Legalization: “to be” or to be?

Legalization: “to be” or to be?

Ukraine is on the verge of legalizing gambling business. After a ten-year ban, the new government designated the adoption of the law as one of the priority areas of its activities. What is the status of the issue today?

The discussion on the legalization of the gambling business has been underway almost since its ban in 2009. In different years, this issue was actively discussed or put into sleep mode. Over the past five years, several bills have been registered in Parliament, among the key ones are “On casino activities”, “On lotteries”, “On bookmaking activities”, and “On de-shadowing of the gambling market and providing the state budget with revenues to fulfill social obligations”. Moreover, in 2018, the authorities promised the IMF to legalize all gambling activities in order to replenish the budget with additional funds. None of the bills was supported, and IMF promises then were put in the piggy box with the inscription "unfulfilled."

However, in June 2019, President of Ukraine Volodymyr Zelensky charged the Cabinet of Ministers with developing a bill until October 1 on the legalization of gambling business and the Verkhovna Rada of Ukraine with adopting the document until December 1, 2019.

The systemic supporter of the gambling business legalization was Oleksandr Danyliuk, who was dismissed from the post of secretary of the National Security and Defense Council on September 30. Heading the Finance Ministry in the government of Volodymyr Groysman, he tried in every possible way to create conditions for legalizing the gambling business, but the document remained in the ministerial offices. Not long ago, he again noticed that the gambling business in Ukraine, which is currently "in the shadow" with a billionth turnover, must be legalized, and that Parliament has every opportunity to resolve this as soon as possible.

A few days ago, Finance Minister of Ukraine Oksana Markarova, representing the draft budget for 2020 in parliament, said that the bill on the legalization of gambling business is the priority issue, since its adoption would allow replenishing the state budget with a significant additional resource.

The abolition of the ban on gambling business and the liberalization of the economy as a whole are actively supported by the potentially largest players in the Ukrainian betting market: the International Betting Company PariMatch Holding and the company Favorit Sport. Both companies said they were ready to take responsibility for assistance in promoting sports in Ukraine.

What is the position of business representatives now? Do they monitor the situation?

CEO of the International Betting Company PariMatch Holding, Sergey Portnov, when commenting on this issue to Ukrinform said: “We are pleased that effective modern regulatory standards will be created at the legislative level on the Ukrainian market, which will introduce clear, balanced rules for market players, the state and consumers. PariMatch is interested in and supports the adoption of a systematic liberal law that can create equal and transparent conditions for all market participants. Due to many years of wide international experience, our knowledge and expertise can be useful in an open dialogue between lawmakers, lawyers, experts and other participants in the process. We are as open as possible to this dialogue. "

Communications Director at Favorit Sport, Kateryna Mashevska has said that the main goal of the bill is “to bring the industry in line with the European standards and attract additional funds to the state budget. The bill will create conditions for developing our market, new jobs, attracting foreign investments. Creating transparent conditions and openness to cooperation is the leitmotif of the current government and we welcome such initiatives.

Gambling business is a high-tech business. The legalization of gambling business in Ukraine will provide an opportunity to develop gambling industry in Ukraine, which is actually "Blue Ocean" for the state. "

Gambling and betting industries in the countries with adequate, civilized legislation are one of the main partners of the state in implementing sports and charity projects. State funds are created, which are financed by betting companies, and inclusive projects work using these resources. The new law on the legalization of gambling business in Ukraine, first of all, should be a partner for the state and business. It should include transparent, clear standards that create conditions for those companies willing to work comprehensively, strategically. At the same time, it must completely block the activities of those who work "in the shade."

On September 30, when representing the Government’s Action Program, Prime Minister Oleksiy Honcharuk announced that the Cabinet of Ministers would submit a bill on the legalization of gambling business to the Verkhovna Rada.

"We want slot machines to disappear from streets, so the government has developed a bill following the president’s order. We voted for it yesterday and it will be tabled in Parliament soon, today or tomorrow. The bill is aimed at removing the gambling halls and slot machines from streets," Honcharuk said, noting that that gambling in Ukraine would be available only at hotels, and the issue of lotteries was being regulated separately.

The prime minister said he expected that the legalization of gambling business would replenish the state budget with UAH 2-2.5 billion. “Speaking about the revenue side of the budget, we expect to receive about UAH 2-2.5 billion into the budget from the legalization of the gambling business. But we still need make more calculations and understand what law will be adopted.

As we see, both experts and the prime minister agree that Ukraine needs a transparent law, as well as a process, which will form clear and liberal rules for all market participants. The state has all the opportunities to get the necessary expertise to develop a balanced law. Have lawmakers considered this? We will find out very soon. The text of the bill has not yet been published on the website of the Verkhovna Rada.

Lesia Didkovska, Kyiv

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