4H Materials

Online gambling has been restricted in Ukraine

On 20 April 2024, the President of Ukraine signed a decree on counteracting the negative consequences of functioning gambling on the Internet. Such a decree was the result of a decision of the National Security and Defence Council of Ukraine.

Dmitry Hotsyn, Head of CIS Desk and Senior Consultant at 4H, has commented on the situation.

Recently, we have discussed the recommendations of the adopted amendments to the gambling legislation by the Committee on Finance, Taxation and Customs Policy of the Parlament of Ukraine in our previous article (in case you missed it, you can find it here: https://www.linkedin.com/pulse/new-stage-ukrainian-gambling-regulations-4hagency-xsyfe/?trackingId=HRbcjhhcSSacjnVS%2F%2FfJPQ%3D%3D).

The Presidential Decree on counteracting the negative consequences of functioning gambling on the Internet consist of 1) strengthening of responsible gambling measures on the Internet; 2) strengthening of inspections of operators; and 3) next steps for other authorities.

Strengthening of responsible gambling measures on the Internet

The Decree regulates responsible gambling measures for online gambling operators: i) development of a procedure for restricting all forms of gambling advertising; ii) prohibition of the registration by the casino gambling operators on the Internet of several accounts for one player; iii) determination of the maximum time of continuous participation in gambling on the Internet per day for one account and the introduction of mandatory breaks in the game, determination of the maximum playing time per week; and iv) carrying out a national information and clarification campaign on the dangers of gambling etc.

Also, the Decree introduced a ban on servicemen accessing gambling establishments and/or participating in gambling on the Internet during wartime.

These changes are generally due to the general trend in European countries towards responsible gambling mesures. However, how much were these restrictions necessary? Earlier we mentioned the first Ukrainian report on gambling addiction conducted in the middle of 2023[1], according to the results of the report, it was indicated that gambling addiction does not have a high rate, even though it has a high level of popularity among Ukrainians. It is important to note that the research was conducted during the war in Ukraine. Perhaps these steps of the Ukrainian authorities were made based on a large discussion among the population rather than objective indicators.

Strengthening of inspections of operators.

The Security Service of Ukraine, together with the authorized bodies, must ensure within a two-month period that checks are carried out on gambling operators regarding their compliance with the sanctioning legislation of Ukraine, based on the results of which measures will be taken to apply appropriate sanctions to gambling operators, in particular, provided for by the Law of Ukraine "On State Regulation of Activities Regarding the Organization and conducting gambling", including the cancellation of licenses, as well as, if there are grounds, to prepare and submit to the Cabinet of Ministers of Ukraine proposals regarding the application, cancellation and amendment of special economic and other restrictive measures (sanctions).

Also, the provisions of the draft law, which was recommended by the Committee on Finance, Taxation and Customs Policy of the Parlament of Ukraine, establish inspections of operators in wartime. As a conclusion, operators in the gambling market will be checked thoroughly by the authorities in Ukraine.

Next steps for other authorities

The Decree describes further steps for other authorities (The Ministry of Digital Transformation of Ukraine, the National Bank of Ukraine, the Ministry of Health of Ukraine etc.) to fulfil additional duties to ensure the mentioned two points of the analysis.

In our point of view, this decision of the Ukrainian government underlines the large discourse among the Ukrainian population regarding gambling. Although the draft law amending the law on the Gambling Act has not yet been finally adopted by the Ukrainian parliament, the Ukrainian government is increasing the regulatory restrictions. On the one hand, such restrictions may improve the mesures of responsible gambling in wartime (including servicemen), but on the other hand, operators may lose interest in the Ukrainian gambling market. As a result, operators will not want to obtain a licence from the regulator and will operate as offshore operators. This may increase the negative consequences that the Ukrainian authorities want to minimise.

[1] https://drive.google.com/file/d/1CAz_A70D4jGOFs1duwIWp6J25N3l7Kdt/view