Ukraine’s new online gambling jurisdiction could be expensive

Ukraine’s first moves towards lifting a six-year ban on gambling, including internet activity (see previous report) do not offer much cause for optimism; the first draft of the enabling legislation published this week suggests that licensing and operational costs will be high, although it should be noted that these are early proposals and adjustments may follow debate and consultation.

The draft released by the Ministry of Finance calls for the establishment of a national gambling regulator, which it will control, and a requirement that online operators base their activities in the country.

Operators will additionally have to show that they have secured capital of a minimum Euro 2 million over and above any borrowed funds.

Online gambling operators face a tax of 20 percent of GGR and a hefty annual licensing fee of Euro 1.5 million…substantially more than that proposed for the highest bracket of land casino operators (based on the population of the city in which they are situated), who will be charged Euro 1 million a year.

Online bookie firms will be required to pay a Euro 300,000 annual licensing fee, and if they have land operations they will also have to cough up a Euro 1.5 million annual licensing fee, and up to Euro 3,000 per venue in respect of land retail shops (again depending on the size of the city in which these are located.)

The legislation makes provision for one national lottery, but again the requirements are stiff and require local registration. Companies interested in running the lottery will have to satisfy the regulator that they have five years of international experience and have historically generated over Euro 3 billion in turnover in those operations.

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