Public Gaming International May/June 2020

62 PUBLIC GAMING INTERNATIONAL • MAY/JUNE 2020 HISTORY I n 2010 gambling was banned in Ukraine. Casinos, slot machines and bookmakers’ shops were closed overnight. e market expected quick relaunch. But something went wrong and ten years passed from that day with no relaunch. State lotteries continued to work, and the Law on Lotteries was adopted later in 2012 which raised expectations among the operators that they would have long terms and a clear pathway to developing the business, attracting direct investments, and implementing new technologies and games. But … According to the Law, the regulator (Ministry of Finance) was to issue license terms and new licenses within 3 months from the day the Law came into e ect. Something went wrong again and no license terms were issued - until now. Certainly, that downsized potential investments, new technologies and long-term strategies for the three active lottery operators in Ukraine (all 3 are private entities, and 2 of them are members of EL and WLA). On the contrary, the period starting in 2013 became a nightmare for the Ukrainian lotteries which were severely impacted by the growth of unregulated operators and additionally by the increased taxation when a tax on all prizes (including entry level ) was introduced in the 2015 package with the tax on turnover instead of GGR, additional pro t tax for the operators and military dues. at made lotteries even less competitive with illegals that continued to invest not only online but o ine expansion as well. And that all happened in the environment of the Russian annexation of Crimea, the active phase of the war in the Eastern part of Ukraine causing the whole economy to be on the edge. Pressure from the expansion of illegal operators on the one side and tax pressure from another side squeezed the legal gaming market operators, causing the regulatory environment to revert back to the unstable level of the 1990s when enforcement of the laws was lax and allowing all competitive methods to be deployed. at hurt the business of the law-abiding operators like MSL a lot. Not only did our company manage to survive, MSL became stronger organizationally and even launched a new category of terminal instant tickets which was recognized at EL Innovation contest. TODAY. In 2019 Vladimir Zelenskiy, at that time a candidate for the Presidency, in his election campaign announced several priorities that he was going to introduce when he became the President of Ukraine. One of them was legalizing and proper regulation of gambling. By that time, it was obvious to everybody that a big unregulated gambling market had become a major problem. is painful, sensitive but also popular issue of the market control by the state gained robust support among the electorate. Certainly, the claim to regulate all spheres of the Ukrainian gaming market again became a promising one for the lottery operators who saw a lot of opportunities for expanding their business development in conditions of a stable, strict but transparent regulatory regime. In May 2020 Mr. Zelenskiy became the President. His party went on to win parliamentary elections and in the Autumn the rst draft of the Law of Ukraine on regulation of the Gaming Activities appeared on the web site of the Parliament. e Gambling Law combined all segments of the gaming market under one Act, having special sections on land-based casino, slot machine arcades, bookmakers, lotteries, poker and online. e over 80-pages draft document foresees formation of the Gambling Commission as the Regulator for the total Gaming market. is intention of the lawmakers to organize a separate authority to control the market is understandable after the current regulator (Ministry of Finance) has made clear that gambling and lotteries are not in their focus. e strategy expressed by the President of the country was to remove non-regulated gambling halls from the streets and have land-based casinos only in 5-star hotels, and also to restrict location of slot machine arcades to 3-5 star hotels. ere was and still are a lot of questions about where to locate, how many bookmakers should be licensed to operate, what games should be o ered online and which operators allowed to o er them, how to treat the lotteries, etc. ere is the Western approach of creating a regulatory UKRAINIAN GAMING MARKET: WHICH WAY WILL IT GO? LIFE CONTINUES EVEN DURING COVID-19 PANDEMIC AND QUARANTINE RESTRICTIONS. UKRAINIAN GAMBLING MARKET IS ON THE EVE TO OPEN ITS DOORS. THE QUESTION IS TO WHO? Evgeniy Vlasenko, Vice President, MSL State Lottery Ukraine