New Ukraine Bill Draws Allegations Of Rule-Bending For Lotteries

November 21, 2023
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Ukraine’s parliament is debating draft Bill 10101, which some claim could allow national lottery operators to run casinos, bookmaking and slot operations at significantly lower costs than those imposed by the current licensing system. 
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Ukraine’s parliament is debating draft Bill 10101, which some claim could allow national lottery operators to run casinos, bookmaking and slot operations at significantly lower costs than those imposed by the current licensing system.

Earlier this month, the parliament’s Committee on Finance, Taxation and Customs Policy approved the proposed legislation, paving the way for further legislative work by the country’s lawmakers.

The committee that evaluated the draft bill, which was submitted by a group of lawmakers and entitled “On amendments to certain laws of Ukraine to improve legislation in the field of organising and operating gambling and state lotteries”, is headed by Danil Getmantsev, an MP for the ruling Servant of the People party. 

Local media claim the draft bill contains a loophole that could allow lottery operators to run any type of gambling operations, including casinos, slot halls and bookmakers, by rebranding them as lotteries.

In the Ukrainian market, local companies MSL and the Ukrainian National Lottery currently benefit from the status of national lotteries. 

Following the draft bill’s submission to the parliament, local news site RBC-Ukraine reported that Getmantsev’s involvement in the proposal could potentially constitute a conflict of interest. 

In a 2019 interview with local business daily Ekonomicheskaya Pravda, the politician admitted he had begun his career as a lawyer working at MSL, and at some point became a minor shareholder in the company. 

“MSL can be called my professional cradle. I was formed there as a lawyer, and my views on the gambling business were formed,” Getmantsev said.

After leaving the lottery operator, Getmantsev continued to represent MSL while working at a law firm he co-owned named Jurimex. He later sold his 3 percent stake in MSL to his business partner, and his 50 percent stake in Jurimex to a relative, he said.

In the same interview, the MP declared that, concerning the lottery sector, he believes he has “a certain conflict of interest” and, for this reason, he does “not want to deal with this issue” as part of his activities in parliament.

Under the draft bill’s provision, national lotteries will be charged a fee of about UAH18.8m (US$520,000) per year before the first contest to distribute licences takes place. The fees are pegged to the country’s minimum wage, which is set at the level of UAH6,700 for 2023.

Critics say the law will allow lottery operators to offer an array of gambling services for this one fee, under the guise of lottery operations.

In comparison, the Commission for the Regulation of Gambling and Lotteries (KRAIL) currently awards bookmaking licences for a fee of UAH120.6m annually. 

A licence to operate a casino in the country’s capital Kyiv is priced at UAH80.4m per year, and in other locations at UAH40.2m annually, according to 2023 figures from the regulator.

Ukraine’s licensed gambling sector operates under the provisions of the nation’s gambling law, which was signed by the country’s president, Volodymyr Zelenskyy, in August 2022.

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