Cosmolot licence raises questions over Ukraine Gambling Law

Ukraine gambling stakeholders have been left dumbfounded by the country’s newly established Commission for Regulation of Gambling and Lotteries (CRGL) after it issued its first licence this week. 

On Wednesday, CRGL announced that it had awarded its first online gambling licence to Speisiks LLC, the company which operates the Cosmolot brand, which formerly operated in Ukraine under the UNL’s instant lottery licence but discontinued from July 2019.

CRGL’s approval of Speisiks LLC’s online casino licence should have marked the launch of Ukraine’s new regulated gambling marketplace some six months after President Volodymyr Zelensky ratified the Ukrainian Gambling Law.

Yet, CRGL’s decision has come under scrutiny after it approved Speisiks’ licence, despite interested parties still awaiting a decision from the government to settle on vital requirements related to the technical certification of the Gambling Law.

Prior to its announcement, CRGL rejected and left ‘without consideration’ around 15 licence applications, without any clarity on the system and technical requirements.

Whilst the terms of the Gambling Law were approved last summer, thus allowing businesses to apply for licensing, Ukraine’s government is yet to adopt ‘technical accreditation’ requirements with regards to technologies, operating systems, software and compliance controls.

The situation has left Ukraine observers perplexed with regards to how CRGL approved Speisiks’ licence without knowledge of any final market requirements. The CRGL approval, therefore, could trigger legal challenges should Speisiks launch the Cosmolot brand without fulfilling its technical duties.

Scepticism surrounds CRGL as a government agency, formed just three months ago to handle licences, fails to meet its first regulatory hurdle. Further to technical requirements, Ukraine’s interested parties are yet to receive word on whether the government has finally settled on the market’s gambling tax framework, although it seems that the necessary legislation has stalled ‘midway to the Rada’s floor’. 

“Developments continue to gather pace in Ukraine, however, applicant parties still await vital information on technical certification to address legislation requirements,” said Ilya Machavariani, CEO and Senior Partner of CIS gambling consulting firm 4H Agency.

“The next months will be critical in how a regulated market shapes up. Out of the blue, CRGL offered its first licence this month, but greater transparency certainly could help the market.”

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