Finally, the Government of Ukraine has passed a resolution in the Parliament where both the physical and the online casinos have been legalized on July 14, 2020. Verkhovna Rada, the legislature of the Ukraine has made it legalized where the resolution won by a 248-95 margin. Under the new legislation, land-based casinos, bookmarking and online gambling are all legalised and the casinos will only be located in the hotels.
The bill was first placed in the legislature in October 2019 by the ruling Servant of the People Party where it failed to get passed. The bill was again placed with some additional reforms and finally it was legalized. The legal age of participating in online gambling has been raised to 21 under the new law. More than 100 such amendments raised by the Opposition was passed by the ruling party and after all these, the final bill has been placed and got passed on July 21.
Approval to the Ukraine casinos bill has been given by Committee on Tax and Finance as the final consent to the taxation and license fees are to be decided by this committee only. The casinos need to pay some license fees to the Government for running their gambling business. The license fee structure for online gambling has been set as UAH30.7m, which is equivalent to £906,000/€1.0m/$1.1m for five years and it needs to be renewed after every five years after paying the above-mentioned fees. The license fee for the bookmakers has been set as UAH70.8m. On the other hand, the casinos which are located in the hotels situated in Kyiv, the capital city of Ukraine need to pay a license fee of UAH121m. If the hotel is located elsewhere outside the capital city, then the casino needs to pay UAH 70.8m as license fee.
The new bill also imposes some restrictions on the ownership and origin of the business while operating in the market. The new terms stated in the bill mentions that residents of an occupying state or any aggressor state related to Ukraine must not control the slot machine suppliers and the operators. Sources from the iGB confirmed that this portion refers to the businesses owned by Russia as it has been clearly mentioned in the legislation of Ukraine.
This particular clause has been extended to businesses which are owned by Russia and have Russian directors or accounting heads in their board of directors having UBO (ultimate beneficial ownership).
Earlier casinos were banned from giving publicity to their businesses anywhere, which included even the online platform or through any third party marketing. Marketing of the casino brands was totally restricted. Now the new committee has removed all such restrictions and the casinos can give publicity wherever they want to. This is considered to be a great relief to the casino companies as it is very important for them to publicize their business in order to get clients. As a casino gets more players, it attracts more investment and hence more return or profit in the long run.
At the next step, the Rada is thinking about how the industry is going to be taxed. Different people have submitted five different proposals on taxation of the casino companies which are under consideration.
A bill was filed by Marusyak on gambling which has prescribed for a GGR tax of 5% on bookmarking, 12.5% on the slot machines and 10% for online gambling. Though this bill will be compared with the four other proposals, this one is most likely to be accepted by the Rada authorities. If any of the 5 proposals on the taxation of casinos are not passed, then the Rada may introduce another bill in the Parliament.
In another bill, the proposal of tax rate for lotteries and gambling was set as 25% and for the bookmakers the proposal was 7.5% GGR and only 12.5% for online gambling. The third proposal has asked for 25% flat taxation rate across all types of casino businesses, both offline and online.
The legalization of casinos in the Ukraine is going to bring about a sea change in the operations and also revenue model of the industry. The Government, on the other hand will start filling their coffers once the imposition of taxes and license come into effect. For more info about gambling in Ukraine and Ukraine casinos visit https://www.ukrainecasinos.com/gambling-in-ukraine/
