Ukraine Gambling Council supports KRAIL against calls for disbandment

Some MPs and media outlets have accused the Ukrainian gambling regulator of failing in its duties.

Ukraine.- Trade body the Ukraine Gambling Council (UGC) has given its support to the country’s gambling regulator amid criticism from MPs and the media. Some are calling for the Commission for the Regulation of Gambling and Lotteries (KRAIL) to be disbanded for failing in its duties to protect Ukraine during Russia’s invasion of the country.

Mikhail Fedorov, Ukraine’s minister for digital transformation, called on the Ukrainian parliament, the Verkhovna Rada, to transfer KRAIL’s duties to his ministry. His call comes after the regulator’s expert policy council was broken up earlier in the year in the wake of reports by media outlet OSINT that found that its leader Boris Baum had personal interests for the Tvoya Betting Company to have obtained a KRAIL licence.

Worse still, Tvoya Betting is accused of being backed by the Kremlin and used for money laundering. Baum has reportedly fled to Cyprus and denies allegations of corruption.

Fedorov said: “Is KRAIL needed? Everything can be done online. We are auditing its processes and will soon offer a strategy for how to replace the commission as a digital service.”

However, UGC chairman Anton Kuchukhidze said the trade body would not support calls to disband the regulator. He said that Fedorov’s proposal entailed “fundamental changes or transformations” in the sector and that Ukraine could not afford to play “bureaucratic games behind-the-scenes to determine licensing for the industry”.

He said: “You need to understand that shifting the issuance of licenses online will not solve numerous problems faced by the state, namely preventing gambling addiction, fighting against illegal operators. Moreover, I believe that the idea of fully computerising​​ the issuance of licenses will open the doors for companies established by the Russian aggressor, which will be able to enter the Ukrainian market and steal our citizens’ personal data and money.”

He also noted that the government has yet to sanction its State Online Monitoring System (DSOM) for the supervision of gambling.

He added: “Any move to put the market under new conditions and postpone urgent tax issues will only complicate life for legal business, while illegal business will grow. In turn, I would like to emphasise again that the UGC is ready for extensive dialogue on the necessary public decisions to develop the gambling industry.

“We are always open to all state bodies and willing to provide our analytics and contribute to the development of our industry. I am personally convinced that only by joint efforts we can get an effective result that will benefit the state.”

KRAIL has reported that its revenue from licence fees in the 10 months to October reached UAH856.5m (€23.5m). The regulator’s cost to the state budget during that time was UAH79.7m, 9.3 per cent of its revenue.

For full-year 2021, KRAIL reported revenue of UAH1.58bn, with UAH125.5m spent on it (7.9 per cent of revenue). That means that for the whole period from January 2021 until the end of last month, fees surpassed expenses by 91.6 per cent, with revenue totalling UAH2.44bn.

The figures come towards the end of a year that has been marred by Russia’s invasion of Ukraine, which started in February. In October, the acting director of KRAIL, Olena Vodolashko, said that the “isolation of Russia in the gambling sphere” is the key priority for her commission.