Tottenham Report: Ukrainian gambling industry fights for its peacetime future

Tottenham Report: Ukrainian gambling industry fights for its peacetime future

  • Hannah Gannagé-Stewart, CDC Gaming Reports
August 1, 2022 2:00 PM
  • Hannah Gannagé-Stewart, CDC Gaming Reports

Ukraine has been at war with Russia for five long months. Shortly after the conflict began, the gambling industry rallied around colleagues in the country. Some businesses worked to relocate those they could whisk away from the horrors of war. Others sent money. Some even took up arms and joined the fight. 

Industry-backed campaigns were established within days to raise money for the war effort and millions of displaced refugees.  

The international industry continues to support Ukraine. Just last week, the French national lottery operator, Française des Jeux (FDJ), donated €200,000 ($203,552) to support Ukrainian refugees in France.  

In a blog post from 1 June, Igor Petrenko, a doctor of political sciences at Kyiv’s Taras Shevchenko National University, wrote about how the regulated industry is backing the country as the conflict rages on. 

“The Vbet company launched the ‘We Care Fund’ initiative, which collects funds for humanitarian aid to Ukraine. Deductions for the fund are made for every spin and bet in the live casino, as well as for activity in other games in which the We Care Fund logo will appear”, he explained. He adds that Vbet has pledged to continue the fund in peacetime to help rebuild Ukraine.  

Cosmolot, he continues, was thanked by the Ministry of Defense of Ukraine for direct assistance to the front. “The company also supports volunteer projects that help the equipment of the Armed Forces and affected families with children in the Kyiv region”, he says. 

“So, as we can see, the legal organisers of gambling games in Ukraine, both online and land-based, make a lot of efforts to save jobs, support the army, and attract their customers to help the Armed Forces. Of course, not everything can be done — in particular, not all jobs can be saved — but what has already been done is an urgent and important help to the country.” 

Ukraine is a key player in the European gambling market, particularly in its role as a supplier to the industry farther afield. However, its domestic regulated market is very new. 

It was only on 14 July 2020 that the Ukrainian legislature, the Verkhovna Rada, passed Bill 2285-D, which legalised and regulated online gambling, bookmaking, and land-based casinos in Ukraine. 

One of the first operators to be licensed was Kyiv-founded Parimatch. The sportsbook has been a loudly defiant voice from the start, sending money to support the war effort almost immediately and setting the tone for other Ukrainian businesses in the industry. “We stay in Ukraine. We work here and we want to be here”, a Parimatch statement read shortly after war was declared on 24 February. 

The Ukrainian Gaming Council (UGC) was established shortly after the industry was legalised. It claims to represent 80% of the legal gambling market in Ukraine.  

The UGC too has taken a defiant stance in the face of the armed conflict. Contacted days after the war broke out, UGC chairman Anton Kuchukhidze told me: “All operators, and UGC, try to help the army in different ways: from money support to media activities”. 

However, while remaining steadfastly patriotic, as the conflict has continued, the UGC’s narrative has turned more to the business of gambling and its role in supporting a Ukrainian victory. 

Today, Kuchukhidze blogged about the industry’s resilience. “Despite the challenging economic situation and unfavourable business conditions, legal gambling operators continue to work, pay license fees, and provide whatever help they can to the state in its war against Russia”, he writes. 

He highlights the efforts being made to preserve profitable industries across Ukraine. “After all, any saved economy sector in wartime is a source of additional budget revenues for post-war restoration”, he points out. 

As such, he flags the recent decision by the Commission for Regulation of Gambling and Lotteries to draft legislation to keep licensed gambling operators in Ukraine. The initiative suspends the need for license renewals for the period of martial law, leaving renewals for peacetime.  

Kuchukhidze says the initiative is “crucial”, as it allows legal operators to defer license fees during martial law, subject to the application for a license suspension. During martial law, gambling operators are exempt from license termination due to non-payment of license fees. They will have a month after the end of martial law to pay license fees or have their licenses revoked. 

“This initiative allows legal operators [to] officially suspend their activities and not bear legal and financial risks. Such synergy between business and the state indicates a high level of trust between the sector and the regulator, achieved in just two years of the legal gambling market.  

“Such a regulator’s approach also indicates a deep understanding of business needs and the fact that legal gambling will bring tens of millions of dollars in budget revenue”, he writes. 

Ukraine faces an uphill struggle in all aspects of life as long as this conflict persists. However, it’s clear that as well as fierce patriotic defiance against Russia’s attack on the nation’s sovereignty, Ukraine has a pragmatic strategy to keep the nation as strong as possible to rebuild in peacetime.  

This unwavering commitment to a life beyond the conflict is perhaps what galvanises Ukrainians as they continue to endure it.  

The UGC’s deputy chairman for communications, Viktoriya Zakrevskaya, articulated it best when she wrote last month about the enormous sums donated to the humanitarian effort by gambling regulators. “Such high social activity of legal gambling representatives proves that gambling companies see their future in our country, believe in Ukraine’s victory, and do everything to bring it closer.”