The Committee on Finance, Tax and Customs Policy approved on June 3rd the 2285-D bill to legalise and regulate both online and land-based gambling in Ukraine and is now ready for a second view.
“The Committee almost unanimously supported the formation of a new gambling market and now asks for the support of the Verkhovna Rada.” Servant of the People deputy and Committee on Finance, Tax and Customs Policy member Andriy Motovilovets said. “We are fully ready for the second reading.”
The bill was introduced by Oleg Marusyak as one of six alternatives to the reforms submitted by the Servant of the People Party-led government in Parliament in October 2019. It passed the first reading in January 2020, after being rejected in an initial vote in December.
The committee has made changes to the bill since its first reading which have not yet been published.
The deputies from opposition political party Voice, Halyna Vasylchenko and Yaroslav Zhelezniak declared that they left the committee hearing early in protest against some of the changes made from the first bill. These include removing the limit on the number of gaming machines in the country, previously set at 40,000, and the provision blocking machines being placed within 500m of a school.
In addition, Vasylchenko and Zhelezniak said they wished to see slot machines limited only to five-star hotels rather than also allowed at three and four-star venues.
The Marusyak’s version of the bill includes a lower licence fee for online gambling than any of the alternatives, at UAH6.7m (£200,700/€222,800/$251,000). It also included a minimum licence fee of UAH41.7m for casinos in hotels with 200-250 rooms and a fee of UAH62.6m for casinos in hotels with 250 or more rooms. These licence fees will track the country’s minimum wage to adjust for inflation.
The bill would determine bookmaking licences through a system where each licensee would have the rights to open 5 betting shops. Licences would be awarded by region, with 32 licences to be made available in Kyiv; 16 between Ukraine’s other large cities of Odes and Kharkov; and a further 32 in the rest of the country.
If the bill is passed, the Rada must also pass another act to set out how the industry will be taxed. At the moment there are four different gambling tax bills for the Rada to consider.
The bill 2713 submitted by Marusyak and Marian Zablotskyi, that sets the tax rate for all gambling and lotteries at 25%. As an alternative, the bill 2713-1, submitted by Dmytro Natalukha – proposes a 7.5% GGR tax rate from bookmaking, 12.5% from online gambling and 22% from lotteries.
A third, bill 2713-2, prepared by Oleksandr Dubinsky, looks to establish a flat tax rate of 25% of GGR for all forms of gambling: online, land-based and lotteries.
Finally, bill 2713-3, submitted by Artem Dubnov, would scrap specific gambling taxes entirely, with the government making money from the industry only through licence fees and normal business and income taxes.
After the bill 2285-D was rejected, the president Volodymyr Zelensky decided to start enforcing the anti-gambling laws. Since then, Ukrainian courts have issued blocking orders to many unlicensed igaming sites, including a list of 32 in February and a further 59 in May.
The Ukrainian Association of Telecommunications Operators (Telas), the Internet Association of Ukraine, the Telecommunication Chamber of Ukraine and other telecommunications bodies appealed to the Committee on Digital Transformation to put an end to these blocking orders.
The Committee of Digital Transformation then submitted a recommendation to the Committee on Finance, Tax and Customs Policy to ban these orders in the new bill. However, it will not be clear whether such a provision is in the final bill until it is published.
