4H Materials

Is Ukraine going to open a lottery market?

Is Ukraine going to open a lottery market?

On October 3, the Ukrainian Parliament registered a draft law "On Amendments to the Gambling and Lottery Laws".

A little context:

Currently, Ukraine's legislation has effectively solidified the monopoly of lottery operators who are already present in the market. To obtain a license, one must have been a lottery operator in Ukraine for at least 3 years.

Moreover, in Ukraine, new licenses in this field have not been issued for many years; instead, they have extended those that were issued in the mid-2000s. The latest attempt to legalize gambling was made in 2020. The law, along with its transitional provisions, required the adoption of new licensing conditions and, accordingly, a competition to identify new operators.

What does the draft law propose?

If the draft law is adopted, it will become possible in Ukraine for companies that have not previously operated in the country to obtain a license to operate lotteries.

This bill will thus enable the consideration of previous experience in operating lotteries in other countries, allowing foreign lottery operators to compete for the Ukrainian market.

The bill also introduces an obligation for existing operators to pay license fees until a new competition for the issuance of licenses is held. This move aims to eliminate opposition from existing operators and their non-market advantages because they are currently not making license payments. Therefore, these operators are the primary beneficiaries of the “blocking” of new license conditions.

The law also introduces several new tools for gambling, which we will discuss in the following reviews.

Dmitry Hotsyn, Senior Consultant at 4H, comments on the situation:

"The opening of any market certainly has a positive impact on its development. If these changes are adopted, Ukraine will be able to improve the lottery market by shifting competition from the local level to the global stage.

We at 4H are confident that a monopoly in the lottery market always leads to non-competitive struggles, which do not benefit either the market as a whole or the state. We hope that Ukraine will be able to achieve its goals, and we will closely monitor the situation's development".