Gaming Law 2020

Last Updated November 24, 2020

Ukraine

Law and Practice

Authors



4H Agency is a boutique consulting firm fully dedicated to serving members of the gambling business ecosystem in their quest to open up new opportunities, be it a new market, a new vertical, or a new product. The firm's team members, who work in offices in Cyprus, Ukraine and Russia, have experience at the top international law firms as well as international gambling operators and service providers. Moreover, 4H Agency has an established network of various regional service providers and agents (local law firms, HR agencies and seasoned experts in different fields, including marketing and PR, payments and business analytics), which have been carefully chosen in order that 4H is able to act as a “one-stop shop” for international gambling operators entering certain jurisdictions.

For 11 years, all forms of gambling were prohibited in Ukraine. However, on 11 August 2020 the President of Ukraine Volodymyr Zelensky signed a law on the regulation of the gambling business in Ukraine (the Gambling Law), which has lifted the said ban.

As of February 2021, there is a long road ahead for the authorities to complete all the steps that are required for the opening up of the gambling market, but progress looks good so far. These steps include:

  • the incorporation of the Ukrainian Gambling and Lottery Commission (the Regulator) – it was formally incorporated at the beginning of October 2020, whilst the process of appointing its members is still to be finalised;
  • adoption of secondary legislation legislation related to the process of gambling equipment certification (eg, such technical documents include technical requirements of the gambling equipment, requirements of the Ukrainian gambling certifying bodies, etc);
  • preparation of separate legislation regarding sports poker;
  • creation of a system of online monitoring (such system is intended to control the operators’ gross gaming revenue (GGR)); and
  • preparation and adoption of the amendments to the Tax Code.

One obvious recent change is the adoption of the Gambling Law. For details, please see 1.1 Current Outlook.

Pursuant to the Gambling Law, practically all known online gambling sectors have become permitted and regulated under different licences. They include:

  • betting (including totalisators);
  • casinos; and
  • poker.

Lotteries are not considered to be gambling and are regulated by a separate Law, which provides that lotteries may be offered online as well.

The following licences cover the online sectors:

  • betting licences (this licence covers both land-based and online offerings, it also includes off-the-racecourse totalisator offerings);
  • online casino licences; and
  • online poker licences.

The following types of land-based gambling offerings have become permitted and regulated under different licences:

  • casinos;
  • poker;
  • betting (including totalisators);
  • slot-machine halls; and
  • racecourse totalisators.

As mentioned in 2.2 Online, lotteries are not considered to be gambling and are regulated by a separate Law, which provides that lotteries may be offered in the land-based format as well.

The following licences cover the land-based sectors:

  • land-based casino licences (this licence also allows the organisation of poker games in the casino);
  • betting licences (this licence covers both land-based and online offerings, it also includes totalisator offerings);
  • land-based slot-machine hall licences;
  • racecourse totalisator licences; and
  • investment licences (this licence is different from the others, it is issued in relation to large-scale investment projects in the field of gambling that are approved by the Cabinet of Ministers of Ukraine).

As the gambling market is still in its infancy, as of 01 February 2021, the only key legislation is the Gambling Law and the first secondary legislation documents that have been adopted by the Cabinet of Ministers of Ukraine, inter alia: the Cabinet of Ministers of Ukraine’s Decree “On the Gambling and Lottery Regulatory Commission (the Commission Decree) and the Cabinet of Ministers of Ukraine’s Decree “On the Licensing Terms for Organisation and Conducting of Gambling”.

In addition, as in the vast majority of ex-USSR countries (which are usually countries with a civil law system), the Ukrainian gambling sector will also be affected by the general laws which cover all spheres of business, for instance:

  • the Advertising Law;
  • the Tax Code;
  • the Criminal Code;
  • the AML Law; and
  • the Code of Administrative Offences.

The Gambling Law does not contain a definition of “gambling” per se.

Instead, the Gambling Law provides for the definition of a “gambling game”, which definition is “any game, a condition of which is that a player must place a bet entitling him to a prize, the odds and amount of which depend, fully or partially, on chance and such player’s knowledge and skills”.

The Gambling Law does not provide for a definition of “land-based gambling”.

Instead, there is a set of definitions outlining the status of “gambling organisers” within different regulated sectors (which are outlined in 2.2 Land-Based).

Land-Based Casinos

The definition used is “casino organiser”, which is defined as “a Ukrainian resident entity that is licensed to carry out the business of organising and conducting gambling games in a casino gaming venue in accordance with this Law”.

Land-Based Betting and Totalisators

The definition used is “betting organiser”, which is defined as “a Ukrainian resident entity that is licensed to carry out the activities of organising and conducting betting activities at betting outlets and/or on the internet in accordance with this Law”.

Betting activities are defined as “the business of organising and conducting wagers (bookmaker wagers and totalisator wagers) at betting outlets and/or on the internet”.

In turn, a wager is defined as “a gambling game that involves making a wager (in accordance with wagering rules approved by a betting organiser) between a player (players) and such betting organiser (bookmaker wager) or between each of two or more players (totalisator wager) on the outcome of one or more events that are unknown beforehand and cannot be influenced by a player (players) and/or such gambling organiser”.

Land-Based Slot-Machine Halls

The definition used is “gaming machine gambling organiser”, which is defined as “a Ukrainian resident entity that is licensed to carry out the activities of organising and conducting gambling games in gaming machine venues in accordance with this Law”.

Racecourse Totalisator

There is no definition for this sector in place, but the Gambling Law provides that this activity is permitted only under a racecourse totalisator licence, which may be issued only by the racecourse owner. The scope of this activity is, therefore, rather clear.

The Gambling Law does not provide for a definition of “online gambling”.

Instead, there is a set of definitions outlining the status of “gambling organisers” within different regulated sectors (which are outlined in 2.1 Online).

Online Casinos

The definition used is “online casino organiser”, which is defined as “a Ukrainian resident entity that is licensed to carry out the activities of organising and conducting casino gambling games on the internet in accordance with this Law”.

Online Betting and Totalisators

The definition used is “betting organiser”, which is defined as “a Ukrainian resident entity that is licensed to carry out the activities of organising and conducting betting activities at betting outlets and/or on the internet in accordance with this Law”.

As a betting vertical is regulated similarly in its online and land-based forms (as also follows from the above definition), please see 3.3 Definition of Land-Based Gambling for other related definitions provided by the Gambling Law.

Online Poker

The definition used is “online poker organiser”, which is defined as “a Ukrainian resident entity that is licensed to carry out the activities of organising and conducting poker games on the internet (online poker) in accordance with this Law”.

Types of offences are provided by the Gambling Law as well as by the Criminal Code and other Laws of Ukraine.

In terms of the description of the key offences, it is practical to divide them into two groups: offences provided by the Gambling Law and offences that are outside the scope of the Gambling Law.

Key Gambling Law Offences

The Gambling Law provides, inter alia, for the following key offences:

  • violation of advertising requirements;
  • use of gambling equipment for which no licence has been obtained or without required certification;
  • failure to ensure that excluded players will not enter the gambling venue;
  • failure to pay licence fees in time – this violation may result in licence revocation;
  • failure to pay any penalties imposed by the Regulator – this violation may result in licence revocation; and
  • repeated violations of the Gambling Law, AML Law and licence conditions — these violations may result in licence revocation.

Key Offences Outside the Scope of the Gambling Law

There is only one key offence in this section, namely organisation of gambling without a relevant licence. It should be separately noted that this offence is applicable only to individuals (natural persons) as it is of a criminal nature.

Possible penalties for the gambling-related offences include fines and revocation of licence.

Gambling-Related Fines

In cases of imposition of criminal liability such fines may be up to EUR24,000.

Liability that is imposed as a result of a violation of the Gambling Law may result in fines of up to EUR186,000 per violation.

Revocation of Licence

Upon occurrence of the grounds specified in the Gambling Law (please see 3.5 Key Offences), the Regulator may revoke the issued gambling licence.

The Gambling Law provides for a number of steps that need to be taken before the full market opening, including the adoption of different laws and regulations. For details, please see 1.1 Current Outlook.

According to the Gambling Law, the government authority which is responsible for the regulation of gambling matters is the Ukrainian Gambling and Lottery Commission (the Regulator).

Given the fact that the Regulator is still yet to get a grip on the Ukrainian gambling market, it is unclear what kind of a regulatory approach it will employ in relation to the market.

However, it might be safe to predict that – given the close attention paid by the Ukrainian government, and President Zelensky himself, to the gambling industry, as well as the rather unfriendly political background for gambling in Ukraine – the Regulator is most likely to employ an active “hands-on” approach with regard to licensees.

The Gambling Law establishes a number of licence types, which can be roughly divided into two groups:

  • "main" licences – licences that may be used and obtained independently of other licences; and
  • "ancillary" licences – licences that may be used and obtained only together with a main licence.

Main Licences

The list of main licences is matched to the list of regulated activities under the Gambling Law, it provides for:

  • land-based casino licences;
  • online casino licences;
  • betting licences;
  • land-based slot-machine licences;
  • online poker licences;
  • racecourse totalisator licences;
  • provision of gambling services (B2B) licences; and
  • investment licences.

Ancillary Licences

Ancillary licences may be considered as such as they may only be:

  • obtained under the main licence (eg, a land-based casino licence); and
  • used together with the main licence (eg, an ancillary licence for slot machines can be obtained both under the main licence for a land-based casino and a main licence for land-based slot-machine halls).

Owing to that, such licences are for:

  • casino gaming tables and roulette tables;
  • slot machines; and
  • land-based betting shops.

As of 02 February 2020, the Regulator started issuance of the licences.

However, there are still a number of actions that should be completed by the Ukrainian authorities to fully launch the Ukrainian gambling market.

All types of licences (except for the investment license) are issued for five years.

The investment licence is issued for a term of ten years.

An entity wishing to obtain a licence should apply for it, provided that the applicant (ie, the entity that will be the gambling operator upon obtaining the licence) is in compliance with, inter alia, the following requirements, which are established for gambling operators by the Gambling Law.

  • The legal entity applying for a licence should be incorporated and act under the laws of Ukraine.
  • The legal entity applying for a licence should not be directly or indirectly controlled by residents of a foreign state recognised as an occupier or aggressor (the status of occupier or aggressor is determined by Ukrainian legislation), or acting in the interests of such states.
  • The managers, head of accounting and ultimate beneficial owners (UBOs) of the applying entity should not be citizens of a foreign state recognised as an occupier or aggressor, or be acting in the interests of such states.
  • The shareholders of a legal entity applying for a licence should not be:
    1. residents of a foreign state recognised as an occupier or aggressor; or
    2. legal entities domiciled in the countries listed in the Financial Action Task Force blacklist.
  • The legal entity applying for a licence should not directly or indirectly own shares in an entity that is a resident of a foreign state recognised as an occupier or aggressor.
  • The amount of the applying entity’s charter capital at the moment of application should be no less than UAH30 million (approximately EUR890,000).
  • It is forbidden to use, for the payment of charter capital, funds that are from the budget (aside from gambling operators that have the rights to a racecourse and are going to organise a totalisator) or of unknown origin.

Moreover, the applicant should provide, inter alia, the following documents and information:

  • information about the UBO of the applicant;
  • information about the amount of charter capital and the date of completion of its formation confirmed by an independent auditor;
  • documents confirming the origin of the funds used for the payment of the charter capital;
  • information about the brand of the applicant, which is defined as corporate style, name, logo and other means (including objects of intellectual property) allowing for the individualisation of licensees – please note that the Gambling Law establishes that only one brand may be used per individual licence;
  • information and documents confirming rights to domain names in the ".UA" domain zone as well as information about the hosting service provider and domain name register (for online licence applications);
  • information in respect of the rights of the operator to the software and hardware; and
  • other standard documents and information – confirming the absence of criminal liability of the management, shareholders, UBOs of the applicant, extracts from the relevant corporate registers, etc.

The Regulator shall decide to grant or refuse a licence within 15 business days from the date of receipt of the licence application and accompanying documents.

According to the Gambling Law, the licences are issued upon payment of the relevant licence fee for the first year of a licence term.

Please see 4.9 Ongoing Annual Fees for information on the annual licence fee amounts that are required to be paid before the licence is finally issued.

According to the Gambling Law, annual licence fees are the following.

Land-Based Casino

In Kyiv: EUR2.13 million (UAH72 million).

In other cities: EUR1.07 million (UAH36 million).

Online Casino

Before the online monitoring system is live: EUR690,000 (UAH23.4 million).

After the online monitoring system is live: EUR230,000 (UAH7.8 million).

Sports Betting

Before the online monitoring system is live: EUR3.2 million (UAH108 million).

After the online monitoring system is live: EUR1.07 million (UAH36 million.

Slot-Machine Halls

EUR266,000 (UAH9 million).

Online Poker

EUR180,000 (UAH6 million).

Licence for the Provision of Gambling Services

EUR10,700 (UAH360,000).

Investment Licence

No fees.

Racecourse Totalisator

EUR180 (UAH6,000).

Licence for Casino Gaming Tables and Roulette Tables

One roulette table: EUR31,000 (UAH1.05 million).

One casino gaming table: EUR16,000 (UAH540,000.

Licence for Slot Machines

Before the online monitoring system is live: EUR3,180 (UAH108,000) for one slot-machine.

After the online monitoring system is live: EUR1,060 (UAH36,000) for one slot-machine.

Licence for Land-Based Betting Shop

EUR5,300 (UAH180,000).

The Regulator has the right to confirm that the particular premises for organising and conducting gambling within gambling venues are in compliance with the requirements established by the Gambling Law. Permits are issued to the owners of the premises confirming that they meet with the requirements set out in the Gambling Law in respect of gambling venues.

According to the Gambling Law, premises requirements vary depending on the particular activity. The key requirements are set out below.

Land-Based Casino

This activity may be carried out only within special gaming zones, namely:

  • Kyiv – 5-star hotels, no fewer than 150 rooms;
  • other cities – 4 and 5-star hotels, no fewer than 100 rooms;
  • outdoor hotels – hotels with 5-star equipment, area not less than 10,000 square metres; and
  • hotels within the special gaming zone designated by the Cabinet of Ministers – area not less than 10,000 square metres.

The minimum area of casino premises located at 5-star hotels is 500 square metres.

Betting

Betting shops should be located in special gaming zones, namely:

  • for Kyiv – 3, 4, or 5-star hotels, no fewer than 50 rooms;
  • racecourses; and
  • for other cities – 3, 4, and 5-star hotels, no fewer than 25 rooms.

Betting outlets of a betting operator may not be located:

  • directly on the premises where state or local authorities are located;
  • directly on the premises of pre-school educational establishments, general secondary educational establishments, out-of-school, specialised, higher educational and other educational establishments, including where hostels of such establishments are located;
  • directly on the premises of cultural institutions, including libraries, museums, theatres and exhibition galleries;
  • directly on the premises of healthcare facilities;
  • directly on the premises of specialised children's entertainment centres;
  • directly on the premises of religious buildings and structures or on premises that belong to religious organisations;
  • in housing premises or other residential buildings, including apartment buildings; or
  • in buildings/premises under construction, kiosks, open sheds or other temporary structures used for carrying on business.

The minimum area of the premises in which a betting shop could be located is 50 square metres.

Slot-Machine Halls

This activity may be carried out only within special gaming zones, namely:

  • for Kyiv – 3, 4, or 5-star hotels, of no fewer than 50 rooms, and the minimum area of the slot-machine hall should be 300 square metres; and
  • for other cities – 3, 4, or 5-star hotels, of no fewer than 25 rooms, and the minimum area of the slot-machine hall should be 150 square metres.

Slot-machine halls may not be located:

  • directly on the premises where state authorities, other government agencies or local authorities are located;
  • within 500 metres of pre-school educational establishments, general secondary educational establishments, out-of-school, specialised, vocational (vocational and technical) educational and pre-higher professional educational establishments;
  • directly on the premises of religious buildings and structures and on premises that belong to religious organisations;
  • in housing premises or other residential buildings, including apartment buildings;
  • in projects under construction, kiosks, open sheds or mobile small architecture or other temporary structures used for carrying on business; or
  • in cities with a population below 10,000.

As mentioned in 1.1 Current Outlook, legislation secondary to the Gambling Law is yet to be adopted and it is possible that there will soon be some additional changes with regard to land-based sectors.

The Gambling Law establishes the following types of online B2C licences:

  • online casinos;
  • betting; and
  • online poker.

The Gambling Law establishes, inter alia, the following requirements applicable to all online gambling verticals:

  • an online gambling operator should organise and conduct gambling games under its brand through a specific online system that meets the requirements of the Gambling Law;
  • a gambling operator may carry out its activities on the internet through a website within a ".UA" domain zone and/or through mobile applications that meet the requirements of the Gambling Law; and
  • online gambling operators should only use the domain name used for their online offerings on a lawful basis (ie, possess the rights to such domain name).

The current version of the Gambling Law provides for a B2B licence, but, unfortunately, its framework is underdeveloped.

That said, the description of the B2B licence looks like this: “Ukrainian legal entities shall have the right to render the services of suppliers and/or providers of software directly used in the organisation and conduct of gambling games by, including, without limitation, gambling organisers and non-Ukrainian residents (that hold a foreign gambling licence) solely under a service licence in relation to the organisation and conduct of gambling games”. This approach to B2B licensing is unprecedented and ought to be amended in order to reach the regulation’s goals.

Other aspects of B2B licensing are not described within the Gambling Law and it is unclear if the B2B licensees are subject to the same compliance level and requirements as B2C licensees, or if there is a separate regulation framework for B2B licensees. For instance, it is unclear for now if applicants for this service licence are obliged to be compliant with the requirements for B2C licences (eg, charter capital amount and bank guarantee/deposit).

The Gambling Law does not provide for any explicit regulation of the use of affiliates.

The Gambling Law does not provide for any explicit regulation of the use of white-label providers.

As mentioned in 1.1 Current Outlook, legislation secondary to the Gambling Law is yet to be adopted and it is possible that there will be some additional changes with regard to online sectors.

The Gambling Law provides for the two main types of blocking.

  • Website blocking:
    1. a person who organises, conducts or gives access to gambling through a website without a relevant licence shall restrict access to that website in or from Ukraine; and
    2. the provider of hosting (information storage) services whose equipment hosts a website (or a part thereof) that is used to organise, conduct or give access to gambling games without a relevant licence shall restrict access to that website (or such part thereof) in or from Ukraine.
  • Financial transactions blocking – any bank carrying on banking business in Ukraine, or any payment systems operating in Ukraine, shall reject payments to any persons that organise and conduct gambling, or that provide access to services in respect of such gambling, without a relevant licence in Ukraine.

The Gambling Law defines “responsible gambling” as “the basic principle of organising and conducting gambling, under which gambling operators shall take measures to prevent and mitigate the adverse consequences of an individual participating in gambling, as well as measures aimed at arranging for self-restriction and self-control by players”.

The Gambling Law also provides that the Regulator should adopt a document outlining the principles of responsible gambling; however, as of February 2021, this document has yet to be adopted.

Despite this, the Gambling Law does provide, inter alia, for the following requirements for gambling operators, which are related to responsible gambling policies.

  • Gambling operators should make publicly available (at places where gambling activities are carried out) certain information about:
    1. gambling addiction and responsible gambling;
    2. the player age restrictions;
    3. return-to-player figure (RTP);
    4. principles of responsible gambling;
    5. signs of pathological and problematic gambling addiction; and
    6. the places where assistance can be received in cases of gambling addiction.
  • Gambling operators should ensure that any player (or players) and any visitor (or visitors) are identified in a gaming venue in the manner prescribed by the Gambling Law and that any player (or players) are identified when their activities are carried out on the internet.
  • Gambling operators should not allow individuals with restricted access to gambling, and individuals suffering from extreme gambling addiction, to participate in gambling to the extent and in the manner determined by the Regulator (the particulars of this measure are still to be determined by the Regulator).
  • Gambling operators should refrain from providing players with any bonus payments, gifts and/or goods (services) in any form or using other forms of encouragement, the provision of which is directly or indirectly due to the loss of a player in the relevant gambling game.

The Gambling Law provides for the following main tools for responsible gambling.

Player Identification

Identification in respect of a player on the internet shall be carried out by the gambling operator by means of an electronic signature, a SIM card that supports MobileID, a BankID or another verification method used in accordance with the Gambling Law.

The identification (verification and data check) in respect of a player or visitor shall be carried out by the gambling operator’s employees by checking an original document giving evidence of age and identity during the first visit to a gaming venue.

Age Restrictions

The legal age for players and employees of gambling operators is set at 21 years.

Self-Exclusion

Self-exclusion can be established for a set period: from six months to three years.

Exclusion by the Regulator

Upon application by first-degree family members or legal representatives (restriction application), a player can be excluded by the Regulator. This exclusion can be imposed for a period of up to six months, if:

  • the game costs exceed the player's personal income, which puts the player or their family in a difficult financial situation;
  • there are debt obligations in excess of 100 times the minimum subsistence level of income (as of February 2021, this minimum subsistence level of income is equal to EUR180);
  • the individual evades paying alimony for more than three months; or
  • the individual or their family members are recipients of a housing subsidy or housing and utility fee allowances.

Exclusion by the Courts

Upon application by first-degree family members or legal representatives (restriction application), a player can be excluded by the courts. This exclusion can be imposed for a period of not less than six months, if:

  • the game costs exceed the player's personal income, which puts the player or their family in a difficult financial situation;
  • there are debt obligations in excess of 100 times the minimum subsistence level of income (as of February 2021, this minimum subsistence level of income is equal to EUR180);
  • the individual evades paying alimony for more than three months; or
  • the individual or their family members are recipients of a housing subsidy or housing and utility fee allowances.

Excluded individuals should be included in the Register of Individuals with Restricted Access to Gaming Venues and/or Gambling, which is accessible by all gambling operators.

According to the Gambling Law, the key AML legislation applicable to gambling operators is the Law “On Preventing and Countering the Legalisation (Laundering) of the Proceeds of Crime, the Financing of Terrorism and the Financing of the Proliferation of Weapons of Mass Destruction” (the AML Law) which was adopted at the end of 2019.

According to the AML Law, gambling operators, being the subject of the primary financial monitoring, are obliged to implement, inter alia, the following measures aimed at the reduction of AML risk.

  • The application of a risk-oriented approach in their activities, taking into account the relevant risk criteria.
  • The development, implementation and update of financial monitoring rules, programmes of initial financial monitoring and other internal documents on financial monitoring.
  • The appointment an employee responsible for the implementation of the rules of financial monitoring.
  • Ensuring the monitoring of players' financial transactions (including those carried out in the players' interests) for compliance with the primary financial monitoring information about the players, including, if necessary, information about the source of funds related to the financial transaction (or transactions).
  • Ensuring the registration of financial transactions subject to financial monitoring (the threshold for such registration is EUR12,000).
  • Not admitting – to management, membership in their governing bodies (supervisory and executive) or control – persons who have not expunged, or not removed in the manner prescribed by law, convictions for mercenary criminal offences or terrorism, as well as their accomplices in such criminal offences.
  • Player identification.
  • Gathering and storing information in respect of suspicious transactions.

In addition, the AML Law, along with the general requirements regarding the subject of the primary financial monitoring, also provides requirements applicable only to gambling operators, such as:

  • due diligence regarding persons who have acquired the right to receive a prize in a lottery or gambling, made a financial transaction involving the exchange of game substitutes for money where that financial transaction is subject to financial monitoring in accordance with AML Law;
  • due diligence regarding persons who have expressed their intention to return their bets to the lottery or gambling operator; and
  • due diligence regarding persons who have expressed an intention to bet on a lottery or gambling, or exchange money for hryvnia substitutes.

According to the Gambling Law, the Ukrainian authority responsible for the imposition of fines in respect of a violation of the requirements regarding advertising for gambling activity (and therefore responsible for the advertising supervision) should be the Regulator.

According to Ukrainian laws on advertising, advertising is defined as “information about a person or product, disseminated in any form and in any way and intended to form or maintain the awareness of consumers of advertising and their interest in such person or product”.

Ukrainian regulations with regard to advertising are of a restrictive nature (the same approach is employed by other ex-USSR countries). For a detailed description of the restrictions, please see 9.4 Restrictions on Advertising.

Gambling games, or any trade and service marks or other intellectual property under which the activities of organising and conducting of gambling games are carried out, or any other designations under which gambling games are conducted shall be prohibited from being advertised:

  • on radio or television, including by cable, satellite, IPTV, online or mobile or digital television, or by other means of signal transmission, from 6am to 11pm;
  • in science, popular science, educational, public policy, reference, fiction, children's and youth or other publications (other than dedicated gambling publications);
  • in all print media (other than dedicated gambling publications);
  • on the exterior or interior surfaces of vehicles or metro carriages;
  • through outdoor advertising;
  • on any products (including clothes) designed primarily for people under the age of 21; or
  • at places where entertainment, theatre, concerts, sports or other events are held for people under the age of 21.

In addition:

  • no gambling advertising may use people under the age of 21 (even as photo models);
  • no gambling advertising shall lead anyone to believe that winning a gambling game is easy and that gambling can be a source of income or a job alternative;
  • orders for gambling advertisements to be produced, placed and/or distributed may be placed only by a business entity that is licensed to carry out the relevant activity in the organisation and conduct of gambling games;
  • any advertising activities shall be prohibited in respect of any gambling games of a gambling businesses, and/or any trade and service marks or other intellectual property under which the activities of organising and conducting of gambling games are carried out, where the advertiser is not licensed to carry out the relevant activity; and
  • no business entity may act as an advertiser for a gambling organiser’s brand that belongs to another business entity.

Violation of the advertising regulations is punished with a fine of up to EUR53,000 (UAH1.8 million).

The Gambling Law does not provide for any definitive requirements with regard to acquisitions and changes of control of gaming and gambling companies, except for the obligation of the licensees to keep the Regulator updated of any changes in the information that was filed at the application stage (please see 4.6 Application Requirements for details).

Please see 10.1 Disclosure Requirements.

Please see 10.1 Disclosure Requirements.

According to the Gambling Law and the Commission Decree, the Regulator has, inter alia, the following powers.

  • To act as a licensing authority for the business of organising and conducting gambling games and to decide to revoke licences.
  • To establish procedures for inspecting gaming equipment following inspection of such gaming equipment.
  • To organise and exercise state control over the organisation and conduct of gambling games and, in particular, control over compliance with the Gambling Law and licence conditions by conducting scheduled, unscheduled and physical inspections, including through the test purchase method.
  • To take measures to prevent and detect violations of the Gambling Law applicable to the organisation and conduct of gambling games.
  • To report to law enforcement agencies where gaming venues are found to be engaged in illegal activities, and co-operate with law enforcement agencies for the purposes of preventing the development and operation of prohibited gambling games and gambling venues.
  • To administer the state online monitoring system.
  • To impose penalties on gambling organisers and other business entities carrying out activities in the organisation and conduct of gambling.

It is impossible to draw up any conclusions with regard to the enforcement of sanctions as the process of licence issuance started only in the beginning of February 2021.

It is impossible to draw up any conclusions with regard to the enforcement of financial penalties as the process of licence issuance started only in the beginning of February 2021.

The concept of “social gaming” is not recognised by the Gambling Law and there are no specific regulations for this activity.

Starting from 7 September 2020, esports have been recognised as official sports in Ukraine, which is an obvious positive trend for the esports market.

It is also anticipated that there might be certain subsequent changes to legislation related to esports, but there is no definitive information about such changes at this point.

The concept of “fantasy sports” is not recognised by the Gambling Law and there are no specific regulations for this activity.

The concept of “skill gaming” is not recognised by the Gambling Law and there are no specific regulations for this activity.

In the beginning of August 2020, one of the people’s deputies proposed that the Ukrainian Parliament (Verkhovna Rada) consider the draft law “On Virtual Assets”, which is intended to regulate the legal basis for blockchain, cryptocurrencies, tokens and mining. This draft law passed first reading on 02 December 2020.

This draft law is still yet to be passed on other stages, but the desire to regulate the industry might be considered as a positive trend.

Please see 1.1 Current Outlook.

Adoption of a taxation framework for the gambling industry is one of the steps that still needs to be taken before the market opening in accordance with the Gambling Law.

As of February 2021, the taxation framework has yet to be adopted.

It should also be noted that the Gambling Law provides that the gambling tax should be calculated on the basis of licensees’ GGR, which, in turn, should be determined with the help of an “online monitoring system” that should be within the Regulator’s domain.

This system is yet to be developed and installed. Until this system is in place, certain licence fees are tripled (please see 4.9 Ongoing Annual Fees).

4H Agency

Georgiou Katsounotou, 6
3036, Limassol
Cyprus

+7 915 353 34 08

im@4h.agency www.4h.agency
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Law and Practice

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4H Agency is a boutique consulting firm fully dedicated to serving members of the gambling business ecosystem in their quest to open up new opportunities, be it a new market, a new vertical, or a new product. The firm's team members, who work in offices in Cyprus, Ukraine and Russia, have experience at the top international law firms as well as international gambling operators and service providers. Moreover, 4H Agency has an established network of various regional service providers and agents (local law firms, HR agencies and seasoned experts in different fields, including marketing and PR, payments and business analytics), which have been carefully chosen in order that 4H is able to act as a “one-stop shop” for international gambling operators entering certain jurisdictions.

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