SBC News Voice of the Sports Betting Industry
The Ukraine Gambling Council (UGC) has stood by national gambling and lotteries regulator KRAIL, whose authority has been attacked by MPs and the media.
Last week, Mikhail Fedorov, Ukraine’s Minister of Digital Transformation, submitted a request to the Verkhovna Rada calling on MPs to support “the liquidation of KRAIL”, stating that the agency had failed in its duties to protect the country under conflict from Russia.
Fedorov submitted his request as a Cabinet Minister of the Zelensky government, whose duties include overseeing the regulatory development of gambling and lotteries.
The position of KRAIL came under scrutiny this summer as it was ordered by the government to disband its ‘expert policy council’ led by Boris Baum.
An investigation by Ukraine media group OSINT alleged that Baum held ‘favourable interests’ for Tvoya Betting Company – allowing the company to secure KRAIL licences.
Tvoya Betting is accused of being a Kremlin-backed business used for the purposes of ‘large-scale money laundering’ via online gambling websites.
KRAIL disbanded the council, which saw Baum reportedly flee to Cyprus, declaring his innocence against the accusations of corruption.
The affair saw the Verkhovna Rada told that KRAIL had failed in its most important duty to protect Ukraine from Russian corruption and interference.
As such, Fedorov has recommended that KRAIL be dissolved and its regulatory duties be transferred to the Ministry of Digital Transformation.
“Is KRAIL needed at all?” Fedorov remarked to Ministers. “Everything can be done online. We are auditing all processes and will soon offer a strategy on how to replace the commission as a digital service.”
The UGC issued a response by Chairman Anton Kuchukhidze, who stated that the trade body would support no plans to disband the regulator.
Kuchukhidze warned that Fedorov’s plans represented “fundamental changes or transformations of the business model” of Ukraine’s approved gambling regime for the next three to five years.
The trade body stated that Ukraine could not afford “bureaucratic games played behind-the-scenes to determine the licensing for the industry.”
“You need to understand that shifting the issuance of licenses online will not solve numerous problems faced by the State, namely preventing gambling addiction, fighting against illegal operators,” Kuchukhidze’s statement read.
“Moreover, I believe that the idea of fully computerizing the issuance of licenses will be directed at and will open the doors for the companies established by the Russian aggressor, which will be able to enter the Ukrainian market and steal our citizens’ personal data and money.”
Kuchukhidze maintains that the government’s agency focuses on finalising the technical arrangement of the Ukraine Gambling Law (2713-d), which had not been delivered during the market’s launch prior to the Russian conflict.
Of utmost concern, the UGC underlined that the government has yet to sanction its State Online Monitoring System (DSOM) that would support KRAIL supervision of gambling.
In light of the Russian conflict, the UGC has formally published its blueprints on how the DSOM project should be undertaken to protect Ukraine consumers and in the interest of a fair marketplace.
“Any topic initiation on changing the market under new conditions and postponing urgent tax issues will only complicate the life of legal business, while illegal business will grow,” Kuchukhidze concluded.
“In turn, I would like to emphasise again that the UGC is ready for extensive dialogue on the necessary public decisions to develop the gambling industry.
“We are always open to all state bodies and willing to provide our analytics and contribute to the development of our industry. I am personally convinced that only by joint efforts we can get an effective result that will benefit the state.”
