Then, a tragic fire accident took place in a slots parlour in Dnipropetrovsk in 2009 and forced the authorities to review the impact of gambling in the country. In turn, it led to the enactment of the notorious 2009 law on the Prohibition of Gambling Business.
Yet, the online casino and sports betting operators managed to exploit many loopholes in the legislation and continue to offer their services to Ukrainian players.
However, it seems the tides are changing in this second largest country in Europe, thanks to President Volodymyr Zelensky who took the first steps towards the legalisation of gambling on all levels. Those first steps culminated in a bill 2285-D that was approved in 2020 and which legalised all forms of gambling in the country. It also saw the creation of a state gambling regulator called the Gambling and Lotteries Regulation Commission (KRAIL), which was tasked with licensing operators.
The first online license was issued at the beginning of February 2021 to online casino operator Spaceiks LLC for its Kosmolot casino brand for a fee of UAH30.7 million ($1.1 million). The license was issued on a 5-year term. In March 2021, Parimatch became the first operator to receive sports betting and an online casino gambling license by KRAIL, thus paving the way together with Spaceiks for more operators to the market that had been predicted to bring in over $300 million in taxes alone.
Types of Ukraine Gambling Licenses
The new gambling regulation allows potential gambling businesses to apply for one of the seven main gambling licenses, which depends on the type of service they will supply. With that in mind, we can differentiate between:
- License for land-based casinos (which implies a minimum investment that needs to be made in the region)
- License for slot machine halls (up to 250 slots max)
- License for land-based and online sports betting
- License for hippodrome pool wagering
- License for online casino gambling
- License for online poker
It is also allowed for slot machine halls, hippodrome betting shops, the regular ones, and casinos to apply for a secondary license that could see a betting shop install a slot machine or a land-based casino include a betting shop.
Gambling Law Advantages
The gambling market in Ukraine is a huge one. As we have briefly mentioned, the government has put a price tag on the market at over $1.4 billion, according to some sources, and the estimate seems about right. Still, it is an emerging market, so any operator that chooses to enter it will have a considerable head start.
What’s more, the Gambling Committee has opted for a single 10% tax rate for all gambling verticals, which is lower than in most other regulated jurisdictions. What’s more, the gambling law does not require gambling business owners and employees to hold a separate license, which would normally result in higher costs.
Finally, there are no restrictions on how many licenses the registered operator can accumulate, so there is a great opportunity for the expansion of one’s initial gambling enterprise.
Key Requirements to Get a License
The majority of requirements that a gambling company wishing to operate in the Ukrainian market must meet actually differ depending on the type of license the company is applying for. However, there are some general requirements we should describe first.
For starters, only a Ukrainian company (a company registered in Ukraine) can apply for a license. It needs an authorised capital of at least UAH 30 million, which amounts to around €1 million. That company must not be owned, managed, and controlled by a Russian citizen or have a Russian company as a shareholder.
Speaking of requirements based on the type of license and gambling vertical, land-based casinos must be situated in a five-star hotel with a minimum of 150 rooms if the casino is to be in Kyiv. In other areas, a four or five-star hotel with at least 100 rooms will do. In addition, the casino floor needs to feature at least 500 square meters of space. The special investment license for land-based casinos allows companies that construct a five-star complex with between 150 and 200 rooms at least to apply for the casino license.
The slot halls can have a maximum of 250 slot machines across at least 300 square meters of space and also need to be in hotels with at least 3 starts and 50 rooms if in Kyiv, and 25 if in other areas. The same goes for betting shops. Only its space requirements are only 50 square meters.
Such requirements are not imposed on online casinos, sportsbooks, and poker sites.
License Cost and Taxes
The licenses in Ukraine are issued on a 5-year term and come at a specific cost. For brick-and-mortar casinos in Kyiv, that cost is about €8 million (UAH 283.4), while that number drops significantly for online casinos, and is set at around UAH 30.7 million (€940,000). On the other hand, a bookmaker’s license costs around €5 million, while the operators of slot machine halls need to pay a little over €1 million for a license.
It should be noted that these numbers are subject to change as they are based on the minimal wages in the country, and those limits vary regularly. For an online poker license, a company needs to pay a little over €700,000.
Land-based casinos and betting shops also need to pay an additional fee for every gaming table, betting shop, or machine they possess on the premises. Such costs do not apply to online gambling operations.
As for the gambling taxes, the Ukraine’s Committee on Finance, Tax and Customs Policy has approved a tax bill that says all gambling verticals will pay a flat 10% tax, plus an 18% general corporate tax rate.
The application procedure begins with companies providing the necessary documents, such as the confirmation of source of funds, criminal records of owners, shareholders, and key personnel, the gaming equipment certificates, and confirmation about the use of the .ua domain, hosting provider, etc. Of course, for land-based facilities, companies will also have to provide documents confirming their location.
Moreover, all operators will have to comply with the rules regarding the administration of the State Online Monitoring System that will be keeping an eye on the gambling activities and make sure everything is done fairly and according to the law. Finally, there are license fees that need to be paid according to the types of licenses.
However, if all this sounds too overwhelming, SoftGamings’ experts and professionals will be there to help you every step of the way and give you all the support and guidance you might need.
Since the Ukrainian gambling licenses are issued for a 5-year period, there aren’t any annual costs of maintenance. Of course, the land-based operators will have to pay for any additional machine, betting shop, or game table they add. But apart from the 10% tax rate on profits and the 18% general corporate tax rate, no additional charges will be incurred.