Opposition says current taxation rules are preventing companies from wanting to seek license.
Gambling Adverts Are Back
A year has passed since the Ukrainian government decided to legalise gambling. Despite the continued existence of illegal gambling halls, it has been called a success. Sounds like everybody is happy, right? Not really.
During this first year, 40 casino gambling licenses have been issued by the government. By bringing back gambling in legal form, it has also resulted in a ton of marketing. Gambling adverts are very much back on public transportation, billboards and on the TV-screens.
€160 Million in Yearly Taxes
Ukrainian Gambling Council Chairman, Anton Kuchukidze, has already declared the past year as being a huge success. Even the President Volodymyr Zelenskyy believes legal gambling would be able to bring the country around €160 million on a yearly basis.
Banned Due to a Fire
Back in 2009, the country experienced a tremendous tragedy as a fire broke out at one of the gambling halls. It was because of this horrific event in the city of Dnipropetrovsk that the government chose to put a ban on all casinos, bookmakers and internet gambling. A ban that existed until August 2020.
Even though gambling was legal and under government control before the 2009 accident, it was highly unregulated.
Lottery Shop Front
While the previous ban was supposed to help get the situation under control, it turned out to have the opposite effect. In order to stay in business, the illegal gambling halls came up with a system to fly under the radar. Due to the fact that lottery shops were still legal, this was used as a front which quickly spread across the nation.
New Rules apply
The new rules means that only hotels of a certain standard will be granted permission to open casinos. Heavy fines for those who do not apply to the rules have also been implemented to keep operators in check.
New Companies Are Discouraged
While the government claims it’s been a success story, the opposition seems to have plenty of reasons why it isn’t so.
For starters, online casinos must cough up an annual fee of €170.000 in order to operate. Gamblers on the other hand have to pay a hefty 19.5% tax on all winnings. According to Sergey Potapov, CEO of online casino Cosmolot says this isn’t going to work and actually prevents new companies from wanting to enter the market.
It doesn’t help that a member of the country’s Gambling and Lottery Regulatory was recently arrested on suspicion of taking a bribe in return for granting a gambling license.
A Change Might Be On the Way
At the moment, there is an ongoing discussion on how to change the law regarding the annual fee. However, nobody knows how long it will take to implement and until that is settled, Potapov is convinced that no new companies will enter the market.
“We are willing to pay taxes and do so,” said Potapov. “But the tax system will need to change to be competitive to compete with Russia, Belarus, or other countries. I think that many companies are waiting to enter the market until the new law is in place. It is not sustainable as it is right now, and everyone understands that.”
Willing to Pay the Taxes
There is still a chance for the legalisation to become the success story the government so desperately needs but there’s still some work left to be done. Especially if Ukraine is hoping to bring in more companies that are willing to pay the taxes.
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