Gambling in Ukraine

After a May 2009 fire in a gambling hall in Dnipropetrovsk that killed nine people several parts of society demanded a ban on gambling.[5] The Ukrainian parliament passed the law "On Prohibition of Gambling Business in Ukraine" (Gambling Ban Law) banning gambling business and any participation in gambling in Ukraine on May 15. The President of Ukraine Viktor Yushchenko signed the law on June 23 and on June 25 it came into force.[2] The Law On Prohibition of Gambling Business in Ukraine also applied to internet casinos.[4] It did not apply to lotteries.[1]

On 6 January 2010 the Cabinet of Ministers excluded gambling from the list of economic activities, which can be licensed.[6] This is read in the Cabinet of Ministers resolution No.14 of Jan. 6.

The law gave the definition of gambling. It stated that any game requiring the player to make a bet that enables them to receive a prize and the result of which depends on chance partially or completely, is considered gambling.[7] Thus, all kinds of gambling, including slot machines, bookmaking, online gambling, interactive gambling became illegal. The law also provided a list of activities that are not considered gambling. These included lotteries, creative competitions and sporting events, pool, bowling, free draws carried for purposes of advertising, charity, promotion and education, etc.[7]

According to the Gambling Ban Law, both organization of gambling business and gambling were illegal. The law provided that any organizer or gambling should be fined, while the gambling equipment and the revenue received was subject to transfer to the budget of the state.[7] Despite the prohibition, by July 20, 2009 over 500 facts of illegal operation of gambling establishments had been exposed in Ukraine which resulted in the confiscation of 6,000 slot machines and around 216 criminal charges.[8]

However, it did not lead to cessation of the gambling business, but it led to its criminalization. The police began to cover gambling business for reward.

According to Prime Minister of Ukraine Yulia Tymoshenko Ukraine had an unusually high number of gambling halls (over 100,000), which "take the last money from families, which don't have much, and which corrupt young Ukrainians."[9]

Poker tournaments in Ukraine flourished after the ban as a way of circumventing the country's gambling ban. Hence on December 31, 2009 the Justice Ministry of Ukraine rescinded its decision of July 1, 2009 which had included poker on the list of sports recognized in Ukraine.[14] When parliament legalised gambling again on 14 July 2020 poker tournaments were also reallowed.[1] Albeit with regulations and age restrictions.[1]

Ukrainian President Viktor Yanukovych signed a law banning of paid interactive quizzes on TV and radio on 6 March 2012 (except for channels with limited access).[15]

On 14 July 2020 president Volodymyr Zelenskyy signed the Ukrainian law “On State Regulation of Organising and Conducting Gambling”. Both local and foreign investors will have access to the market, only legal entities registered in Ukraine may become gambling operators. Gambling operators shall not be controlled by a Russian resident nor have a Russian person as a shareholder or Ultimate Beneficial Owner (UBO). Neither should they have shareholders registered in countries currently blacklisted by the Financial Action Task Force (FATF), in other words North Korea and Iran. In addition, a gambling operator must have a share capital of at least USD 1.1 million (UAH 30.7 million/GBP 906,000/EUR 1.0 million). They must open a deposit account or obtain a guarantee from a Ukrainian bank for USD 1.2 million, and they must have a dot.ua domain name.[16]

The state budget already this year includes proceeds from the legalization of "gambling" in 4.5 billion hryvnia (164 million USD). This is 118 hryvnia (4,3 USD) per each Ukrainian. Gambling establishments cannot be advertised in the media and programs for Ukrainian minors, in places where entertainment and sports events are held. The outdoor advertising is allowed from 21:00 to 7:00.[17]

At the stage of passing through the Verkhovna Rada, Boris Baum, the developer of the document and the chief adviser of the President's Office on gambling issues, was appointed to the post of chairman of the regulator. Another person headed the commission. On October 22, the government, at the suggestion of Minister Oleg Nemchinov, approved Ivan Rudoy in this position. There is practically no information about his previous activities in the public space. Presenting this candidacy, the minister said that Rudy has experience and knowledge in the field of management, international relations and finance. The names of two of the six members of the commission soon became known. The first is Eugene Hetman, coordinator of international projects. The second is Elena Vodolazhko, a member of the Ukrainian Bar Association, an employee of Rinat Akhmetov's DTEK Service LLC. A total of 378 applications were submitted to the competition, and 42 people were invited for an interview. An additional selection of candidates is planned to close 4 vacancies.[18]