Any regulatory activity on the part of the government should benefit the state and correspond to the policy in one or another branch of the economy, stimulating its development and the growth of legal business.
This is exactly what happened recently, when the Cabinet of Ministers initially adopted an absolutely correct document, namely Resolution No. 566 dated May 17, 2024 “Some issues of countering the negative consequences of the functioning of gambling on the Internet”, which implemented the provisions of Decree of the President of Ukraine No. 234/ 2024. This Decree put into effect the decision of the NSDC “Regarding Countering the Negative Consequences of Gambling on the Internet”, which, in particular, provided for the introduction of additional restrictions on the advertising of gambling games to prevent the use of the symbols of the Armed Forces of Ukraine and other military formations formed in accordance with the laws of Ukraine.
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It would seem that everything is logical and appropriate. But… this resolution “worked” for only three days, and already on May 21, the Government makes an addition to it, which actually PROHIBITS ALL LEGAL GAMING ADVERTISING IN UKRAINE!
This ban should be in effect until the adoption of changes to the current legislation, in particular, until the entry into force of draft law No. 9256-d, for which the parliamentarians recently voted in the first reading. This was done with a “good” goal – to eliminate the inconsistency of the previous resolution with the requirements of advertising and media legislation. But… everything became even worse than it was.
First, any unjustified restriction of the legal market automatically leads to the growth of the illegal market, and banning legal advertising is almost the best gift for the black market, which becomes a monopoly in the online promotion of its illegal services (offline is somewhat more difficult, but also the black market there is quite good, unfortunately, it will feel better).
Secondly, the introduction of the ban by the Government Resolution directly contradicts the provisions of the Law on Advertising, which clearly defines restrictions on gambling advertising and does not contain any “temporary and/or transitional norms” in the style of “until another law is adopted”. That is, the government act can be appealed in the order of administrative proceedings. Let me remind you that the inconsistency of the government’s resolution with the laws of Ukraine can be established by the court during the appeal of the resolution itself or the regulator’s decision to apply a sanction based on the requirements of such a resolution.
Thirdly, the introduction of a ban on legal advertising of gambling through the Government Decree, and the possible cementing of such a ban through the adoption of draft law No. 9256-d – will deal a powerful economic blow to the legal media market, the gambling market and… state budget revenues from both of these industries! And the losses will be quite significant. In particular, the media market alone this year will be shortchanged by at least UAH 500-700 million. By industry, losses are forecast at the level of:
up to UAH 400 million on television advertising;
UAH 100-150 million on radio advertising;
up to UAH 100 million for online advertising;
almost UAH 50 million on external advertising.
The most critical are the losses of the radio market, since radio stations have no opportunity to cover them due to the activation of cooperation with other advertisers. Accordingly, further bankruptcy of some of them can be assumed.
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Online resources, most likely, will move to cooperation with illegal ones, which will contribute to a decrease in the number of visits to legal gambling Internet resources. Given the fact that at the moment there are about two orders of magnitude more illegal sites than legal ones, banning legal advertising will radically reduce the income of licensed gambling market organizers and, accordingly, enrich the illegal ones. Everyone loses from this: both business, and the state, and local self-government bodies, to whose budgets a part of the taxes from the gambling business also went. And no profits – no taxes.
Illegals cannot be defeated by banning the advertising of legal gambling! And it is worth correcting the situation with unfounded and illogical bans now. Did you find the news interesting and informative? Want more of the gambling news online and stay updated on the events? From jackpots to scandals – explore unmissable casino news today. Subscribe to our ‘Gambling News’ section and receive notifications about fresh publications.
