The legalization of online gambling in Ukraine

[Robbiebilliams]

 Good day, dear readers of our blog. On the agenda is terrible - lawmakers in UA got to our forest, so to speak. In the first reading, the Verkhovna Rada adopted a bill (roughly a draft of the law), which has every chance of becoming a law.
 

Everything would be fine, only the provisions of the future law are worn by some; In short, one point has turned the entire progressive bill into schizophrenia.

But before we discuss what happened, let me tell you about what casino licenses are. I know that they will tell me now that they themselves know what licenses a casino has. And I know that you, dear readers, know this. But I will tell you a little on the other hand, not from the side of the player, and not even from the side of the casino owner, but from the side of the law.

So, from the point of view of licensing, all casinos and bookmakers are divided into three groups. Relatively speaking, they can be called as: unlicensed, licensed, regulated.

Unlicensed

Everything is simple here. These are sites offering gambling and not having a license, or hiding it. Not always an unlicensed casino or a bookmaker office means script washing. A classic example is Bovada, the largest casino and bookmaker operating in the North American market (the one whose name and logo was stolen by Wavada). First of all, in the USA. They don’t need a license simply because for the USA any license is a filkin letter if the operator decides to accept US players. Well, a license of some island state can probably be obtained, but it’s good to work with the USA ... It's about walking naked, but with a tie. Yes, it can be a little prettier, but it does not fundamentally change the situation.

Licensed

This is conditionally saying “gray market”. Not black, but not white. In terms of law, licensed casinos are both legal and illegal at the same time. Each state has its own point of view on the license, depending on whether citizens of the given state are allowed to play, and how the domestic law of the state relates to this.

There are a lot of different “gray” licenses. We will not list everything. We indicate only the three most basic ones.

1. Maltese
2. Curacao
3. The free port of Kagayan

The first two licenses faced absolutely all of our readers. The third license is a gambling license of a free economic zone in the Philippines. It is very widely used in Asian gambling markets. But we practically do not encounter it.

All of these licenses have one thing in common. They provide an opportunity to "invade" the jurisdiction of foreign states. Including those who, to put it mildly, do not at least see gambling. From the point of view of such states, such licenses are illegal.

Also, these three licenses differ in the degree of “caution”. The most “cautious” is Maltese. The Maltese license generally does not allow the invasion of the jurisdiction of states with their own regulated market. So to say not to create conflict. Especially if the state belongs to the conditional "Western bloc." And here is a very delicate moment, the Maltese lawmakers are looking at who can be “beaten”, and who aren’t.

Sites with MGA, for example, do not accept players from Spain or Italy, as these countries have their own domestic market. And Malta is not profitable to conflict with them. But Poland is accepted. Although from the point of view of Polish law this is not legal, but Poland seems to be scored from the point of view of Malta. Poland does not have a regulated domestic market; money is not particularly shared.

As for France, it’s exactly in the casino that there is no internal regulation. It is simply forbidden, as is the case with Poland. But here is a purely life principle. France is a powerful country, in many respects influencing the economy of Malta, it is not necessary to conflict with it. Therefore, France does not accept MGA. And Poland and God be with her, not really the state that Malta fears. Sometimes the Maltese license even clogs to the domestic markets of other states, say the regulated Russian market of bookmakers, continuing to compete with it.

Curacao is much less tied to European affairs, which is why the choice of jurisdictions is wider there. Casinos flying the flag of Curacao invade the regulated markets of Italy, Spain and other regulated countries.

The Philippines license is about the same. Basically, it serves as a cover for pseudo-legal gambling operations in the markets of Southeast Asia and China. These countries did not say that they were too happy about this fact. Especially the PRC, whose special services periodically try to get in one way or another in the PRC and imprison those who carry out illegal gambling operations from the territory of the Philippines.

Adjustable

Regulated markets are the same licenses, but which prohibit intruding into other jurisdictions. Having received a regulated license, a gambling site can only accept players from the country whose regulatory authority issued this license.

Regulated markets are formally considered “white” markets; other states cannot formally have claims against operators of regulated markets. If, only the operator does not work under several licenses. But a formally regulated license is issued only to a local legal entity.

What is going on in Ukraine?

In Ukraine, the first reading of the bill, allowing the issuance of licenses for online casinos, to work in Ukraine. And we are talking about issuing those very “regulated” licenses and creating a regulated Ukrainian online gambling market.

What are the conditions for obtaining a Ukrainian license for an online casino?

If the law is adopted in its current form, there will be several conditions. The main condition is the price of the license.

The price of a license to work in Ukraine for an online casino will be in terms of US dollars: $ 2,361,500 / ANNUALLY!

And this is just a license fee. In addition to it, you will have to pay all the relevant royalties by providers and payment systems, and from the remaining pay taxes. Apart from any non-official payments, from which, as we all understand, no one is safe.

I think it is unlikely that anyone will argue that in UA they won’t even sell licenses to anyone for $ 2,361,500. To a good person - they will sell it. They’re not very good at being checked for communications with the aggressor state. So the bill prescribes. Everything else is the tales of the Vienna Woods.

But even if without the tales of the Vienna Woods, starting from official figures only. The indicated amount is very high. This is almost twice the price of the UKGC regulated UK license. Despite the fact that the average income from the British and Ukrainian players is, to put it mildly, different.

It would seem, why such difficulties, why such appetites? I think everything is extremely simple. High entry barrier - a classic scheme for creating a monopoly or semi-monopoly market, divided between one or more formally different operators. When there are only a few players in the de facto market, the price of a license of $ 2,361,500 turns from extremely high to extremely low.

In addition to online casinos, separate licenses for offline casinos will also be sold. That is, we can get the so-called “Bulgarian Variant” in Ukraine, when both offline and online casinos will belong to virtually one operator or one group of people.

In addition, license holders receive the exclusive right to purchase advertising in the media.

With very high probability, everything goes precisely to this scenario. With the sauce of withdrawing the gambling business from the shadows, there will be a cleansing from the mass of small competitors and the consolidation of all Ukrainian offline and online in the hands of one or more players.

What will this mean for Ukrainian players?

First of all, the protection of Ukrainian players from various kinds of fraud will increase, this is certainly a plus. But at the same time, for players from UA the possibility of choice will be sharply reduced. As soon as regulated gambling in Ukraine takes effect, it is very likely that all brands with an MGA license will abandon the Ukrainian players. Curacao is likely to be able to accept players from UA, but again, with a very high probability, Ukrainian Internet providers will be obliged to block casinos that accept players from Ukraine, but without a Ukrainian license. With the same high probability it will be more problematic to make payments in favor of unlicensed casinos.

A self-exclusion system in regulated casinos will naturally work. And that is a plus. The downside is that information on the deposits and withdrawals of each player will be available to the state, which may mean problems for people with unofficial incomes that are much higher than official ones. Casinos flying the flag of Curacao do not share such information with the Ukrainian or Russian authorities.

Our blog will monitor further developments in the legalization of online gambling in Ukraine.

Thanks for attention. In fact, we ourselves still have a lot of questions about what happened, and we will be glad to hear your comments.

[Yuri]

Man, to be honest, i got nothing against it, i do consider it a normal thing, if you can't control yourself and go on to lose all of your money, than you are guilty for it. I can't actually say that i am a great gambler, yet i like it, i can control myself, and i don't let myself go. My parents are from Ukraine, i have never been there, but i can say that i'm kind of a patriot, despite the fact that i have never been there, i'd really like one day to move back to Ukraine together with my parents. But about our subject, i really hope that they will legalize at least online gambling, also, i know that in Mother Russia, it is also forbidden, even though i don't understand why. During the last couple of years i have been playing a lot on gambling sites, especially the video slot websites not blocked by gamstop. I don't see anything negative in gambling, hope it will be okay in Ukraine.