Ukraine Gambling Reforms Feature Heavy Licensing Fees

Ukraine’s ruling party, the Servant of the People (SoP) party, has just released its new draft law on how the country will legislate new gambling services.

These new laws aim to end the Ukraine’s ten year long gambling ban. The release was delayed by three weeks because several vested interests were trying to influence the legislation.

The new law aims to establish a new gambling commission that will directly report to the country’s Ministry of Finance. Its main job would be to give out gambling licenses and to act as regulatory oversight over the Ukrainian gambling market.

Besides that, there will also be a special fund which will be financed by licensing fees. This will be handled by the Ministry of Finance and will contribute to various causes which include healthcare networks, cultural development, and national sports programs.

The initial plan for the new framework is to have a limited number of licenses. The government’s plan is for there to be 20 national casinos, 80 retail bookmakers, and 160 gaming hall licenses. As for online gambling operators, the plan is to have ten participants. All of the licenses will last five years.

Licensing will be awarded via an electronic auction method, which is confusing to many Ukrainian gambling stakeholders. This is why they have asked for more details on the process. The government insists that it is the fairest way to award licenses but has not released any information on it yet.

High Licensing Fees

Besides the obscure licensing process, the other concern that potential investors in the Ukrainian gambling market have is how high the licensing fees are. 

According to the draft, a license to operate a casino in the capital Kyiv is estimated to be the most expensive at UAH 37 million per year (€1.3m). Smaller cities are less expensive than Kyiv but still costly as the licensing fee is set at UAH 25 million (€800,000).  

Additionally, retail bookmakers are supposed to pay an annual license fee of UAH 750,000 (€25,000) for every shop. If they want to add gaming machines, the fee is UAH 30,000 (€1,500) per unit. Besides that, there will only be 800 premises allowed to offer gambling services in the country.

For digital operators, the license fee is UAH 25 million (€800,000) with additional taxes to be added. Most of the gaming operators believe that the licensing fees are way too high and hence they are not very keen to move forward.