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Ukrainian President Volodymyr Zelenskyy has signed a bill that would establish a new state agency to regulate the gambling industry and implement policy. This announcement follows the dissolution of the former regulatory body that was accused of multiple counts of corruption and ties to Russian-owned online casinos.
The Commission for the Regulation of Gambling and Lotteries (KRAIL) will replaced by the new State Agency of Ukraine PlayCity, with Cabinet of Ministers representative Taras Melnychuk confirming the decision via a Telegram message last week.
PlayCity would regulate both online casinos and lotteries and will be under the direct supervision of the Cabinet through the Deputy Prime Minister for Innovation, Education, Science, and Technology Development, Mykhailo Fedorov. It would also be housed in the same building used by KRAIL, which is set to formally liquidate by April 1.
In a strategic effort to ensure continuity, PlayCity will utilize the 2025 budget initially allocated to KRAIL, amounting to UAH 160.4 million. However, UAH 14.3 million of this budget has been redirected to the Ministry of Transformation to kickstart the new agency’s operations.
KRAIL was Plagued with Scandals
The Commission for the Regulation of Gambling and Lotteries (KRAIL) was established in 2020 following the legalization of gaming in Ukraine. However, its tenure has been marred by significant scandals that have raised concerns about corruption and national security.
Barely a year after its founding, Yevhen Hetman, a KRAIL official, was arrested by anti-corruption authorities for allegedly accepting a bribe of $90,000 to approve gambling permits.
Another scandal hit the body a year later in 2022, with the Ukrainian National News Agency (UNN) reporting that the commission had granted a gambling license to Your Betting Company, LLC, which was reported to be a front for 1xbet, a popular Russian gambling brand. Even with the mounting evidence and public concerns regarding its affiliations, KRAIL failed to investigate or revoke the license at the time.
The most concerning of all came last year when KRAIL head Ivan Rudyi was detained amid serious allegations that his connections to a Russian online casino compromised national security. Reports indicated that Rudyi’s actions may have allowed access to sensitive personal data of Ukrainian military personnel by Russian individuals, further deepening concerns about KRAIL’s regulatory effectiveness.
However, government officials believe that the new regime will lead to a more transparent and accountable gaming market. Speaking to reporters, Ukrainian Deputy Prime Minister Mykhailo Fedorov said, “The essence of the law is to reorganize the KRAIL and remove the human factor from the license issuance process.”
Stricter Gambling Restrictions Introduced
In addition to the complete overhaul of the gambling regulatory body, the new bill signed by President Zelensky has also seen several new restrictions introduced.
Gambling advertisements in Ukraine are now restricted to late-night television and radio programming aimed specifically at audiences over the age of 21. Additionally, operators are prohibited from offering promotions that include free bonuses and are no longer allowed to contact players through unsolicited calls or messages.
Furthermore, there are now serious limitations on sponsorships, with public figures, including artists and military personnel, now banned from promoting gambling operators.
The new legislation also introduces tighter requirements for issuing licenses. Foreign operations are still allowed to submit applications, but those linked to hostile environments would be automatically rejected. Companies with licensing or tax issues will also be prohibited from acquiring a license.
With multiple departments now overviewing the new regulator PlayCity, this marks a pivotal shift towards a more regulated an secure gaming environment in Ukraine.
Source: Next.io
