SBC Summit: A balance of regulation & tax is required in the Ukrainian market

Ievgeniia Derbal, chief legal officer at Parimatch, believes that a balance between regulations and taxations should be reached within Ukrainian gambling market. 

Speaking on the first day of the SBC Digital Summit: CIS, Derbal partook in the panel ‘Welcome to Ukraine’, sponsored by 4H Agency, which looked at how international operators evaluate Ukraine as a new market following President Volodymyrs’ decison to permit the legalisation of regulated gambling in the country.

“When entering new markets we consider numerous opportunities and requirements in terms of the product limitation, advertising limitation, requirements of the technical software, anti-fraud… and of course, taxation which is really important for us.” noted Derbal.

“A balance between the regulations and the taxation should be reached. We did our internal research in terms of the regulation and taxation in European countries, and many others. 

“We came to the conclusion that the state either provides the current level of the licence fee or the level of taxation.”

Joining Derbal on the panel was Ilya Machavariani, senior partner at 4H Agency and an independent consultant to the Ukraine government, who lauded the Ukrainian legislation to be considered ‘one of the best’ among CIS countries.

He explained: “The reason for that is because of the intention from the Ukrainian government to create a transparent market in which we welcome international operators to the country. 

“I think, at the moment, Ukraine has succeeded in sending a signal to the international community that the country is welcoming, the regulations will be created on par/to the best international examples in Europe and I think that this is the most important thing that I think the country could communicate, aside from the legislation.”

The conversation moved forward with Boris Baum, deputy head of the president’s office, who highlighted the issue with licence fees and the need for the country to implement gross gaming revenue. 

He stated: “Right now the parliament committee has approved the GGR on the amount of five per cent for the betting, ten per cent for the online casino, 12.5 per cent for the slot operators and ten per cent for the lotteries and there are no taxations on the winnings.

“This is part of the first votes and will be amended before the second and third round.

“In my personal opinion, the triple licence fee creates the entrance barrier and I’m not happy with this. I think, the quicker the commission will be able to introduce the online monitoring system the better the market will work. I would like to have the licence fee, as it is mentioned, and GGR introduced because the market is growing and the government should benefit from an increased market by charging GGR from the operators instead of the fixed licence fee.”

Echoing Baum’s thoughts, Derbal stated: “It’s a really difficult question and the compromise needs to be made here. I think the government has already decided to put this triple licence fee for the first two years, meaning the government needs time to implement this online monitoring system and learn how to calculate the GGR. 

“Our understanding is that the government was about decreasing the calculation on GGR and introducing a zero rate for this transitional period.”

SBC Digital Summit CIS (4 – 5 November 2020) is the leading virtual conference and exhibition for the betting and gaming industry in the CIS, Ukraine and Georgia. It features more than 70 expert speakers sharing insights and ideas about the future of markets across the region, with all 18 conference sessions available both live and on-demand. 

Delegates can also enjoy a programme of networking roundtables and an interactive product display area showcasing the latest industry innovations. Click here to register for your free pass.