Round table discussions with gaming industry experts held on 18 December 2020, including with Boris Baum, were optimistic that the first gaming license would be issued on or before 31 December 2020. Even though industry experts considered tax conditions to be a concern for investors, the Ukrainian parliament — The Verkhovna Rada — did not accept amendments to the tax code. Without such amendments, our round table experts felt foreign investors may be less likely to enter the Ukrainian gaming market.
In addition to online gambling legalization issues, there were question marks on its own and nobody really understood how to solve those questions. In response, the Ukrainian Gaming Commission agreed to recruit experts to the advisory council from the gaming industry who have a focus on delivering more practical information and solutions.
Ivan Rudy, the Head of UGLC, believed that if a Cabinet of Ministers approved the Gaming License Terms prepared by the hard work of the Ukrainian Gaming Commission, it would be possible to issue licenses to operators who fulfilled all necessary terms before 1 January 2021. Any operators who received gaming licenses before the end of 2020 could as well have saved up to US$2.8 Million on their license fees, since the license fee is connected to the minimum wage of the Ukraine (60.000 x minimum wage). It is expected that after the 1st of January 2021, the minimum wage of the Ukraine will increase from 4.700 Hryvnas to 6.000 Hryvnas; so a gaming license will cost 6.000 Hryvnas x 60.0000 = 360.000.000 Hryvnas, instead of 4.700 Hryvnas x 60.0000 = 282.000.000 Hryvnas.
It was clear the Ukrainian government had no interest in creating such a discount for some operators who were ready to receive the license, while it could create aggression among others who could not manage to get their license in time. In spite of the Cabinet of Ministers approving the Gaming License Terms on the 21st of December 2021, no operator managed to receive their license under the ‘old’ license fee before 31 December 2020. We can only guess the reasons for not issuing any license during 2020, including that: the government wanted to be fair to all operators; that no operator was totally ready on terms; or that the government had the intention of receiving higher value for its 2021 budget.
Today, 29 January 2021, as we complete our first month of the year, it is certain that no operator has received their license yet. Reasons could be listed as: disputes over the taxation system (some of the regulations could cause double taxation and that is not attractive for either operators or clients as it is suggested to deduct wining tax of approximately 15%); and the gaming equipment certification program (since all the equipment needs to be certified).
It has been quite difficult to receive healthy, regular information about the gaming legalization process from the beginning because of so much lobbying and political involvements. We try our best to provide up to date information to Casino Life Magazine Ukraine readers, and we appreciate how valued our hard work is.
