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Ukraine Parliament votes to dissolve KRAIL, the gambling regulator

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Verkhovna Rada (Ukraine’s Parliament) has approved the liquidation of the Commission for the Regulation of Gambling and Lotteries.

This move is likely to result in significant changes in how gambling in Ukraine is governed.

Verkhovna Rada, Ukraine’s parliament, voted today (24th April). This vote is a result of the presentation of Draft Law No 9256d. This bill proposes to liquidate KRAIL.

In recent months, the impact of gambling in Ukraine on its wartime society was a topic of discussion. The petition was launched at the end March by Pavlo Petrochenko of the 59th Brigade.

In the final week of March, the petition was posted on the President’s Office website. The petition was launched in the last week of March and collected 26,041 total signatures within hours. A petition that has more than 25.000 signatories is automatically considered by the president.

The petition was intended to “draw attention to the harm caused by the gambling industry to the Ukrainian Army and Ukrainian Society”.

In the evening of 2 April, the Ukrainian president announced a new plan to restrict online gambling. The president then instructed the authorities to prepare conditions for “tighter control” of the online gambling sector in the country. He said that this was done to “protect the interests of society”.

Opposition against KRAIL, the Ukraine gambling regulator

Since more than one year, there has been an ongoing opposition to the way Ukraine’s gaming industry is regulated.

Mykhailo Federorov, the Deputy Premier of Bulgaria in May 2023 submitted a law proposal that KRAIL should be disbanded and replaced by a new executive authority. Fedorov cited the regulator’s failure to grant gambling licenses on time.

KRAIL is a colllegial organization consisting of six members and a chairperson. Five members must be present for the meeting to count.

After the invasion of the Russian armed forces, however, some members of the commission were called up for military service. It was impossible for KRAIL to hold meetings, and regulatory work including the issuance of licences were delayed.

Proposed law No 9256d: Reforming Ukraine’s regulatory system

In today’s Rada vote, 272 legislators voted in favor of the original bill that Deputy Premier Fedorov submitted in 2023. It must now pass the second reading, and be signed into law by President.

Other measures, such as the dissolution of Ukraine’s regulator are also aimed at further restricting gaming in Ukraine. The measures will also include an advertising ban, tools for protecting vulnerable groups of people, and further control.

Online gambling was officially prohibited in Ukraine from 2009 until July 2020. According to a Telegram post by the chairman of the parliamentary finance committee, Danylo Hetmantsev, gambling businesses in Ukraine paid UAH2.2bn (PS45.0m/EUR52.0m/$56.0m) in taxes for 2024. The previous year, UAH10.4bn was paid in taxes.

In the past, the Ukrainian government had tried to crack down on illegal gambling. The Economic Security Bureau of Ukraine confiscated UAH700m earlier this year from a leading gambling operator who refused to be named for tax evasion. The Bureau is expected to be more targeted than ever before.

Next for Ukraine’s gambling?

Alina Plyushch of the Kyiv law firm Sayenko Kharenko spoke to iGB about current conditions.

She said that gambling is a risky industry, and online casinos are no exception. This is particularly relevant to the military during wartime.

It is difficult to determine the true impact of online casino on society.

Since the Russian invasion on a large scale, every new draft of law has been a dilemma. Every change to the legal framework must be balanced in order to protect both the military and the economic interests.

It will however be difficult to find effective methods of banning online casinos in the country if and when this is necessary.

Plyushch said, “We do not believe it’s as hard to prohibit people from playing in physical casinos than it is for them to play online.” The restriction of online casino access requires an extensive consideration of possible ways to avoid.

After KRAIL was disbanded, the regulatory role will be handed over to the ministry of digital transformation. Plyushch had predicted this earlier in the month. Now, it is a fact.

Plyushch said: “It is most likely that the regulator will be disbanded and its temporary functions transferred to the Digital Transformation Ministry. The decision is subject to a future government announcement on the establishment of a regulator within the Digital Transformation Ministry.

Another possibility would be that the Digital Transformation Ministry retains the regulatory functions for the industry.

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