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New bill makes online gambling legal in Ukraine

New bill makes online gambling legal in Ukraine

by Mira in Industry | 7 August 2020

The online gambling industry in Ukraine is about to soar thanks to the passing of a new law. Online gambling is now legal in Ukraine after a special sitting of the Verkhovna Rada.

Voted into law by 248 of 343 members, Draft Bill 2285-D had its second reading and was greatly supported.

Originally proposed back in October 2019, the bill didn’t pass its first reading. After a number of amendments and adjustments were made to the bill, it passed in January 2020.

Changes to the amended bill

The Ukrainian government had a firm stand against gambling in the country as all forms were banned except for state-run lotteries. This was put in place in 2009 after shots were fired in a slots parlor which led to nine deaths. But the world (and the gambling industry) has changed over the last 11 years.

Thanks to changes made to the bill, the online gambling legislature is set to come into effect at some point in August 2020.

Changes to the now legal bill include the following:

  • All players partaking in online gambling in any form must be at least 21 years old.

  • Originally outlawed, affiliate marketing will be permitted as well as other forms of third-party advertising. However, it’s not yet clear what restrictions will be applied to gambling ads.

  • Operators wanting to apply for a license will need to pay the standard fee of UAH 30.7 million (£906,000/€1.0 million/$1.1 million).

  • There will be restrictions on who can operate within the Ukraine market. The bill states: “Operators must not be controlled by residents of an occupying state and/or the aggressor state in relation to Ukraine.” This includes businesses owned by Russian citizens.

  • The above point will also be applied to directors, heads of accounting, or those with beneficial ownership in gambling businesses. Game suppliers (except for land-based slot providers) will not fall under these restrictions.

More changes and clarifications on what the new law will allow are sure to follow within the coming weeks.

Taxes and the future

Now that the bill has been passed, it must be decided what role taxes will play in the online gambling industry for Ukraine. There are a number of bills up for consideration, each outlining a different method of handling taxes and gambling in the country.

The most popular bill is 2713-D. This bill proposes that online gambling and lotteries in Ukraine are taxed 10% on all gross gaming revenue. Land-based activities would be taxed 5% and land-based slot machines would be hit the hardest with a tax rate of 12.5%.

Other bills include variations of these tax laws such as all gambling being taxed 25%, while others call for lotteries to be taxed much higher than other forms of gambling.

One bill that stands out from the crowd is 2713-3 which calls for zero taxes but instead suggests that the government earns money based on licensing fees.

It remains to be seen what will be decided regarding this matter, but the future seems to be bright for online operators in Ukraine.

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