Gambling reform presents numerous obstacles for Ukraine PM

Gambling industry stakeholders inside of Ukraine, are watching the new PM very closely, as he is said to be considering overturning its currently prohibitive gambling code.  

Since 2009, Ukraine has operated under the ‘Prohibition of Gambling Law’ mandate first sanctioned by the Viktor Yushchenko administration, which has seen all forms of gambling (expect lotteries) – be it land-based or digital – banned by Ukrainian authorities. 

However, whilst his victory was one of the biggest political upsets of 2019, it is still to be seen how easy or hard it will now be for him to govern one of Eastern Europe’s most geo-complex country. 

Despite the prohibition, Ukraine’s gambling frameworks remain conflicted as the nation’s lottery contracts are serviced by monopoly incumbents Patriot, MSL and UNL, at least one of these enterprises closely aligned with former President Petro Poroshenko’s administration.

Stakeholders seeking a liberalised market have criticised the lottery operators of forming yet another Ukrainian monopoly governed by cronyism, in which contracts are subleased to partners incapable of collecting taxes, developing social benefits or adding any form of economic value.

Having taken office, Zelensky maintains that SoP is open to reforming gambling laws, as long as directives can be served that are aligned to aiding Ukraine’s modernisation projects and creating fairer business conditions.

Yet, Zelensky has been swift in taking action to develop his gambling agenda and has instructed delegates from the SoP to work closely with industry stakeholders. The aim is for a new draft bill to be delivered to parliament within the next few months. 

Nevertheless, SoP’s fresh directive has raised concerns of potential conflicts of interest arising as powerful oligarchs are reported to want to limit Ukraine’s gambling framework to service a remit of  ‘limited Master Licenses‘, managed by ‘eligible companies’. 

Estimates on the size of a potential Ukraine gambling marketplace remain obscure with limited resources pointing towards a Ministry of Finance 2014/15 study which detailed that a regulated industry could provide approximately UAH 5 billion (€170m) of additional revenue for the state’s budget.