All current operators apply for new Ukrainian lottery licences
It’s expected that PlayCity will issue no more than three lottery licences.
Ukraine.- All three current operators – M.S.L. LLC, Ukrainian National Lottery (UNL), and PJSC Patriot – have reportedly submitted applications to enter the new Ukrainian lottery licence tender. The Ukrainian gambling regulator PlayCity had announced the tender in early December, and the application window closed on December 29.
The tender is seen as a milestone in Ukrainian gambling regulation since lotteries have been operating without licences for over 10 years since the licences previously issued by the Ministry of Finance expired in 2013–2014. Despite the re-legalisation of gambling in Ukraine in 2020, a regulatory framework was not put in place for lotteries.
It’s expected that only three licences will be granted, allowing for all of the incumbent operators to continue operating. According to the news agency Interfax-Ukraine, PlayCity’s head Hennadiy Novikov has confirmed that the current tender will not see any new operators enter the market due to legislative restrictions.
Licenses will be issued not for 10 years, but for the duration of martial law plus one year, but no more than three years.
Under the competition requirements, an applicant must have active subdivisions in every Ukrainian city with a population of more than 500,000; distribution points in every locality with a population of more than 5,000, totalling no fewer than 5,000 points of sale; a .UA domain name; an electronic betting acceptance system and at least 5,000 operational electronic betting terminals. In addition, applicants must have cumulative experience of at least three years in conducting state lotteries.
The future of lottery in Ukraine
Novikov has said that he believes the limitations of the current lottery tender should be changed in the future to allow more operators to compete. The short length of the new licences could allow that to happen within three years.
“This gives the Ministry of Digital Transformation and parliament time to revise lottery market regulation, propose new rules, and relicense the market under an updated approach with the possibility of attracting international companies,” Novikov said.
He added: “Opening the market to everyone is my personal position. I don’t know what the final decisions will be, but I believe the market should be open not only to companies with previous experience in lotteries, and not necessarily only to state-owned ones.”
As for how such a competition would be structured, Novikov said he believes that applicants should compete financially, because the state issues a limited number of licenses.
He also believes that systemic changes are needed to ensure effective oversight of operators’ activities. Lottery operators currently report to the State Treasury Service, but reports do not include instant lotteries.
“Two of the three existing operators simply installed their computers at the State Treasury: in one case a laptop, in another a desktop PC, and gave a Treasury employee the password. Once a day, the employee logs in, clicks ‘generate,’ and produces a report,” he said of the current process.
He also said he wants to see a strengthening of advertising rules for lotteries and of potential sanctions against operators
“Right now, lottery operators are not abusing advertising. We all see that. But we do not know what will happen after new licensing conditions are introduced,” Novikov warned in an interview with Interfax-Ukraine.
