Ukraine Casino Industry Under Threat As Government Calls In Debts

March 6, 2023
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Ukrainian casinos will no longer be able to defer their licence fees and have been told they must pay any outstanding money in the next 30 days.

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Ukrainian casinos will no longer be able to defer their licence fees and have been told they must pay any outstanding amounts in the next 30 days.

Last week, the Cabinet of Ministers of Ukraine adopted amendments to Decree No. 314, according to which all legal gambling operators are deprived of the right to defer licence payments.

As determined by the amendments, gaming operators must pay any outstanding licence fees within a period of 30 days.

Licenсe payments had been delayed due to the declaration of martial law in Ukraine, and operators were able to operate legally by paying only flat taxes per each gaming table and slot machine.

In late February 2023, the Commission for the Regulation of Gambling and Lotteries reported that the Cabinet of Ministers had registered a draft amendment to the decree that would oblige legal offline operators to pay licence fees for the past and the next year.

Despite vigorous protests expressed by the industry representatives, a week later the resolution was adopted.

The decision will seriously affect Ukraine’s legal land-based casinos and slot halls, as the payments will amount to hundreds of millions of Ukrainian hryvnias (millions of US dollars) per operation, while businesses still suffer from lack of players due to wartime conditions.

Oleg Kononchuk, general director of the gaming brand Slots City, told local press that the debt of his casinos chain for two years is almost UAH180m ($4.9m), and they don’t have the money.

Representatives of the Ukrainian Gambling Council and legal gambling operators of the land-based segment sent a collective appeal to the Prime Minister of Ukraine, Denys Shmyhal, in which they ask to increase the term for paying licence debts to 180 calendar days, to reduce the cost of licences and to allow quarterly payments instead of paying one year in advance.

“Some legal gambling establishments are located in the front-line cities, and some are generally under occupation. There is no tourist flow of people necessary for the development of land-based gambling, while forced internal displacement of the population has also changed the demographic map of our state.

“There are big problems with providing electricity to the businesses, and the number of illegal venues increased dramatically at the background of the war,” Anton Kuchukhidze, head of Ukrainian Gambling Council, wrote on his Facebook page commenting on the situation.

Most operators commenting on the ministers’ decision argue it will lead to the closure of the majority of the licensed gambling operations.

Among the potential consequences are the reduction of thousands of jobs, the growth of the illegal gambling sector and a decrease in tax revenues for the budget, they say.

According to the head of the Ukrainian Gambling & Betting Association, Mykola Melnyk, the adoption of changes to Decree No. 314 is unfair for the gambling industry due to very high licence fees together with high taxes and zero investment protection.

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