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Legalization of gambling in Ukraine. Expert opinion of CASEXE

Ivan Kondilenko, CASEXE brand manager, talked to News Of Gambling about the possible legalization of gambling business in Ukraine.

When gambling is going to be legalized in Ukraine?

There’s no clear answer to that question. We, business representatives, hope that the draft bill on gambling legalization will be accepted by the end of 2015, as many representatives of the authorities have promised. Additional argument to that point would be the fact that the Ministry of Finance has added profits from gambling licensing into the budget for 2016, amounting to UAH 1.69bn. So the possibility of formal legalization of gambling in Ukraine in the nearest time is quite possible. Which edition and which corrections would be used as a final version is another issue.

Which types of gambling will come out of shadow?

It’s worth mentioning that today, according to the law “On state lotteries”, Ukraine officially permits such kind of gambling as lotteries, and the state has an absolute monopoly in the segment. All other types of gambling are prohibited. Basing on the position of the Cabinet of Ministers, legalization of gambling will predominantly allow the development of land based casinos. Such type of gambling as betting will be affected as well. Unfortunately, currently proposed draft bills have nothing included on such powerful market segment as online gambling, which is quite disturbing to us as a company developing software for the online gambling industry. Leaving online gambling aside, the state abandons a colossal income to the budget, as the amount of the global online gaming market has reached $42.2bn in 2015, whereas the progress dynamics will remain steady and positive for the coming years.

How will this impact your company operations?

Practically, adoption of the gambling bill in Ukraine in any edition will positively influence our operations, as we’ve always supported and will continue to promote gambling business among all market participants ­– authorities, business, population. Legalization of gambling is a proper step in this direction, as our main goal today is to inform people about the industry, and destroy this some kind of negative stereotype, establishing powerful and necessary segment of economics in the country. And of course, we’re hoping to get more structured approach from the government aimed at the gambling regulation as a whole and online gambling in particular. Our company is always open to dialog.

Will the Ukrainian market be interesting to foreign investors or is it going to be conquered by the local businessmen only?

Again, many factors depend on the text included into the bill. If it will be focused on the development of land based casinos exclusively, in 4- and 5-star hotels, which has been discussed by authorities before, the market will generally attract foreign investors. If the law will be optimized and balanced for the types of gambling and business operations (e.g. the rule of limiting casinos in hotels), local businessmen will also have the perfect possibility to operate, create jobs for people, pay taxes and benefit the country. As for me, I think that each country shall have incentives for local business, as a main driver of economics.

How do you assess the total gambling market volume in Ukraine?

Today, we can correctly estimate only the type of gambling, which is officially allowed in Ukraine – lotteries. The volume of lottery market in the country is about UAH 5bn. When it comes to the other types of gambling, it’s hard to tell, as they are illegal and stay in the shadow. Markets exist because the need for gambling will always exist, and we hope that state authorities understand this as soon as possible and do everything to make all types of gambling come out of shadow, including online. And the business segment, in its turn, will provide its total support and assistance.

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