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Newly Re-Regulated Ukrainian Gambling Sector Rocked By Scandal
By Shane Addinall Sep 27, 2020 LegalityGambling and the Ukraine seem to be uneasy bedfellows. With an 11 year ban finally behind it and the new gambling act written into law, the last thing President Volodymyr Zelenskyy expected was a scandal that would include local government officials.The Ukraine has seen a revolution in the gambling sector this year with its re-legalisation after an eleven-year ban. Gambling was banned back in 2009 not for concerns over potential financial risks or gambling addiction but rather because a fire in a gambling hall resulted in nine fatalities.
These fatalities led to parliament signing the "On Prohibition of Gambling Business in Ukraine" (Gambling Ban Law) on May 15th, 2009 and saw an addendum on June 23rd extending this ban to include online casinos and online sports betting.
The one exclusion was the state-run national lottery which has run since then without interruption or review.
Long Road to Freedom
While it took only days to shutdown gambling in the Ukraine it has been an arduous 6-year journey to get the industry re-established. President Volodymyr Zelenskyy signed bill 2285-D “On State Regulation of Organising and Conducting Gambling" (Gambling Law) into law on June 23rd, 2020 and it came into force two days later June 25th.
CEO of Parimatch, Sergey Portnov, said:
“I would firstly like to congratulate President Zelensky for delivering on his pledge to legalize gambling in Ukraine. He has a shown that he is a man of his word and we fully support his agenda to liberalize the local economy.”
The law regulates and provides licences for all form of gambling including casinos, sports betting and poker, with provision made for both land-based and online services.
Licence fees are also not standardised with the location of land-based casinos featuring heavily in the cost. Running a land-based casino in Kyiv will cost just over $10 million for a five-year licence, while other locations will cost approximately $5 million. This excludes equipment fees which range as high as $30,000 per roulette wheel.
Online gambling licences are little more temperate with an online casino licence costing just over $1 million for five years, and online poker costing $850,000 for the same period. There is also an annual gross gaming revenue tax of 10%
A Fly in The Ointment
With the hardships already overcome in getting gambling re-regulated in the Ukraine and with an eye to its potential as a valuable financial resource the last thing anyone expected was a gambling-related scandal, especially one that includes local officials.
It was announced that the Ukrainian Security Service (SBU) has arrested two officials from the Smila Raion region who had been complicit in allowing an illegal gambling operation to operate under the noses.
A high ranking figure in the regions National Police and one of its local prosecutors were found to be accepting bribes from a local underground gambling business and in return, they would not bring the operation and its owners up on charges.
The SBU is continuing its investigation into the illegal casino, which has been shut down, to determine if any other officials are involved and just how much money the operation was able to make before being raided.
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