1. Relevant Authorities and Legislation
1.1 Which entities regulate what type of gambling and social/skill gaming activity in your jurisdiction?
|Relevant Product||Who regulates it in digital form?||Who regulates it in land-based form?|
|Gaming||Casino gaming (including slots and casino table games such as roulette & blackjack)||Commission (as of 16 October 2020, the composition of which has not yet been appointed).|
|Poker||Commission (sports poker is not considered gambling).||Commission (poker tournaments may only be conducted in casinos; sports poker is not considered gambling).|
|Bingo||Is not mentioned in the Gambling Law, but can be covered by the definition of “lottery” under the Lotteries Law.|
|Sports/horse race betting (if regulated separately to other forms of betting)||Regulated as betting.|
|Fantasy betting (payment to back a ‘league’ or ‘portfolio’ selection over a period of time, for example in relation to sport or shares)||It is prohibited to bet on a “virtual game”, i.e. an aggregate of virtual events created with the aid of gaming equipment or mechanical and technical means, the outcome of which is not known in advance and the outcome of which cannot be influenced either by a player or by the operator.|
|Lotteries||Lotteries||Commission (is formally not considered gambling).|
|Social/Skill arrangements||“Social” gaming with no prize in money or money’s worth||Is not considered gambling.|
|Skill games and competitions with no element of chance||Are not considered gambling.|
1.2 Specify: (i) the law and regulation that applies to the Relevant Products in your jurisdiction; and (ii) – in broad terms – whether it permits or prohibits the offer of Relevant Products to persons located in your jurisdiction.
Law No. 768-IX of 14 July 2020 on the State regulation of activities regarding the organisation and conduct of gambling (“Gambling Law”) governs all the Relevant Products, except lotteries.
Lotteries are not considered gambling and are governed by Law No. 5204-VI of 6 September 2012 on the State lotteries in Ukraine (“Lotteries Law”) and, in respect of licensing, also by Law No. 222-VIII of 2 March 2015 on licensing of economic activities.
The only secondary regulation adopted to date is the Regulation of the Cabinet of Ministers of Ukraine No. 891 of 23 September 2020 on establishment of the Commission for the Regulation of Gambling and Lotteries (“Commission”) and approval of its constituting act.
Other key regulations will be approved by the Cabinet of Ministers of Ukraine, in particular the licensing conditions for each Relevant Product, the procedures for the application of financial sanctions to the operators, and the framework act of the State system of online monitoring. The rest of the regulations will be approved by the Commission, including on the certification of gaming equipment, principles of responsible gaming and the procedures for responding to reports on the infringements of gambling legislation.
Taxes and taxation rules in relation to gambling and lotteries are governed solely by the Tax Code of Ukraine.
Anti-money laundering requirements are established in Law No. 361-IX of 6 December 2019 on preventing and countering the legalisation (laundering) of the proceeds obtained by criminal means, terrorist financing and the financing of the proliferation of weapons of mass destruction (the “AML/CFT Law”).
Law No. 270/96-VR of 3 July 1996 on advertising contains restrictions on advertising of gambling and lotteries, and of the tradenames under which gambling services are provided.
2. Application for a Licence and Licence Restrictions
2.1 What regulatory licences, permits, authorisations or other official approvals (collectively, “Licences”) are required for the lawful offer of the Relevant Products to persons located in your jurisdiction?
The Gambling Law provides for 11 gambling licences, which can be united in the following groups:
(1) Seven “primary” licences for:
- Land-based casinos (ordinary licence and special “investment licence”).
- Land-based slot machine halls – each licence allows the operation of up to 250 slot machines.
- Land-based and online betting.
- Land-based hippodrome pool betting – the licence permits the operation of one betting shop and the carrying out of pool betting on races taking place in such hippodrome.
- Online casino gambling.
- Online poker.
(2) Three “secondary” licences for:
- A gaming table or a roulette gaming table.
- A slot machine.
- A betting shop.
These licences can be obtained by the respective land-based operator with a primary licence (i.e. a casino (licences for tables and slot machines), a slot machine hall (licences for slot machines), a betting operator or hippodrome (licences for betting shops)).
(3) One B2B gaming software supply licence.
In addition, the issuance of lottery licences is regulated by the Lotteries Law.
There are no limits on the number of available gambling licences, whereas only three lottery operators can simultaneously operate.
The Gambling and Lotteries Laws do not prohibit the cumulation of various licences by one company. However, it is unclear now whether numerous legislative restrictions and limitations on gambling and lottery activities can prevent such cumulation.
Lottery licences will only be issued following the results of the tender conducted by the Commission. All gambling licences can be issued by the Commission after consideration of an application of the respective licence seeker.
The Gambling Law does not grant any monopoly to any operator.
The Lotteries Law provides for “the State monopoly for organisation of lotteries”, and in fact every Ukrainian lottery is a “State lottery”. However, a qualifying requirement of three years’ experience in conducting State lotteries under the Lotteries Law means that only existing private Ukrainian lottery operators can qualify for the three available lottery licences.
When applying for a licence for a casino, slot machine hall or betting shop, the licence seeker must present a permission confirming that the premises to be used for gambling meet the requirements of the Gambling Law. Such permission is granted by the Commission upon an application of the premises’ owner.
All the gambling and lottery licences are only available to Ukrainian legal entities. However, such Ukrainian companies can be directly founded or effectively controlled by foreign (except Russian) companies or individuals. The Gambling Law imposes numerous restrictions preventing Russian companies and individuals from owning or taking control over a Ukrainian gambling operator.
2.2 Where Licences are available, please outline the structure of the relevant licensing regime.
The seeker of a gambling licence must be a Ukrainian company, inter alia:
- with authorised capital of UAH (Ukrainian Hryvnia) 30 million (equivalent to EUR 0.91 million) paid with funds from a confirmed source;
- that is not owned or controlled by a Russian company or citizen (who cannot be its shareholder, executive, ultimate beneficial owner) and does not own shares of any Russian company; and
- the shareholders of which are not companies registered in a jurisdiction from the FATF list.
Every land-based gaming establishment must be situated within the territory of the respective “special gaming zone”:
- Casinos. In Kyiv, a casino must be situated in a five-star hotel with a minimum of 150 rooms. In another settlement – in a four/five-star hotel with a minimum of 100 rooms. A casino may also be situated in a country recreation complex of at least 10,000 m2 with a five-star hotel. A casino of over 10,000 m2 may also be situated in a special territory, discretionary defined by the Cabinet of Ministers of Ukraine.
Also, casinos can be operated under a special “investment licence”, issued in case of an investment gambling project approved by the Cabinet of Ministers of Ukraine or in case of the construction of a five-star hotel with at least 200 rooms (in Kyiv) or 150 rooms (in another city).
- Slot machine halls. In Kyiv, a hall must be situated in a three/four/five-star hotel with a minimum of 50 rooms. In another settlement – in a three/four/five-star hotel with a minimum of 25 rooms. A hall may not be situated in a settlement with less than 10,000 inhabitants.
- Betting shops. In Kyiv, a shop must be situated in a three/four/five-star hotel with a minimum of 50 rooms. In another settlement – in a three/four/five-star hotel with a minimum of 25 rooms. A hall may be situated in a hippodrome.
Every land-based gaming establishment must also have the following minimum areas:
- A casino situated in a five-star hotel – at least 500 m2.
- A slot machine hall – at least 300 m2.
- A betting shop – at least 50 m2.
Every licence is personal and non-transferable: only an operator that received a gambling licence can conduct the respective Relevant Product. Nevertheless, a lottery operator may distribute lotteries through its distributors, which do not require any licence.
Managers and employees of the operator do not need to possess any licences.
Ukrainian companies are permitted to supply the Ukrainian or foreign operators with gambling software only after obtaining a special B2B licence. However, gambling and lottery operators are not prohibited from using software from any Ukrainian non-licensed or foreign supplier of gambling software.
A gambling operator must ensure certification and inspection of gaming equipment and its software by a certification entity, included into the list approved by the Commission.
Betting and lottery operators may conduct both land-based and online gambling under their licences. Moreover, betting operators may carry out only online gambling. An operator of online casino gambling or online poker is not required to collaborate with any land-based providers.
2.3 What is the process of applying for a Licence for a Relevant Product?
A Ukrainian company must file the Commission with an application for the respective licence (its form will be established by the licensing conditions) together with the documents, inter alia:
- constituent documents of the applicant;
- confirmation of the source of funds used for formation of the applicant’s authorised capital and an audit confirmation that the capital has been formed in full;
- certificates of clean criminal records for the applicant’s key personnel, substantial shareholders, and ultimate beneficial owners;
- confirmation of the gaming equipment certification; and
- a document confirming the right of the applicant or its shareholder to use the .ua domain name, as well as information about the hosting provider and the domain name registrar (in case of an application for the online gambling licence).
Also, in case of licences for a casino, slot machine hall or betting shop, the permission confirming that the premises to be used for gambling meet the requirements of the Gambling Law must be attached. Such permission is granted by the Commission upon an application of the premises’ owner.
Application for a lottery licence must be filed to the Commission together with documents confirming that the applicant meets requirements of the Lotteries Law and the licencing conditions; in particular, confirmation that the applicant has three years’ experience of conducting State lotteries under the Lotteries Law.
Licence fees are defined in the Gambling/Lotteries Law and depend on the amount of the minimum monthly wage (“MMW”) established on 1 January of the year the licence was issued. The fees are paid by equal parts each year (except fees for secondary licences, which are annual).
Until the launch of the State system of online monitoring, a temporary coefficient (triple multiplier) will be applied to the annual part of the licence fee in respect to some Relevant Products (betting and online casino gambling) and to the annual licence fee for each slot machine.
|Relevant Product||Licence fee
(for the licence duration, unless otherwise indicated)
|Temporary multiplier applied to the annual part of the licence fee or to the annual licence fee|
|In MMWs||In 2020, in EUR (rounded)
(1 MMW = UAH 4,723; 1 EUR = UAH 33.00)
|Expected in 2021, in EUR (rounded)
(1 MMW = UAH 6,000; 1 EUR = UAH 34.00)
|Casino||60,000 (in Kyiv)/30,000 (another place).||8.59 million/4.29 million.||10.59 million/5.29 million.||Not applicable.|
|Casino “investment licence”||Free.||–||–||Not applicable.|
|* Each roulette gaming table||175 (annual).||25,050 (annual).||30,900 (annual).||Not applicable.|
|* Each gaming table||90 (annual).||12,900 (annual).||15,900 (annual).||Not applicable.|
|* Each slot machine||6 (annual).||860 (annual).||1,060 (annual).||3.|
|Slot machine hall||7,500.||1.07 million.||1.32 million.||Not applicable.|
|* Each slot machine||6 (annual).||860 (annual).||1,060 (annual).||3.|
|Betting||30,000.||4.29 million.||5.29 million.||3.|
|* Each betting shop||30 (annual).||4,300 (annual).||5,300 (annual).||Not applicable.|
|Hippodrome pool betting||1.||143.||175.||Not applicable.|
|Online casino gambling||6,500.||0.93 million.||1.15 million.||3.|
|Online poker||5,000.||0.72 million.||0.88 million.||Not applicable.|
|Lottery||28,000.||4.01 million.||4.94 million.||Not applicable.|
|B2B gaming software supply||300.||42,900.||52,900.||Not applicable.|
The Commission reviews a licence application, takes a decision in 15 working days, and notifies the applicant on its decision in five working days. In case of a positive decision, the applicant pays a licence fee for the first year in 10 working days, and then the Commission issues a licence. The negative decision must be adopted on the specific ground set out in the Gambling Law, must be motivated, and may be appealed to a court.
The lottery licence will be issued following results of the tender conducted by the Commission. The tender procedure has not been established yet. It will probably be governed by the Cabinet of Ministers of Ukraine in the licensing conditions.
2.4 Are any restrictions placed upon licensees in your jurisdiction?
A gambling operator can conduct gambling only under one brand.
A gambling operator must keep a special banking deposit or banking guarantee ensuring payment of winnings in the amount of 7,200 MMWs (UAH 43.2 million; EUR 1.31 million).
A gambling operator must use its online system (platform) for conducting gambling, which:
- ensures real-time recording of all transactions and payments with respect to players and protection of the data from unauthorised interference;
- ensures its technical means are located as well as information in it is processed solely on the territory of Ukraine;
- is connected to the State system of online monitoring; and
- is certified and inspected by the certification entity, included into the list approved by the Commission.
Every piece of gaming equipment must be connected, directly or through the online system (platform), to the State system of online monitoring, administered by the Commission, and transfer data to it in real time.
A gambling operator must ensure certification and inspection of its gaming equipment and its software by a certification entity approved by the Commission.
A casino must hire at least 50 employees. A casino located in a city with over 500,000 inhabitants must use a minimum of 10 gaming tables (including two roulette gaming tables) and 50 slot machines. Any other casino must use a minimum of five gaming tables (including one roulette gaming table) and 20 slot machines.
A casino operated under the “investment licence” must hire at least 250 employees, use a minimum of 20 gaming tables (including four roulette gaming tables) and 250 slot machines, and an eatery.
A slot machine hall must use a minimum of 50 slot machines. Slot machines displayed in a hall must not be visible from outside of the building.
The premises of each land-based gaming establishment must be equipped with a security alarm and video surveillance systems.
Each lottery operator must use an electronic system (platform) for acceptance of stakes ensuring real-time recording for every stake, use a minimum of 5,000 lottery terminals and have, at the minimum, 5,000 distribution points.
2.5 Please give a summary of the following features of any Licences: (i) duration; (ii) vulnerability to review, suspension or revocation.
Generally, the duration of primary gambling licences (for casinos, slot machine halls, betting, hippodrome pool betting, online casino gambling and online poker) is five years. As an exception, only a special casino “investment licence” may be issued for 10 years. The B2B licence for gaming software supply is also issued for a five-year term.
Each secondary gambling licence (for a gaming table, a slot machine and a betting shop) is issued for the duration of the respective primary gambling licence held by a casino/slot machine hall/betting operator.
A lottery licence is issued for 10 years.
Renewal of the licences is not provided for in the Gambling/Lotteries Law.
While the Gambling Law prohibits reduction of the licence’s duration or suspension of the licence, a gambling licence can be annulled by the Commission, including on the following grounds:
- detection of inaccurate information in the documents submitted by a gambling operator for obtaining a licence;
- delay in payment of the licence fee over two months;
- a gambling operator’s failure to connect its online system or gaming equipment to the State system of online monitoring;
- non-admission of the Commission’s inspection;
- repeated infringement during the calendar year of the requirements of the Gambling Law, the AML/CFT Law and/or licensing conditions; or
- failure to pay a fine imposed by the Commission for a violation of the legislation.
Such annulment may be appealed to the court only.
Lottery licences may be suspended or annulled in accordance with the provisions of the Law on licensing of economic activities.
2.6 By Relevant Product, what are the key limits on providing services to customers? Please include in this answer any material promotion and advertising restrictions.
Considering that the majority of Ukrainians take a negative stance on gambling and, as such, do not have any gambling experience or have only experienced illegal gambling, it may be the case that a significant number of Ukrainians will decide to be included in the Register of persons with restricted access to gaming establishments and/or participation in gambling.
In some regions, the public and politicians will probably actively oppose the opening or functioning of land-based gaming establishments.
Since all land-based gaming establishments must be situated in hotels, serious doubts arise about whether there will be enough appropriate premises for gaming establishments, especially outside Kyiv.
Only a licensed operator is permitted to advertise gambling or order such advertising.
Advertising of gambling or a gambling trademark is prohibited:
- on any kind of television (including cable, satellite, IP, online, mobile) from 6 a.m. till 11 p.m.;
- in print media and publications, except in specialised gambling ones;
- on transport, in metropolitan areas, outdoors, and on goods intended for persons under 21 years of age; and
- in places where entertainment, sporting and other events are conducted for persons under 21 years of age.
Use of a gambling trademark is prohibited during the sponsoring of TV or radio broadcasting and events intended for persons under 21 years of age (except broadcasting of sporting events).
The Law on adverting also establishes a number of restrictions and limitations on the content of gambling adverting.
A player is entitled to limit his/her participation in online gambling by establishing personal restrictions on the money limit he/she wishes to spend on gambling. This is the only provision in the Gambling Law on game limits, and it will take some time to see how it will be implemented in practice.
The Gambling Law requires operators to refuse to grant to players any bonuses, presents or any other promotions, if such granting depends on them losing in the respective gambling.
The Gambling Law prohibits betting on a “virtual game”, i.e. an aggregate of virtual events created with the aid of gaming equipment or mechanical and technical means, the outcome of which is not known in advance and the outcome of which cannot be influenced either by a player or by the operator.
Since bingo is almost unknown to Ukrainians, failure to mention it as a kind of gambling or lottery can effectively block its development in Ukraine.
In respect of poker, it is difficult to predict to which extent sports poker (which is not considered gambling) will be used for avoidance of licensing under the Gambling Law.
2.7 What are the tax and other compulsory levies?
The taxation of gambling and lotteries is governed solely by the Tax Code of Ukraine.
The gambling operator must pay 18% GGR tax (or 10% turnover tax on revenues received with the use of slot machines) and general 18% corporate income tax.
The lottery operator must pay 30% GGR tax and general 18% corporate income tax.
Payment of stakes and winnings in both gambling and lotteries is not subject to VAT.
Winnings are subject to 18% personal income tax and 1.5% military tax, which must be withheld by the gambling or lottery operator acting as “tax agent”.
2.8 What are the broad social responsibility requirements?
Responsible gaming is a founding principle of the organisation and conduct of gambling in Ukraine. In addition to the requirements of the Gambling Law, the “principles of responsible gaming”, legally binding for the operators, will be established by the Commission.
The social responsibility obligations of the operators include:
- obligatory identification and verification of the identity and age of players and visitors;
- prohibition of involvement in gambling of underage persons, persons with marked gambling addiction, and persons with restricted access to gambling;
- periodical trainings for the operator’s personnel on responsible gaming and prevention of gambling addiction; and
- obligatory placement in the gaming establishment, website or mobile application of information on the operator, gambling rules, responsible gaming and gambling addiction, and medical institutions for the treatment of gambling addiction.
A player must reach 18 years of age to participate in a lottery and 21 years of age to gamble in any other Relevant Product. The latter limitation also applies to visitors and employees of the land-based gaming establishments.
A person’s access to gambling will be restricted after his/her inclusion in the non-public Register of persons with restricted access to gaming establishments and/or participation in gambling, administered by the Commission.
A person is included in the Register:
- by the operator or the Commission, not later than the next day after the player filed, personally or online, his/her irrevocable application (restriction for up to 36 months, as defined in the application, but at least six months);
- by the Commission on its discretion, following the application filed by the person’s close family members (restriction for up to six months); or
- upon a court judgment, following the application filed by the person’s close family members (restriction for six to 36 months, as defined by the court).
2.9 How do any AML, financial services regulations or payment restrictions restrict or impact on entities supplying gambling? Does your jurisdiction permit virtual currencies to be used for gambling and are they separately regulated?
Stakes may be made in money (only in UAH) or with the use of the UAH’s gaming substitutes (e.g. a coin-like badge, chip, token, electronic card).
In land-based gaming establishments, all the monetary transactions and payments with the participation of players, including exchange of the UAH’s gaming substitutes, must be conducted through the cashier desk with the use of the registrars of payment transactions. Also, any banking or credit institution, pawnshop, ATM or currency exchange may not be placed in a land-based gaming establishment.
Stakes in land-based casinos may be made only by the UAH’s gaming substitutes (gambling tokens, etc.), equipped with a special tool (chip) enabling the determination of its face value and location of the respective casino.
It is prohibited to gamble on credit or subsequent payment. The operators cannot grant loans to players. Use of debit or credit cards is allowed only with the payment authorisation.
Winnings may be in monetary or material form and must be paid within 30 days after the player’s request (or, in case of betting, 10 working days from the determination of the winner).
Winnings can be paid in cash only at the cashier desk and within the limit of UAH 50,000 (equivalent to EUR 1,500), while the rest must be paid in cashless form. At the request of a player, all of the winnings must be paid in cashless form. In online gambling, all payments from/to players must be cashless.
It is prohibited to offer players, both free and as a prize, any alcoholic beverages and tobacco products.
The Lotteries Law prohibits payment of a lottery ticket or a stake on credit or subsequent payment. Use of debit or credit cards is allowed only with the payment authorisation. Winnings can be paid in cash at the cashier desk of the lottery operator or through the lottery’s distributor. At the request of a player, winnings must be paid in cashless form. Other conditions of payments can be established by the lottery rules.
Under the Gambling Law, the banks and payment systems, operating in Ukraine, must refuse to make payments to non-licenced operators.
The latest version of the Ukrainian AML/CFT Law was adopted with the aim to transpose EU AML Directive No. 2015/849 and EU Regulation No. 2015/847 on information on the payer accompanying transfers of funds according to Ukraine’s obligations under the EU-Ukraine Association Agreement.
Under the AML/CFT Law, the gambling/lottery operators are the subjects of primary financial monitoring and must conduct customer due diligence (“CDD”) in case of suspicious transactions or transactions over UAH 55,000 (equivalent to EUR 1,660), which involve cash payment, PEPs, and transfers to/from a jurisdiction from the FATF list. Compliance with the AML/CFT Law requirements is a ground for the operator to refuse or delay payment of a winning or the return of a stake.
The State Service of the Financial Monitoring of Ukraine exercises oversight over the gambling and lottery operators in respect of AML/CFT measures.
3. Online/Mobile/Digital/Electronic Media
3.1 How does local law/regulation affect the provision of the Relevant Products in online/mobile/digital/electronic form, both from: (i) operators located inside your jurisdiction; and (ii) operators located outside your jurisdiction?
Provision of each Relevant Product online (which covers use of a mobile application) requires an operator to obtain the relevant licence (online casino gambling, betting, online poker, lotteries).
Solely the operators licensed under the Gambling/Lotteries Law are permitted to provide the respective Relevant Product on the territory of Ukraine, including online/through a mobile application; any other conduct of gambling may be prosecuted as a criminal activity. The only exception is conduct of “inter-State lotteries”, which may be jointly organised by a Ukrainian lottery operator and a lottery operator licenced in another jurisdiction.
The Gambling Law prohibits any distribution in Ukraine of the websites, mobile applications or other gaming equipment for participation in gambling which provide access to servers or databases of persons who are not licenced operators under the Law.
The banks and payment systems, operating in Ukraine, must refuse to make payments to non-licenced operators.
Upon request of the Commission, a non-licenced operator or a hosting provider must restrict access from/to the territory of Ukraine to the website of non-licenced operators.
The licensed online gambling operators are directly permitted to accept stakes from individuals located outside Ukraine, irrespective of their nationality.
The Lotteries Law contains only one provision on online lotteries – that the rules on distribution and conduct of lotteries through the Internet shall be governed by the licensing conditions.
3.2 What other restrictions have an impact on Relevant Products supplied via online/mobile/digital/electronic means?
The Relevant Product must be provided to customers through the operator’s website with a domain name in the .ua zone, which has been notified to the Commission and included in the public Register of the licensed operators. The website may be operated solely under one brand used by the operator. The website must contain certain mandatory information in the Ukrainian language (other language version(s) may be added at the operator’s discretion).
The gambling operator must use its online system (platform) for the conduct of gambling. Only a player him/herself may create a gaming account on such platform.
All payments from/to players must be cashless.
The online operators, except betting operators, are directly prohibited from providing gambling disguised as telecommunication services or the lease of any devices/equipment providing access to the Internet (Internet café, Internet club, etc.).
3.3 What terminal/machine-based gaming is permitted and where?
Roulette gaming tables can be placed and used for gambling only in casinos.
Slot machines can be placed and used for gambling in casinos and slot machine halls. Slot machines must be the operator’s property.
Each slot machine must be equipped with random number generators (“RNGs”) ensuring impossibility of predicting the outcome of a future game, based on the results of previous games. RNGs must work constantly, even when the slot machine is not used for playing.
Only slot machines without bill acceptors can be used. Debit or credit cards also cannot be used, since all the monetary transactions and payments with respect to players, including with the use of banking cards, must be conducted through the cashier desk.
RNGs and the random selection process must be protected from external influence; in particular, from electromagnetic or electrostatic interference and radio frequency interference.
All the gaming equipment, except gaming tables, must be connected to the State system of online monitoring directly or through the operator’s online system (platform) for the conduct of gambling.
Certain mandatory information must be indicated on the body of each slot machine, including:
- its manufacturer and year of production (slot machines produced before 2019, as well as produced or supplied by a Russian resident, are prohibited for use in Ukraine);
- its production number (that allows everyone to retrieve, on the Commission’s website, data about the slot machine’s location and the licence of its operator);
- data on modification and repair (if any); and
- total percentage of winnings (theoretical return to the player), which must be at least 90%.
In betting shops, it is prohibited to place equipment:
- enabling a player to make a stake, check an outcome, or receive winnings without participation of the operator’s employee; or
- enabling access to, displaying or generating virtual events or games, including by means of a RNG, and to make stakes on such events or games.
The Lotteries Law permits the distribution of lotteries through the terminals, and each lottery operator must operate at least 5,000 terminals. Lottery terminals must be connected to the operator’s central electronic system (platform) and transmit data in real time. To prevent the terminals from being used as slot machines, the terminals must neither perform a lottery draw, nor display or translate a draw process.
4. Enforcement and Liability
4.1 Who is liable under local law/regulation?
The Criminal Code of Ukraine punishes, with a fine of UAH 170,000–850,000 (equivalent to EUR 5,152–25,758), the following crimes:
- organisation and conduct of gambling or lotteries without the respective licence; or
- organisation and functioning of establishments for providing access to online gambling or lotteries.
The licensed operator will be fined for:
- each conduct of betting in the non-licensed betting shop – financial sanction of 160 MMWs (UAH 960,000; equivalent to EUR 29,091);
- each conduct of gambling with the non-licensed roulette gaming table – financial sanction of 700 MMWs (UAH 4.2 million; equivalent to EUR 127,273);
- each conduct of gambling with the non-licensed gaming table – financial sanction of 350 MMWs (UAH 2.1 million; equivalent to EUR 63,636); and
- each conduct of gambling with the non-licensed slot machine – financial sanction of 24 MMWs (UAH 144,000; equivalent to EUR 4,364).
Also, licensed operators will be punished with a financial sanction of 1,000 MMWs (UAH 6 million; equivalent to EUR 181,818) in case of unauthorised modification of gaming equipment, failure to connect gaming equipment to the State system of online monitoring, or failure to carry out mandatory certification or inspection of gaming equipment.
The conduct of gambling with underage or other persons prohibited from gambling will be prosecuted as follows:
- admission to a gaming establishment or to gambling of an underage, a self-restricted, or another person prohibited from gambling – financial sanction on the operator of 500 MMWs (UAH 3 million; equivalent to EUR 90,909);
- implication of persons under 18 years of age into gambling – imprisonment for three to seven years; and
- acceptance of lottery stakes from persons under 18 years of age – personal administrative fine of UAH 1,700–9,350; equivalent to EUR 15–283.
Producers and distributors of illegal advertisements of gambling are liable for a financial sanction of 300 MMWs (UAH 1.8 million; equivalent to EUR 54,545).
Financial sanctions are applied by the Commission, while criminal and administrative prosecutions are conducted by law enforcement authorities.
A player may be prosecuted only for the participation in non-licensed gambling, which can result in an administrative fine of UAH 25–425 (equivalent to EUR 0.8–12.9) and forfeiture of a stake.
4.2 What form does enforcement action take in your jurisdiction?
The previous enforcement practices were relevant to the period before the gambling legalisation by the Gambling Law, which entered into force on 14 August 2020.
Traditionally, the Ukrainian authorities tend to enforce laws through criminal prosecutions and administrative measures, often combined with accusations in tax evasion.
During the drafting process, it was emphasised that annulment of a gambling licence should be a key enforcement instrument.
Under the Gambling Law, the Commission should play an important role in enforcement procedures. It will probably take significant time for the Commission and its staff to grow their capacity to take effective enforcement measures, as they are set forth in the Gambling Law, against non-licenced operators, especially those located outside Ukraine.
4.3 Do other non-national laws impact upon liability and enforcement?
International agreements of Ukraine in force are an integral part of the Ukrainian national legislation and have priority over national laws.
Since 1 September 2019, Ukraine has participated in the Council of Europe Convention on the Manipulation of Sports Competitions (Macolin Convention). The Convention is partly implemented by Law No. 743-VIII of 3 November 2015 on prevention of influence of corruption offences on the results of official sports competitions.
4.4 Are gambling debts enforceable in your jurisdiction?
A gambling contract between a player and a licenced operator becomes valid and enforceable at the moment the stake is paid.
Any gambling contract concluded by a person prohibited from gambling by the Gambling Law is void.
Since the Gambling and Lotteries Laws prohibit gambling or payment of a lottery ticket or a stake on credit or subsequent payment, gambling debts cannot arise for the player.
4.5 What appetite for and track record of enforcement does your local regulatory authority have? Have fines, licence revocations or other sanctions been enforced in your jurisdiction?
The Commission and other authorities have not yet started their enforcement activities.
5. Anticipated Reforms
5.1 What (if any) intended changes to the gambling law/regulations are being discussed currently?
The Gambling Law requires the Cabinet of Ministers of Ukraine to:
- ensure the establishment and financing of the Commission (until 14 October 2020);
- adopt the secondary legislation provided by the Law (until 14 November 2020); and
- ensure the functioning of the State system of online monitoring.
The Ukrainian authorities have declared that legalisation of gambling will be followed by reduction of tax pressure on gambling. The respective Bill No. 2713 on amendments to the Tax Code of Ukraine is included the Parliament’s agenda for its adoption in the first reading.
The Bill provides for the following changes in taxation:
- gambling and lottery operators will pay 10% GGR tax and general 18% corporate income tax; and
- winnings will be exempted from the personal income tax and the military tax.
Please note that the answers to all of the above questions are up to date as of 16 October 2020.