Obviously, Legislation Is Quite Beneficial to the State: Expert at Alfaleads Affiliate Network. Part 2

Obviously, Legislation Is Quite Beneficial to the State: Expert at Alfaleads Affiliate Network. Part 2

Since June 2019, President of Ukraine Volodymyr Zelenskyy has been making definite statements supporting legalization of gambling business in the country. On September 2, during the meeting with Cabinet ministers, Verkhovna Rada, and law enforcement officials, he specified the exact terms of preparation, introduction (until October 1), and adoption (until December 1, 2019) of the bill.

We talked to affiliate marketing experts in order to find out their attitude towards the new bill. You can examine views of Nicc Lewis (founder and CEO at Expozive) and Roman Bout (founder of Quints) in the previous material.

Meet the expert opinion of a representative of the Alfaleads affiliate network. The specialist analyzes benefits from loyal legislation through the example of the Belarusian market as well as examines the legislation issue from the perspective of advertisers and arbitrage experts.

“Obviously, legislation is quite beneficial to the state”

We suggest that gambling legalization in Ukraine can follow the Belarusian scenario. While Russia imposed severe restrictions for the gambling industry, Belarus seized the chance. Therefore, the latter receives quite good revenues from casinos. In the past year, the country’s budget was supplemented by 23 million dollars due to gambling business taxes and by 17 million dollars due to physical entity taxes.

The events developed there in the following way: when the Russian Federation closed casinos, the Belarusian authorities decided to attract Russian players and their money to their country. They elaborated the industry control laws and tools as well as established the special computer cash system (SCCS). The majority of venues are located in the capital of Belarus, Minsk.

Recently, the law permitting the online gambling activity has become effective after the transitional period. Besides, Belarusian players can easily play in offshore online casinos until 2021. Thus, it is obvious that legalization is quite beneficial to the state, and it is possible to organize this procedure at the appropriate political will.

Let’s get back to Ukraine and to the most critical issue: legalization terms. It's not all that obvious, and we are not going to predict anything regarding this matter. The authorities will require years to change fundamentally the gambling regulation system.

“It is reasonable to place gambling zones in depressed regions of the country in order to help the local budget”

In the context of tourist development, it is economically-viable to establish gambling zones similar to Russia, in popular resort regions such as Sochi or Kaliningrad. Moreover, it is reasonable to place gambling zones in depressed regions of the country in order to help the local budget and provide new jobs to the population.

However, we believe that Ukraine will implement another concept, at least according to policymakers. Casinos will be likely placed in Kyiv-based major and luxurious hotels, and there will be no gambling zones in less-developed regions because of enormous investments.

“Licensed operators will have to ensure a fair gaming process, information confidentiality, and payment security”

In our opinion, bills should necessarily include Responsible Gambling principles. It means that licensed operators will have to ensure a fair gaming process, information confidentiality, payment security, and so on. Surely, it is also referred to age restrictions and certain rules of casino advertising. Gambling venues in most countries are obliged to comply with these very rules.

Another question: how will these aspects be implemented in practice? How will these mechanisms be performed and controlled? We are not sure that it is totally possible within our realia.

“Gambling business legalization will be profitable to casinos and betting shops, but it is an ambivalent situation for arbitrage experts”

As a CPA network, we would like to comment on the online gambling issue. It seems to us that gambling business legalization will be pretty beneficial to advertisers, online casinos and betting shops. Having licenses, they will be able to show them on Google or Yandex and generate traffic using the search. It can be accomplished independently or involving large advertising agencies.

At the same time, it will be an ambivalent situation for arbitrage experts. On the one hand, there will be no need to cloak and farm accounts (work will be much easier from a technical point of view). On the other hand, the competition on the Ukrainian market will be as huge as traffic cost (cost per click/install) will increase several times.

“Corruption and tax avoidance won’t allow the sector to become entirely transparent”

If the authorities conduct the legalization procedure properly and taking into account the mistakes of neighboring countries, it will definitely encourage operators to come out of the shadow. Nevertheless, experience has proven that everything is much complicated in reality. Corruption and tax avoidance won’t allow the sector to become entirely transparent. Some part of it will remain in the shadow, or owners will shift their businesses to other regions.

Turning to online gambling: the fact is that many arbitrage specialists generate casino traffic without licenses at their own risk. The reason is the difference in hidden income, which is crucial to the majority. Unlicensed casinos have a particular audience vulnerable to manipulations, thus a lot of arbitrage experts prefer to work with it.

Certainly, the whole market is currently moving towards legal business, teams are becoming public, companies are providing more transparent services, but it is not the immediate shift, it is a long and difficult process.

On September 26, the panel discussion titled ‘Casino, betting, esports: Finding the right balance’ will also focus on the legalization issue and its impact on the market.


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