KRAIL stands by its authority of Ukraine gambling 

KRAIL – The Commission for the Regulation of Gambling and Lotteries in Ukraine has hit back against direct attacks made against its organisation by The Ministry of Digital Transformation. 

This week, the Ministry presented ‘Draft Bill-9256’ to the Verkhovna Rada (parliament), seeking authorisation to ‘liquidate KRAIL’ of its duties as the authority overseeing Ukrainian gambling.

Mykhailo Fedorov, who leads the Ministry, questioned KRAIL’s competence as a regulatory body, which has been marred by scandals related to its licensing of gambling operators and charges of corruption against its advisors.    

The escalating conflict against Russia’s invasion of Ukraine has seen the government increase the authority and influence of the Ministry of Digital Transformation, overseeing business departments and intelligence.

Last year, the Cabinet of Ministers handed control of the management of KRAIL to the Ministry of Digital Transformation amidst concerns about “efficiency and the transparency of operators.”

The Draft Bill aims to dissolve KRAIL and replace it with a digital system overseen by a single commissioner, deemed a necessary measure as the current licensing procedure requires a quorum of at least five out of seven commission members, often slowing down the process.

The proposed changes would transform KRAIL from a collegiate body into a central executive body, with the head of the new body making decisions on licensing rather than a commission of multiple elected members.

Ivan Rudy, Director General of KRAIL, rejected the Bill that seeks to dissolve his department. This week, he shared five key points against KRAIL liquidation, urging the Parliament to properly evaluate its implications and consider alternative solutions.

Rudy highlighted the potential risks of dissolving the KRAIL and creating a new regulatory body within just one month, as proposed by the Bill. He emphasized the importance of continuity of power exercised by the state authority, and expressed his doubts about the feasibility of the one-month timeline, stating: “My experience suggests that this month may well turn into two or more.”

KRAIL leader highlighted that the existing legislation adopted by the Commission is functioning without any major problems and questioned the need for the Cabinet of Ministers to rework the entire pool of legislation, saying: “What is the practical point for the Government of the country at war, to develop and approve a whole new array of very specific regulations that already exist and are working instead of solving serious problems that should put an end to the war?”

Furthermore, Rudy criticized the Bill’s proposal to replace the KRAIL with an authority without special status, consisting of only one member, arguing that this “poses a higher risk of corruption.” 

The Director General expressed concerns over the Bill’s removal of transparent and open competition for vacant positions, stating that “this is unacceptable and nullifies the main idea of the Presidential reform, which at one time, was guided by the principles of government transparency and fighting against corruption.”

The Bill’s provision for electronic submission of self-limitation applications through the Unified State Web Portal was also questioned by Rudy, who noted that this is already possible and does not require the liquidation of KRAIL or the creation of another body.

Lastly, Rudy raised concerns about the Bill’s change in wording regarding the administration of the State Online Monitoring System (SOMS), which he believes could allow the future regulator to avoid responsibility for any failures in the SOMS operation.

Concluding his statement, Rudy expressed his belief that the main goal is the unnecessary liquidation of the Commission without addressing existing problems in the gambling market, such as gambling taxation and SOMS implementation. He stated:”It’s true that there are challenges for the market itself…but will the liquidation of the current regulatory body solve all of these problems?”

Rudy urged the Parliament to consider alternative solutions for improving the regulatory framework and warned that the Bill has the potential to slow down an industry already suffering from unresolved issues.