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Ukrainian gambling: latest news

On 21 December 2020 the Cabinet of MInisters of Ukraine (Ed.: the highest state executive authority in Ukraine) had approved the License conditions for activities in the sphere of organising and conducting gambling ("License conditions"). The mentioned conditions are approved on the basis and in accordance with the adopted earlier Law "On State Regulation of Organising and Conducting Gambling" ("Gambling Law").

Let's go through the Gambling Law briefly.

It was adopted on 14 July 2020 and re-legalised the gambling activities in Ukraine after their ban in 2009. Under the Gambling Law, it is required to obtain a license to provide any of the following gambling activities (gambling license) in Ukraine:
a) land-based casino operations;
b) betting (both online and offline);
c) slot machines halls (slot machines are allowed both in casinos and special slot machines halls (under a separate license);
d) online casino;
e) online poker.

For B2B operations, such as supply of software (RNG, software that determines game results, collects data, platform software, software that forms a part of operator's online gambling system, etc.) a special license for supply of services is required.

For each type of the gambling activities a separate license should be obtained, there are no general licenses or something similar.

Gambling equipment and some premises should also be licensed, namely license (equipment license) is required:
a) for each casino game table and roulette table;
b) for each betting shop opened under the betting license;
c) for each slot machine.

Horse race betting is allowed in Ukraine and under the Gambling Act the corresponding license may be issued solely for horse race tracks.

The Law provides a special possibility for investors who plan to build at least 150-rooms (200-rooms for Kyiv) hotel in Ukraine, namely they may obtain so-called investor license and open a casino without obtaining a land-based casino license.

The Gambling Law allows both local and foreign investors to have access to Ukrainian gambling market, but only legal entities registered in Ukraine may operate on the local gambling market and become licensed operators.

The Gambling Law establishes general requirements for operators and for each of the gambling licenses, such as the minimum share capital required, responsible gambling standards and applicable policies. There are also certain restrictions to operators set out in the Law, namely they shall not be controlled or owned (shareholding and ultimate beneficial shareholding (UBO)) by a Russian resident. Neither their shareholders or UBO should be registered in countries blacklisted by the Financial Action Task Force (FATF).

The License conditions supplement the Gambling Law and regulate the issues of obtaining the gambling license and corresponding requirements for operators in more details, namely they refer to
(a) general obligations;
(b) organisational requirements;
(c) required logistic resources and supplies;
(d) qualified personnel requirements;
(e) economic and financial requirements for each type of the license.

Here is a succinct resume of the main license conditions and requirements for each type of gambling license under the License requirements:

Some major requirements are mostly the same for all types of gambling licenses and include the following:
(a) to the moment of submitting the application for the license the share capital of the future organiser shall be fully contributed:
1) the minimum share capital required is 30 millions of hryvnia (UAH) that is equal to USD 1.05 million / GBP 780,000 / EUR 863,000,
2) the minimum share capital shall be contributed in monetary assets, the share capital that exceeds the minimum required amount may be contributed also in securities, equity and other assets;
(b) to obtain the license the applicant shall submit to the Gamling Regulation Commision:
1) certified copies of statutory documents;
2) documents that confirm the source of funds contributed to the share capital;
3) documents that confirm that the applicant (and its shareholders and UBOs) personally or through third persons does not control, including holding any part of the share capital of any Russian entity or entity registered in countries blacklisted by FATF;
(c) the gambling equipment used by the operator shall correspond to Ukrainian and international standards and be licensed as required by Gambling Law;
(d) within the license period the gambling operator shall adhere to the following organisational requirements:
1) a gambling operator shall create the rules of the gambling operator that regulates the procedure of determination of game results, calculations and payment of winnings, interactions between the operator and the players that should be included to the game of chance rules ;
2) a gambling operator shall record in its online gambling system that is connected with State online gambling monitoring system all the operations required by law;
3) keep records of winnings, the value of which is constantly growing and depends on the number of bets (cumulative or progressive jackpot);
4) take all necessary measures to prevent the payment of winnings or their equivalents, refund of bets to any third party (except the cases of request for refund of bets made by a minor or a person with limited civil capacity, or a person entered in the Register of persons with gambling problems to the legal representatives of the mentioned persons);
(e) the qualified personnel of the operator shall correspond with the following requirements:
1) be at least 21 years of age;
2) managers and chief accountants shall have an impeccable business reputation;
3) managers and chief accountants shall not be Russian citizens.

In respect of land-based casino operator the following special conditions will apply:
(a) land-based casino shall have a surface area of at least 500 square meters;
(b) there must at least 50 employees;
(c) the operator shall ensure that all the surface of the gaming area (except toilets) is covered by the security cameras footage and there are no blind spots;
(d) the operator is prohibited from:
1) hosting within the land-based casino premises any banks or credit institutions, ATMs, currency exchange bureaus, pawn shops;
2) offering or providing players free of charge or as a reward for gambling with alcoholic beverages, beer, soft drinks or tobacco products or property, possession or disposal of which requires obtaining permits or licenses;
(e) in the case when the operator failed to ensure impossibility of access by person entered into the Register of persons with gambling problems to the casino premises, such an operator shall fully reimburse to such a person or its relatives upon his/her/their request all the losses of the player tenfold.

For online casino operator, as well as for the land-based casino operator apply the following obligations:
(a) in the case when the operator failed to ensure impossibility of access by person entered into the Register of persons with gambling problems to the casino premises, such an operator shall fully reimburse to such a person or its relatives upon his/her/their request all the losses of the player tenfold;
(b) it is prohibited to provide credits or installments for bets from players, accept bets with subsequent payment from the players, accept bets in dept (credit);
(c) it is prohibited to organize and provide poker games and poker tournaments as well as games that have characteristics of the lottery and accept bets for the results of the lottery.

Unfortunately, there is no legal translation to English of the mentioned above acts, you can familiarize yourself with the up-to-date versions of the acts (in Ukrainian) under the following links:
https://bit.ly/2XB8npT
https://bit.ly/2XBlUhn