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Ukraine is preparing a sweeping digital overhaul of its gambling and lottery sector, as the Ministry of Digital Transformation seeks to pull a majority of play out of the shadow market and bring the 2020 legalisation fully into effect.
Deputy Minister of Digital Transformation Natalia Denikeieva says the reforms are designed to replace a “fragmented and outdated” system with data-driven supervision and clear rules for both operators and players. Officials estimate that as much as 60% of gambling still takes place in illegal or grey channels – a share she wants to cut roughly in half within the next year or two.
From stalled legalisation in 2020 to a new digital-first enforcement
Ukraine re-legalised gambling in 2020 under Law 768-IX, which created a framework for online casinos, betting, land-based casinos, and lotteries and established the Commission for Regulation of Gambling and Lotteries (KRAIL) as the national regulator.
However, in practice, the implementation lagged.
Earlier this year, the government dissolved KRAIL due to several reasons and shifted policy leadership to the Ministry of Digital Transformation. A new regulator, PlayCity, was created under the ministry’s umbrella to handle licensing, supervision, and enforcement across gambling and lotteries.
Denikeieva has been blunt about the starting point. In interviews with local and industry media, she has described the post-2020 regime as a set of “disparate elements that do not work together in practice”, leaving too much room for illegal operators and too little benefit for the state budget.
Licensing moves online, and real-time monitoring goes live
In the middle of this overhaul, a full digitalisation of licensing and supervision will be enforced. Instead of physical applications and subjective case-by-case decisions, PlayCity is opening an online portal with standardised forms, automated checks, and clear service levels.
Once fully rolled out, the system will collect data on stakes, payouts, game sessions, and customer behavior, giving regulators a single view of the legal market for the first time.
Denikeieva has said the first phase of the monitoring infrastructure should be in place by the end of this year, with operators integrated in stages. The goal is to use data not only to catch non-compliance but also to refine policy on issues such as product risk, advertising, and player protection.
About closing all loopholes in iGaming, especially in the lottery market
While the casino and sports-betting sectors have drawn most attention since 2020, Denikeieva argues that the lottery market has become an even bigger headache. The current framework rests on a 2012 law that left the state with limited control over licence terms, fee levels, and product design.
Government reviews found cases where operators had not paid agreed licence fees, and where products marketed as “lotteries” in practice functioned like betting games, blurring legal boundaries.
In response, the Ministry of Digital Transformation has announced plans to relaunch the national lottery under a new licence model. PlayCity is rewriting conditions to require higher upfront fees, open tenders and tighter rules on game mechanics. Officials have signalled a target of raising at least UAH 10bn (around US$240m) in new lottery revenues over the coming years, with proceeds earmarked for defence and reconstruction priorities.
Squeezing the illegal online casino market
A major strand of the reform is a sharper fight against unlicensed online casinos, which continue to target Ukrainian players from offshore hubs. PlayCity has already reported that, working with the telecoms regulator and law enforcement, it has blocked access to more than 2,500 illegal gambling websites, with a further 2,000 under review.
Denikeieva has acknowledged that blocking alone cannot stamp out illegal gambling, given the number of internet service providers and the ease of launching mirror sites. She argues instead for a sustained pressure strategy: make life progressively harder and less profitable for offshore operators while making the regulated channel safer and more attractive for consumers.
Ambitious targets, gradual change
Denikeieva is realistic about the limits of regulation. She has repeatedly said that no country has succeeded in eliminating illegal gambling entirely, and Ukraine will be no exception. Yet she believes that comprehensive legislation, real-time monitoring, digital licensing, and coordinated enforcement can decisively shift the balance.
Bringing the shadow share of the market down from an estimated 60% to around 30% in the medium term would already count as a major success, she argues, especially if the legal channel delivers predictable tax income and better player protection.
Operators who want to serve Ukrainian customers will have to do so under PlayCity’s rules, through digital licences and live reporting, or risk being cut off from local infrastructure and payment systems.
Source: Gambling Consulting Authority
