“The real expansion of the market can start after the adoption of tax amendments”

Focus Gaming News speaks to Anton Kuchukhidze, head of the Gambling Association of Ukraine, about the present and future of the country’s market.

Exclusive interview.- Following the legalisation of gambling in Ukraine, the Gambling Association of Ukraine has been formed to represent individuals and companies in the sector. Focus Gaming News sat down with Anton Kuchukhidze, the association’s founding chair, to discuss the newly regulated Ukrainian market.

How rapidly do you expect the Ukrainian gambling market to expand following the approval of new legislation last year?

We have some issues in this aspect. First of all, it was very important for the country, business and society to legalize the gambling market. We had a corruption tiger in this sphere of the economy from 2009 to 2019: the amount of shadow gambling market in 2018, for example, cost more than $ 1 billion. Ukraine did not have profits in the state budget, the business was a part of the shadow economy, and neither society at large nor individual players did not have state protection from shadow operators.

The second aspect is the unshadowing of Ukraine’s gambling market. Today we have a positive result: state regulator has issued seven licences. We have now seven legal operators: four licences were granted for online casino operators, one for online betting and two for land casino operators. In total, more than 20 companies applied for licenses, and 13 of them are waiting for the final decisions from the regulator on their applications. So, we are at the beginning of the market’s expansion.

“It was very important for the country, business and society to legalize the gambling market.”

Anton Kuchukhidze, Head of the Gambling Association of Ukraine.

Third, a very important issue is gambling taxes. Today we have very high prices for taxes, and because of it foreign operators have not applied for licences in Ukraine yet, they are awaiting the adoption of amendments. The Verkhovna Rada (Parliament) of Ukraine promised to vote for the revised tax legislation on gambling on the week of 30 March to 2 April. However, this decision was postponed numerous times. When accepted, it will be first reading of tax draft, and can become a good signal for foreign operators, that Ukraine has chosen the way of tax reducing.

In conclusion, I can say that we only start: the government expects to achieve $ 270 million from gambling licenses this year. The real expansion of the market can start after the adoption of tax amendments, when we finally see different branches of foreign companies in Ukraine applying for licences.

Under the legislation, operators must be locally owned. To what extent will that make the Ukrainian market look different to other markets? Do you expect to see growth and innovation among Ukrainian operators?

I expect to see more than 20 local companies and more than 10 foreign companies in the near future. We have no problem with innovations, because many of Ukrainian gambling professionals have been working for a long time abroad, and they have modern understanding of legal gambling practices. And as I mentioned, decisions of foreign operators to enter Ukrainian market depend on the tax amendments.

“I expect to see more than 20 local companies and more than 10 foreign companies (in Ukraine) in the near future.”

Anton Kuchukhidze, Head of the Gambling Association of Ukraine.

What role will the Gambling Association of Ukraine play in the new gaming landscape? What are the main priorities for the new association?

The GAU has different roles:

1. We help the regulator in drafting regulations. My Association unites professionals from different spheres of gambling. I am deputy head of Expert Council of the Gambling Regulator.

2. We help different representatives from business to have effective communication with the regulator, and GAU has the opportunity to inform the regulator about some problematic issues and to help both business and regulator to find effective decisions for the gambling market. Many professionals from GAU take part in working groups of the Regulator Expert Council. So, I can be grateful to the regulator for such transparency.

3. We have also very important media function for the regulator and gambling market. We fight against shadow lobbies and their fakes. I think that legal market needs to be defended against media attacks. Also, GAU give information to the society on the benefits of legal gambling market.

Esports have a strong presence in Ukraine. What factors do you think helped make esports so strong in the country and do you expect esports to become a strong betting market?

There are some factors: in Ukraine we have a great amount of IT professionals, and they are recognised by the global community. Also, we have a great real movement of esports gamblers, and egames are very popular in our country.

And there are also two other very important factors: in September 2020 the Government recognised esports as a legally recognised type of sports, and we legalised the gambling market. So esports and betting have a legal framework to develop their mutually beneficial partnership. Frankly speaking, how this partnership will be developed, I think we will see later.