Will the Commission for the Regulation of Gambling and Lotteries be able to carry out its work? When will the bill on tax changes be adopted? And how much revenue have gambling activities actually brought to the budget of Ukraine? Check out the report from Gamingpost.net on the expert roundtable of the gambling market.
The issue of resolving the conflict regarding the election of KRAIL has been removed from the agenda in the Cabinet of Ministers. Boris Baum, the first deputy of the consultative and expert council under KRAIL, states that this will not stop the regulator’s work. However, there is a risk that the Commission’s decisions made after October 27 may be challenged.
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“According to the gambling law, if the powers of KRAIL members expire, they become acting members. But this only applies if they were elected through a competition. We have a separate law regulating the COVID system’s selection process—this is a separate law, and they fall under that law. Therefore, we have a certain conflict again. We are waiting for the voting and announcement of the competition,” says Boris Baum. This week, a meeting of the financial committee is expected to review amendments to bill 2713-d, according to Boris Baum. He anticipates that the document will be sent for voting.
“It is more important for us to have this law adopted in the second reading, and then refine it over the course of a year, rather than discussing unnecessary amendments and wasting precious minutes. Therefore, I really hope that the tax law will be adopted, and the technical amendments will be accepted. I hope one amendment will be adopted in the version we proposed, stating that the servers of organizations providing content can be located in the European Union. However, the operational servers themselves must be located on the territory of Ukraine,” says Boris Baum. Changes to the tax code will help the legal market combat the “black” market, believes Sergey Ivanenko, director of the company “Volna 4444.” Competing with illegal operators is nearly impossible at present.
“The burden on the business is around 140%. We pay corporate income tax, we pay winnings tax, and we pay GGR. There is a regulation that does not allow increasing the retention on gaming machines by more than 10%, so even when a GGR tax of 10% is mentioned, it should be understood that this is 30% of what we earn. The higher the burden on the legal business at the outset, the more the illegal market expands. The illegal market does not have to pay 18% GGR, nor 19.5% winnings tax—this discourages our guests from wanting to play legally. It’s easier to go around the corner to play, where they serve free alcohol and distribute cigarettes; I don’t know what else they do, but players are still choosing between us and the illegal market,” says Sergey Ivanenko.
Even without changes to the taxation system, the legal gambling business has already brought over 1 billion hryvnias into Ukraine’s budget. The related sectors of the economy have contributed even more, says Vladislav Kuichkin, head of the legal department at FAVBET.
“According to certain estimates, I can speak of a figure of 30 billion hryvnias, taking into account related industries. If we talk about the online business, which is currently not fully launched due to taxes, Ukraine is the IT hub of Eastern Europe, where the main expertise and resources are located. Accordingly, as soon as this market launches, not only foreign investors will come here, but software, gaming, content developers, and payment system companies will also develop very actively. This will become an additional driver for the IT industry and generate additional revenues for the budget,” says Vladislav Kuichkin.
The budget project for 2022 expects 763 million hryvnias in revenue from gambling. Gambling market experts believe that with the adoption of changes to the tax code, budget revenues will increase. If you found this publication helpful and interesting, we recommend subscribing to our breaking gambling news to receive notifications about the latest updates and stay informed about current events.
