Why do gambling facilities in Ukraine remain in the shadows?

In Ukraine, the gambling industry is constantly facing problems that complicate its development and make the business less attractive for players and operators. Many gambling facilities in Ukraine operate underground, and news about searches and exposure of illegal gamblers are not leaving the news feeds. Why does this happen and what are the reasons for these problems?

  • Tax burden: The taxation system for gambling is not optimally defined. Players, even if they win, are obliged to pay 18% personal income tax (PIT) and 1.5% military duty. As a result, a player may end up with less money than he or she deposited. In addition, even a simple withdrawal of money from the account is already considered a win and is subject to taxation.
  • License fee: Gambling entrepreneurs are forced to pay triple the annual license fee. This creates an additional financial barrier to entry and encourages labor in the underground sector.
  • Commission for the Regulation of Gambling and Lotteries (CRGL):The resolution of issues related to the issuance of licenses and regulation of the industry often encounters problems in the work of the CRGL. This commission periodically loses its quorum, and decisions on granting licenses can be delayed indefinitely.

Of course, these problems create difficulties for the development of the legal gambling industry in Ukraine. Many entrepreneurs believe that these problems could be solved by the draft law 2713-D, which deals with the taxation of gambling. However, this draft law has been stalled in the parliament for two years now.

As for the CRGL, the government is considering dissolving the commission as one of the ways to solve the problems with licensing and regulation of the industry.

Overall, transparent and optimal gambling regulation in Ukraine remains an important task to ensure player safety and attract more investment in the sector. Addressing these issues can significantly improve the industry and ensure its sustainable development.

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