After nearly ten years, Ukraine is all set to legalize and re-regulate gambling. Given how sports and casino gambling are being legalized now, let’s go through the benefits accruing to the government, players, and operators due to this move.
Situation prior to the ban
Ukraine banned almost every form of gambling after a fire broke out at a casino located in Dnipro, back in 2009. Back then, the gambling industry had been experiencing tremendous growth, going from a valuation of €246M to over €967M between 2005 to 2008. Here is a breakdown of the license fees and revenues collected by government agencies before the government implemented the ban.
Revenue breakdown prior to the ban
- Betting companies: €158M;
- Lotteries: €66M;
- Casinos: €37M;
- Slot machines: €705M.
License fees prior to the ban
- 2006 – €79M;
- 2007 – €85M;
- 2008 – €88M;
- 2009 – €10M.
After the implementation of the ban, many companies rebranded themselves as lotteries, which was the sole remaining gambling type that remained legal. The Finance Ministry believes that 80% of gambling in the country takes place in the black market. The lottery system is widely considered to be plagued by corruption. Illegal casinos and online sports gambling are extremely popular throughout Ukraine.
How will the lifting of the ban change things?
Benefits for the operators
Gaming licenses can be availed by interested entities via electronic auction. The holders of this digital license will be allowed to offer sports betting and casino gaming services. Operators with a valid gaming license shall be allowed to operate legally without resorting to grey or black-market solutions like they used to.
Online operators stand to gain a lot by entering the legal, regulated market. It is estimated that the black-market rakes in revenues ranging between €300M – €1B. Most of these transactions will soon be conducted in regulated channels once the ban has been removed.
Benefits for the government
The government’s increase in income due to this move cannot yet be reliably estimated as many other factors are yet to be finalized. However, the legalization is likely to increase the government’s revenues by around €200M – €400M. This money will be spent on social programs – thus benefiting the country compared to the past era when millions of euros would simply be diverted to accounts outside Ukraine.
The government is facing enormous pressure from Western and European countries and its own citizens, who are demanding strict measures against corruption. The legalization of gambling will lend credibility to President Zelensky’s commitment to weeding out corruption in the country.
Benefits for players
Once the ban is lifted, players will be allowed to gamble & bet safely and legally on the premises of licensed operators and not be worried about legal issues. Players will have legal options against operators as well, should any disputes arise. This was impossible in the past due to the ban on gambling.
At the moment, the market is a virtual monopoly as there are only 4 licensed lottery operators, with 3 of them carrying out lottery activities. Post-legalization, many more companies are expected to offer betting products, thus increasing competition in the industry and driving up demand for quality products.
Benefits for Ukrainian citizens
Casino licenses will be issued to luxury 5-star hotels under the new legislation. President Zelensky has been vocal about his dream of creating a new ‘Tourism Cluster’ near the Black Sea, which could boost tourism in the region. This would generate jobs and boost the economy as well. Gambling tax revenues will be used for funding social programs related to culture, sports, and healthcare, thus enhancing the quality of life for Ukrainian citizens.