4H Materials

Ukraine: running up the wrong hill

The Ukrainian Parliament has just passed a preliminary draft law focusing on significant amendments within the gambling sector. This includes:

- The dissolution of the existing gambling regulator, KRAIL, and the establishment of two distinct bodies to oversee lotteries and games of chance;

- A comprehensive ban on gambling advertisements; and

- Restricting military personnel in participation in games of chance.

These measures extend a series of previous actions—such as the implementation of sanctions, payment limitations, and unpublicized yet common practices by regulatory bodies—aimed at overhauling the Ukrainian gambling framework.

The draft law is now set for revision before its second reading, with the final vote anticipated in the upcoming weeks.

Although it's still too early to make final judgments, these reforms could undermine the effectiveness of promoting Ukraine as an attractive market for international gambling operators, which was a major reason Ukrainian authorities cited for revitalizing the market a few years back. We anticipate two primary outcomes from these changes:

- The absolute prohibition on advertising will likely increase the market share of offshore operators, who can readily purchase advertising slots in the consenting media;

- The reorganization of a regulatory body that has only been in existence for three years sends a discouraging signal to investors interested in entering a new market.

Additionally, the draft law overlooks critical issues such as the high taxation of gambling operators and the need to reduce exorbitant licensing fees—further areas of concern for operators considering the Ukrainian market.