BetInvest: Putting the Ukraine ‘grey’ betting industry into a legal spotlight

BetInvest: Putting Ukraine’s ‘grey’ betting industry into a legal spotlight

Following a series of successful examples which demonstrated that a regulated betting industry could be embedded into a national economy, Ukraine opted to repeal its 11-year prohibition on gambling activity.

After months of pitfalls and legislative dramas, the decision to open its doors to a regulated betting and gaming market was brought about by President Volodymyr Zelensky. So what opportunities does this create?

By giving the green light for operators to offer betting services, BetInvest Chief Business Development Officer Alexandra Kalchuk believes that Ukraine has not only generated new opportunities for economic growth, but has also established a safe environment for its players. 

This new legislation, according to Kalchuk, will ultimately thrust the grey betting industry in Ukraine into a legal spotlight. 

Ukraine’s legal system had previously overlooked the potential for a legalised gambling industry in the past decade, which subsequently drove casinos to operate underground. The lack of regulations, transparency and penalties meant that players were at risk of fraudsters. 

Not only this, but it also created a perfect ground for corruption when casinos were “patronised” by police and politicians who had their benefit from turning a blind eye on illegal activity.

Signing this new legislation means that the Ukrainian government can make operators accountable for their actions, and ensure that the industry maintains high player protection standards. Will this mean that the grey market will be a thing of the past?

As it stands, the high-tech online monitoring system is still in the development stages, with expectations to be rolled out by 2022. To fully realise its potential for a legalised gambling sector, BetInvest believes that entry fees and reputation checks will play a central role.  

Under the legislation signed by President Zelensky, businesses’ taxes will be calculated based on the number of players, area of activity, and monthly income. But until the monitoring system is developed, fees are still applied with their sizes tripled as compensation for money that could be taxed from active businesses based on their turnover.

“A high entry fee is what will filter young, unreliable businesses from entering the field, where a lot of money is expected to concentrate,” explained Kalchuk.

“Then, owners of gambling businesses will have to pass a reputation check when their history of tax remissions and law abidance is reviewed in detail. Such thorough control is applied to keep dubious entities from entering the playing field. 

“Finally, the upcoming monitoring system is what will keep operating businesses transparent to supervisory authorities and Ukrainian citizens, who will now be able to check the trustworthiness of the registered gaming facilities.”

The monitoring system will have an overwhelming effect on gambling companies; it would force them to get rid of old equipment and outdated software on behalf of modern software solutions.

Reliable security protocols will become a ‘must-have’ for licensees, which for BetInvest is a bonus. Those looking to enter the Ukrainian market will be able to utilise their licensed software, which is built with the strictest security measures and uses advanced encryption, to guarantee safe data storage and transfer.

But despite the numerous control measures and high entry demands, the industry is expected to benefit from the exposed regulations. The industry will be monitored by the government, which guarantees safety to all sides – both business owners and gamblers. 

Moreover, the possibility to operate freely allows operators to attract players using public advertisement, which was previously forbidden. Security assurance, the opportunity to develop business with limited restrictions and a great flow of curious clients will help the gambling industry in Ukraine flourish.

With new regulations comes new challenges. What complexities should licensees expect? 

The legalisation of casinos, lotto, and betting offices by no means guarantees a smooth start. In fact, the new law will put certain limitations on all license applicants in terms of financial stability, transparency, law abidance, and security. 

“The entry check would make one of the most challenging stages of license obtainment,” stated Kalchuk. “The newly assembled Commission on Regulation of Gambling and Lotteries will demand a clear history of tax evasion or, for that matter, any law offense from all company shareholders. Their most recent financial operations, together with a complete list of possessions, will be reviewed thoroughly, and their financial activity will be monitored 24/7.”

But that only clears one of the stages. According to the Chief Business Development Officer, the biggest “thunderclap” for businesses will be a security check, during which the reliability of inner data storage systems would be tested: “It would strip all existing vulnerabilities of software used by a company, leading to an immediate license denial should any faults in the system be found.

“A wise decision would be to take care of the business’ software beforehand, thus sparing yourself time and effort of a subsequent license application. Here, BetInvest ready-made solutions might come in handy.

“Throughout the past 20 years, BetInvest has obtained knowledge and skill to develop sophisticated betting, casino, lottery software. To guarantee a top-notch gambling experience for players and a faultless user experience for businesses, we constantly upgrade our products, making them more and more convenient. We place a great amount of focus on the development of impenetrable systems that operate quickly while being extremely secure.”

Assuming that there are no further hiccups in revising the legislation’s security and transparency measures, it may only be a few months before gambling operators can open their doors to the Ukrainian public. 

It has been an arduous journey to ensure that the legislation meets the requirements of operators, suppliers, the government and regulatory agencies – but the potential for the gambling sector in Ukraine appears to be on an upwards trajectory.

Check Also

SBC News Bayes Esports: does the industry need to do more to protect esports integrity?

Bayes Esports: does the industry need to do more to protect esports integrity?

As esports continues to grow in popularity among bettors across the world, stakeholders need to …

Nikos Konstakis, CPO at OpenBet

Five pillars of OpenBet: Nikos Konstakis on a new look portfolio

Since the company was founded over 25 years ago, OpenBet has established itself as a …

SOFTSWISS COO Vitali Matsukevich

Vitali Matsukevich: paving the way for future growth at SOFTSWISS

This year has been exceptionally eventful for SOFTSWISS. With new product updates and promising partnerships …