Gambling Business in Ukraine: Where Could Casinos Operate and What Are Their Benefits?

Gambling Business in Ukraine: Where Could Casinos Operate and What Are Their Benefits?

Following the adoption of the law on gambling business regulation in Ukraine, 20 casinos will be supposedly established. What the conditions for establishing gambling platforms will be? How will the establishment of gambling venues affect the economy, tourism, and other sectors? These issues are revealed in the article.

What hotels will allow casinos?

According to Bill No. 2285, Ukraine will issue 20 licenses permitting gambling in land-based casinos. Each document gives the right to set up a single gambling house.

The draft law stresses that casinos could be placed only in the territory of five-star hotels. One of the key conditions will be the number of rooms:

  • 200+ for Kyiv-based hotels;

  • 150+ for hotels in other cities.

The minimum area of premises for land-based casinos should be 500 sq. m.

Besides, the bill specifies that operators will be able to install slot machine halls at hotels. One offers to grant 150 certificates of opening such venues. It is expected that slot machine clubs will be placed in three-, four-, and five-star hotels. Besides, they could operate in hotels with at least 200 rooms in Kyiv and at least 150 rooms in other cities.

Given the fact that gambling houses are permitted in three- to five-star hotels, major cities seem to be the most promising for gambling business development.

The register of certificates of the Ministry of Economic Development, Trade and Agriculture notes that 265 hotels in Ukraine have from one to five stars. 38 of them are five-star. They are located in different parts of the country: Kyiv, Odesa, Kharkiv, Dnipro, Lviv, and other cities. However, not all hotels of the highest category correspond to the casino establishment requirements. It is known that more than 200 rooms can be found in such Kyiv-based hotels as Fairmont Grand Hotel, Hyatt Regency, Hilton Kyiv, etc.

The register includes 150 three- and four-star hotels. Ramada Encore Kyiv, Ukraine, and other hotels meet the room requirements as of today.

It is still unknown when the gambling legalization law will be approved. Davyd Arakhamiya, the head of the Servant of the People faction, predicts that the Verkhovna Rada of Ukraine will pass the corresponding bill in the first reading by the end of 2019.

Currently, there are various opinions as to when businesses will start operating legally. Daniil Monin, an expert at the Ukrainian Institute for the Future, pays attention to the fact that one has not yet developed the online monitoring system where all operators should connect their gambling equipment. He stresses that gambling organizers will fail to work legally until this system is launched.

Prospects of gambling business legalization

Prospects of gambling business legalization

Gambling businesses were banned in Ukraine in 2009. Therefore, the gambling market withdrew into the shadows, while the state budget started losing billions of UAH that could go to the treasury from gambling and betting operators.

It is assumed that gambling market legalization will open new prospects for entrepreneurial activity, encourage the development of regions, as well as positively affect the economy, travel industry, and social sector.

Impact of casino legalization on the local economy and anti-corruption

The Government of Ukraine expects that gambling legalization will provide the state treasury with additional funds.

Oleksiy Honcharuk, Prime Minister of Ukraine, hopes that the country will develop a civilized gambling business system to be subject to tax. Moreover, he emphasizes that the state budget can obtain more than 3 billion UAH due to the operations of gambling venues.

Oksana Markarova, Minister of Finance of Ukraine, says that revenues from gambling legalization can reach 5-9 billion UAH.

It is anticipated that the final sum of income will depend on the version of the law approved by MPs. Nowadays, there is one core bill developed by the Government of Ukraine and seven alternatives.

Iryna Sergienko, Head of the Ukrainian Gaming Industry Association (UGIA), states that corruption is a frequent phenomenon in this segment because the gambling sector is beyond the law. The expert believes that the corruption element can be reduced if the gambling activity is regulated.

On December 18, Iryna will be involved in the round table at Kyiv iGaming Affiliate Conference. Together with other experts, she will discuss the advantages of gambling legalization in Ukraine.

How will gambling regulation affect the attraction of foreign investments?

The explanatory memorandum to the basic bill specifies that the suggested approach to gambling regulation will allow Ukraine to get extra investments.

Foreign entrepreneurs are expected to establish new hotels in the country, encouraging the hotel business growth. They will also be able to invest in the advancement of gambling technologies.

Allegedly, the adoption of the law will attract foreign gambling operators to the gambling market. Nevertheless, some specialists hold that certain provisions of the bill will keep foreign gambling and betting companies from starting operations in Ukraine. This is the opinion of Borys Kushniruk, chairman of the expert analytical council of the Ukrainian Analytical Center.

Impact of gambling legalization on tourism

Before the introduction of the gambling regulation bill, Ukrainian President Volodymyr Zelensky said that the establishment of casinos in five-star hotels would result in the evolution of the tourism cluster on the Black Sea coast.

Games of chance are considered to be illegal in many countries as of today. Thus, local citizens go to other states where this kind of entertainment is legal. For example, Georgia often meets citizens of Turkey where gambling is banned.

It is anticipated that casino legalization in Ukraine will improve the travel industry and allure foreign travelers to the country. This will positively affect the economy.

Impact of gambling legalization on the social sphere and labor market

Impact of gambling legalization

The primary bill on gambling business legalization suggests that Ukraine will create the Foundation for healthcare, sports, and culture support. Its proceeds will be generated by issuing gambling licenses.

The document prescribes that money transferred to the foundation will be spent on the following goals:

  • establishment of new hospitals, rehabilitation centers, hospices, and specialized centers;

  • financing of education, retraining, and skills upgrading of medical staff;

  • support of mass, children’s, and reserve sports, as well as disabled and veteran sports;

  • building of the sports infrastructure, culture and education facilities;

  • financing of programs aimed at enhancing the culture and mental level of the population, etc.

Moreover, experts suppose that the establishment of new gambling venues will create thousands of new jobs.

Relevant gambling regulation bills will be discussed at Kyiv iGaming Affiliate Conference on December 18. The event will examine the prospects of gambling legalization and its opportunities for businesses.

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