UKRAINE
experience shows that effective regulation can often be achieved using simpler instruments or a combination of simpler, and therefore more effective, tools. For example, taking the technical regulation and certification of technological solutions used by operators, especially in the online segment. Currently, Ukraine lacks a technical regulatory framework and clear requirements for software and other tools used by operators. This gap essentially prevents real oversight of how operations are conducted. Therefore, even a powerful system capable of processing large data volumes will not ensure transparency if there is no confidence that the data is collected and processed in a consistent way that prevents manipulation — something which is all but impossible to ensure without proper technical regulation. Issues regarding the taxation of gambling operators also remain unresolved. The draft law, which was expected to clearly and transparently define the procedure for taxation in the gambling sector has been actively discussed in the Ukrainian Parliament since 2020, but has not yet been adopted. The minor changes that have been made to tax legislation over the period have failed to establish a comprehensive, fair, and understandable taxation regime for gambling operators. The new regulator, drawing on the successful experience of the Ministry of Digital Transformation in initiating new laws, is clearly capable of acting as a moderator in shaping and implementing tax reform for the gambling sector through new legislative proposals. Challenges arising from the conditions of military aggression Since the start of military aggression, the Commission for the Regulation of Gambling and Lotteries has annulled the licenses of several operators found to be connected with Russia. As a result, both the public and the state have called for a cleansing of the gambling market, which remains particularly vulnerable to money laundering and other illicit financial activities. This demand remains highly relevant,
placing the responsibility on the new regulator to reform the licensing process and prevent operators connected to Russia from entering Ukraine’s gambling market. The Ministry of Digital Transformation has also tasked the new regulator with simplifying the licensing process to minimize the risk of corruption. One proposed measure is the maximum automation of the licensing procedure, reducing human involvement in decision-making. While this approach could effectively address corruption concerns, it is important to ensure that comprehensive due diligence remains a priority. A superficial or overly simplified evaluation process could allow operators to take advantage of automated licensing to conceal their true ownership and intentions. Furthermore, global trends in gambling regulation indicate a shift towards stricter licensing requirements and extended review periods to prevent undesirable entities from entering the market, driven by the broader international effort to combat money laundering and ensure market transparency. Developments in the lottery market Unlike the gambling market, Ukraine’s lottery market has seen little change since 2020 and remains largely unregulated due to the government’s failure to approve licensing conditions. Until April 1, 2025, the Ukrainian law on state lotteries included a provision that effectively prevented new operators from entering the market. The Ministry of Digital Transformation is expected to develop and submit licensing conditions for lottery operators and define the procedure for conducting license competitions. This
will enable foreign companies with experience of operating lotteries in other jurisdictions to participate. The entry of such operators
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IMGL MAGAZINE | JUNE
2025
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