Ukraine’s latest update on a debated gambling law proposes lower licensing fees. Advertising of gambling products is allowed following new guidelines while taxation of the industry is still being discussed.
Bill 2285-D Gets a Quick Update
Ukraine’s gambling bill has received its latest amendment. The country has got one step closer towards the legalization of gambling. The new version of the bill allows gambling advertising but also decreases license fees. Originally introduced in 2019, Bill 2285-D, was pushed forward by Oleg Marusyak. Although no date is set for the bill’s second reading, its current version is ready. To make it this far, there have been some 3,498 requested amendments of the bill by representatives of the Finance Committee, Tax and Customs. Out of all requested amendments some 1,818 were implemented in some way into the bill.
The updated version of Bill 2285-D outlines restrictions towards business ownership and origin on the gambling market. The newly-implemented restrictions ban people who originate from countries, which are occupying or aggressors towards Ukraine from holding gambling licenses under the new bill. Undoubtedly, this part of the bill is aimed at rejecting businesses owned by Russia or Russian businessmen. The restriction also applies to ultimate beneficial ownership (UBOs) as well as Russian chairmen or other managerial staff.
The current restrictions introduced with this version seem to only apply for land-based operations. This is because the bill does not specify if sports betting operators also have to follow this rule.
The Bill Features Major Changes in Licensing Fees
Looking at the bill’s text from its first reading in January, the current updated version includes considerable changes in terms of licensing fees. A reduction in the fees for licensing of online gambling activities has been outlined, suggesting a change from UAH59.0 million (€2.0m/$2.2m) down to UAH30.7 million. The previously offered annual fee is removed and now a five-year license renewal fee is proposed. In addition, the fees for bookmakers are also reduced from UAH566.8 million to UAH70.8 million.
The gaming table’s fees were also reduced whereas the fee per roulette table dropped down from UAH826,000 to UAH425,000. The fees for land-based slots were cut down to UAH28,338 per year, while the slot machine hall’s license fees skyrocketed from UAH3.5 million to UAH35.4 million. An update was also introduced towards poker licensing, where the proposed fees have increased and are now double – UAH23.6 million.
The updated version of the bill also features changes in the fees in terms of casinos located within hotels. Any such casinos located in Kyiv, Ukraine’s capital, would pay a flat fee of UAH121.6 million. The hotel-based casinos located in other parts of the country will pay a fee of UAH70.8 million.
Taxation Is Yet to Be Decided as Well as Other Details
The previous text of the bill featured a reduced total number of slots for the country of 40,000 as well as a minimum distance of casinos from schools of 500 meters. However, in the updated version of the bill, those texts were excluded. This part of the amendment led to criticism by MPs Yaroslav Zhelezniak and Halyna Vasylchenko. In addition, the new bill removes the ban on gambling advertising online as well as marketing by third-parties and affiliate-marketing. The bill outlines that the gambling advertising on TV and radio can be offered only between 11 pm and 6 am.
Another important part of the bill is the taxation of gambling. At the moment, there are four gambling tax bill which were offered. Bill 2713, submitted by both Marusyak and Marian Zablotskyi proposes all lotteries and gambling activities to pay a 25% tax. Another version, Bill 2713-1, pushed by Dmytro Natalukha features 12.5% online gambling tax, 22% tax for lotteries and a 7.5% gross gaming revenue (GGR) tax for bookmakers.
Proposed by Oleksandr Dubinsky, Bill 2713-2 sets a GGR tax of 25% for any form of gambling, regardless if online or, land-based or lottery. There is also another bill proposed by Artem Dubnov. His 2713-3 bill suggests that the government does not tax the gambling at all. Rather than that, the country will be receiving funds from the licensing fees. With that being said, Dubnov’s bill is less likely to go forward, considering the reduced licensing fees which were proposed.