SBC News Voice of the Sports Betting Industry
Mykhailo Zborovsky, Beneficiary of the Ukrainian Gaming Platform Cosmobet, writes for SBC News about the state of play for the nation’s online gambling market and how it has evolved since legalisation in 2020 even during war.
The Ukrainian gambling industry has undergone substantial transformations, creating promising opportunities for further development. Since the legalisation of online gambling in 2020, the market has shown dynamic growth, attracting foreign investor interest and paving the way for implementing advanced technological solutions.
Ukraine’s high-level IT infrastructure and the professional expertise of its specialists provide competitive advantages, allowing the country to become a significant centre for the global gambling industry, with the potential to create world-class products and services.
Advantages of Ukraine as an Innovation Hub
Ukraine possesses several competitive advantages that set it apart from other markets. First, the country’s developed IT sector provides a solid technological foundation for creating gambling products. Each year, Ukraine sees a growing number of experienced IT professionals with deep expertise in innovative product design and development. Despite the challenges posed by war, the Ukrainian IT sector has shown impressive growth.
In 2021, for instance, Ukrainian IT service exports grew by 36%, reaching $6.8bn, while the number of specialists in this field increased from 244,000 to 285,000. While Ukraine’s GDP fell by 29.1% in 2022, the tech sector still exceeded expectations, generating $7.34bn in annual export revenue, marking a 5% year-over-year growth. This positive trend continued into 2023, with monthly IT export volumes growing by almost 10% in March.
Innovation and New Technologies
Ukrainian companies actively use modern technologies to enhance gambling solutions. Artificial intelligence (AI) and machine learning are widely applied to optimise user experiences, analyse user behaviour, and ensure personalised content. Companies developing software with AR and VR technologies also contribute to attracting foreign investment into Ukraine’s technology sector.
One standout example is Augmented Pixels, a Ukrainian company specialising in navigation and 3D mapping using augmented reality. It raised $2m to expand its team and fund research and development, securing around $7m in investments since 2015. Another Ukrainian company, Vizority, develops AR and VR solutions, working to create immersive experiences across various industries, including entertainment. Vizority supports the development of AR technology in Ukraine by implementing innovative solutions in the market.
Companies specialising in innovative gambling solutions in Ukraine actively adopt technologies that create an interactive and engaging gaming experience, ensuring a deeper level of player engagement.
Overall, Ukraine is experiencing a surge in initiatives focused on integrating blockchain technology into various sectors, including gambling. A few years ago, a bill was passed to permit the use of virtual assets. Although it has not yet taken effect and has some shortcomings, its future implementation could unlock new opportunities for gambling development, including decentralised autonomous casinos that ensure greater transparency and security for players.
These innovations contribute to the rising popularity of new platforms among Ukrainian users. For licensed operators, the adoption of blockchain technology could become an important aspect of complying with responsible gaming standards, offering users additional data protection guarantees. This, in turn, will help create a safer and more responsible gaming environment in Ukraine.
Figures of the Ukrainian Gambling Companies
According to recent data, the Ukrainian gambling market has shown steady growth, with an annual increase averaging around 15–20%. Investments in innovative developments within the gambling sector also demonstrate positive dynamics, as significant contributions from foreign companies and local investors support the advancement of new technologies.
An analytical report by 6Wresearch covers the projected development of gambling in Ukraine up to 2026, noting positive dynamics in both land-based and online segments, with a trend toward growing demand and revenue. The report also includes forecasts based on Ukraine’s economic indicators, supporting the sustained growth of this market within the aforementioned ranges.
Additionally, the Opendatabot platform recorded a significant revenue increase among the key market operators in 2023, with industry leaders reporting profits several times higher than the previous year, underscoring the industry’s growing appeal and development in Ukraine.
Employment in the IT sector for gambling is also on the rise. As the industry continues to grow, new job opportunities are created, and tax revenues increase. This trend benefits not only individual specialists but also contributes to overall economic resilience.
Challenges and Opportunities
Despite its rapid development, the Ukrainian gambling industry faces significant challenges that hinder its further progress. Unpredictable regulatory policies, a lack of strong action against the illegal market, and insufficient state support significantly slow down the growth of the rapidly expanding market. The absence of clear regulatory frameworks and guidelines complicates innovative initiatives and undermines investor confidence.
Improving the regulatory base and removing existing barriers could greatly enhance the conditions for market development. Despite these challenges, the Ukrainian tech sector remains attractive to foreign investors, reflecting its potential and growth opportunities.
Another challenge is the brain drain, as competition for IT specialists intensifies. However, talent retention and creating favourable development conditions within Ukrainian companies help retain specialists and foster their professional growth for the benefit of the local market.
Conclusion
Ukraine’s gambling market holds significant potential to transform into an innovation hub in this sector. Following the country’s victory, Ukraine could become a major international gambling hub. The combination of a developed IT sector, highly skilled specialists, the adoption of cutting-edge technologies, and a favourable economic environment provides a strong foundation for creating products that meet global quality standards.
Boosting innovation investments and collaborating with international partners can strengthen Ukraine’s position in the global gambling market and open new prospects for all industry participants. This will support Ukraine’s aspiration to become an influential player in the global gambling market, attracting investors and players worldwide.
