SBC News Licensing fees weigh heavy on Ukraine's gambling reforms

Licensing fees weigh heavy on Ukraine’s gambling reforms

Ukraine’s First Minister Oleksiy Honcharuk has sanctioned the release of the Servant of the People (SoP) party’s ‘draft law on legislating gambling services’, which aims to retire Ukraine’s 10-year ‘Prohibition of Gambling law mandate.

Published three-weeks later than originally anticipated, SoP ministers blamed the delay on vested parties trying to influence the development of legislation.

SoP’s draft frameworks will seek to develop a ‘new gambling commission’ reporting directly to Ukraine’s Ministry of Finance, charged with operating licensing procedures and providing further department’s with regulatory oversight on market developments.

In addition, SoP maintains that there will be development of a ‘special fund’ supporting healthcare networks, cultural development and national sports programmes, financed through the license payments and distributed by Ministry of Finance to appropriate parties.

Initial frameworks see SoP limit operator licenses across land-based and digital gambling verticals, in which the government will allow for ‘20 national casino’, 80 retail bookmaker and 160 ‘gaming hall’ licences.

SoP has chosen to limit digital operator licenses to 10 participants, who will be allowed to service both sports betting and online casino services.

Draft law provisions maintain that all Ukraine licenses will be valid for a period of five years across all related gambling disciplines.

On first publication, Ukraine business stakeholders have demanded that SoP detail clear guidance with regards to licensing procedures which will be undertaken through an ‘electronic auction’ model.

SoP indicates that an ‘electronic auction’ is its preferred method for a fair licensing application process, but as yet has not published any information with regards to its rules, procedures and qualifying criteria.

Of further concern to gambling stakeholders, SoP has attached a series of hefty licensing fees attached to its provisional framework.

Prized at UAH 37 million per year (€1.3m), SoP will auction the rights to a operate a Kyiv casino as its most expensive license, whilst casino licenses in smaller cities carry a price tag of UAH 25 million (€800,000).

Retail bookmakers face an annual licence fee of UAH 750,000 (€25,000) per shop, with SoP adding further gaming machine fees of UAH 30,000 (€1,500) per unit.

Despite allowing for a provisional 80 bookmaker licenses, SoP informs that bookmaker portfolios will be capped to 800 premises across Ukraine with 32 licenses allowed in Kyiv, 16 in Odesa and Dnipro and a further 32 shared throughout the nation’s smaller cities.

Meanwhile, Ukraine 10 online operators will face a licence fee of UAH 25 million (€800,000) with SoP set to publish further conditions on online wagering taxes.

Ukraine’s Parliament has begun to review the SoP’s draft laws, however, the mandate appears to have divided party membership as ministers such as Oleksandr Dubinsky stated that they would propose alternatives “with better standards designed by experts working with MPs’’.

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