Ukrainian online casino licences to cost just £500k under new draft law

Online casino operators will pay just €624,000 (£500,000) for a Ukrainian licence under a draft gambling bill passed for a second parliamentary reading, EGR can reveal.

Bill 2285-D successfully moved to a second reading in Ukrainian parliament Verkhovna Rada by the Committee on Finance, Tax and Customs Policy last week following a month-long debate.

However, the committee has made several unpublished amendments to the bill ahead of its second reading by Ukrainian legislators.

Under an amended version of the bill seen by EGR, sports betting operators will pay €2.8m (£2.5m) for a five-year Ukrainian licence, while online poker licences will cost just €160,000 (£142,000).

B2B operators will also be required to apply for a licence to operate in the country under the bill, with a licence fee set at €48,000 for five years.

These licence fees represent a significant departure from those levied in the bill, which passed a first reading in January. Under that version of the bill, an online sports betting licence would have cost €21.6m (£18.4m) while online casino licences would have been €11.5m for a five-year permit.

In the case of both online casino and online sports betting, licence fees will reduce substantially once the Ukranian government launches its online real-time monitoring system for player bets, deposits and winnings.

The draft legislation includes a timescale of a minimum of two years for this to occur and operators will then have a minimum of six months to connect to the system.

Online casino licence fees will reduce to €208,000 (£185,000) thereafter, while sports betting licence fees will decrease to €960,000 (£850,000). Licence fees for online poker will remain unchanged.

EGR can reveal that in all cases, prospective Ukrainian licensees will be able to accept both Ukranian and non-Ukrainian players under their licences. The bill also confirms that betting on virtual sports and lottery betting will be prohibited.

To qualify for a licence, corporate entities must be legally incorporated within Ukraine and operating with share capital of no less than €1.1m.

Ukraine is also planning to create a gambling regulator within two months of the passage of the bill into law.

EGR can reveal that operator taxation rates, which will be prepared and incorporated separately to the draft law, will come into force as soon as the online monitoring system goes live.

Ilya Machavariani, head of CIS gambling practice at international law firm Dentons, hailed the reduced fee structure as proof the Ukrainian government had listened to industry stakeholders that high licence fees would create an “unsustainable” market.

“However, I have a feeling that it is still too early to come to any conclusions. First, I doubt that we have already seen everything that could stall the law going forward – there is definitely a bumpy road ahead,” Machavariani said.

“Second, I am also a bit concerned with the subsequent legislation as the devil is in the detail and the quality of the subsequent legislation might change the mood from optimistic to neutral, to say the least,” he added.