this very article was just to introduce you to a new page in the gambling business of Ukraine.

Watch for our next articles, and we will keep you updated on every critical issue of the gambling industry.

Partner of O.G. Partners
Roman Onyshkevych

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