Ukraine bill signed into law as questions remain over regulator and tax
President Volodymyr Zelensky approves bill 2285-D with Verkhovna Rada to address outstanding tax and regulatory issues on autumn return
Ukrainian president Volodymyr Zelensky has ignited the process to legalise and regulate online gambling and sports betting after signing bill 2285-D into law.
Under the current legislative process, the bill has been passed back to the Ukrainian parliament, the Verkhovna Rada, in its current guise, without any presidential amendments.
This comes despite operators and industry stakeholders highlighting unanswered questions within the legislation, namely the taxation treatment of operators and the status of the new Ukrainian gambling regulator.
During the bill passage process, several questions were raised over whether the taxation of operators would be on a GGR basis or a turnover basis.
In addition, the development of a unified financial platform to process bets was also mooted, subject to a two-year timescale for completion.
Finally, the question of whether the new regulatory entity should be formed by special commission of the Ukrainian government has still to be answered, having been suggested prior to the summer.
The Verkhovna Rada is currently on its summer recess and will return to full parliamentary session in September, at which time it will begin preparing amendments to be introduced to the bill to deal with the taxation and regulatory issues.
Speculating on when we could potentially see clarity on tax rates, Dentons associate Ilya Machavariani said the new system could be ready by the end of September.
“The monitoring system is trickier as it’ll depend on what model they choose in the end; if it is going to be a straightforward model with regulator connected to each and every operator or a SAFE model (similar to the one already employed in certain European jurisdictions),” Machavariani explained.
“I hope that the latter model will be the one chosen as it will take less time to get it up and running, but nothing is clear at this point,” he added.
CIS-centric sports betting operator Parimatch welcomed the Ukrainian government’s commitment to online casino and sports betting.
“We are fully committed to conquering our home market by delivering a product that can entertain the people of Ukraine,” a spokesperson for Parimatch said.
“However, for us to deliver these benefits in the long term, we need a fairer tax system. It is currently too punitive and uncompetitive compared to similar international markets.
“It is vital that this is addressed as soon as possible to ensure the enduring viability of the industry in Ukraine,” the spokesperson added.