Ukraine does not leave headlines of world news since February 2022, when russian troops outrageously invaded a sovereign state in the very center of Europe. After Ukraine managed not only to withstand the invasion, but also to regain control over about 40% of the territories initially captured, talks have started about the post-war development of the country and investment opportunities inevitably coming along with that.
Among the most promising industries which are expected to rapidly grow, gaming industry is definitely a leading one. Ukraine officially legalized gaming back in 2020. Since then, the newly-established Gambling and Lottery Commission granted more than 100 licenses for running casinos, online betting, poker, and other activities. Importantly, an average term of processing the documents and granting the license did not exceed just 10-15 days.
Even the ongoing war did not completely disrupt this business. At the toughest times, 80% of gaming services providers were forced to temporarily shut down their businesses due to safety reasons. The industry has now recovered for up to 72% of the pre-war period. As on 24 February 2022, there were 8 casinos at the major hotels and 52 slot machine halls in Ukraine. Today we have 7 casinos and 45 slot machine halls, 9 of which have been relocated from the regions of the country most affected by the military action.
Even in these circumstances, about 10 new licenses were granted in 2022. This fact gives rise to a cautious optimism regarding the future of gaming in Ukraine in 2023 and onwards.
Ukrainian government is set to make this industry even more investment-friendly. In particular, the Ministry of Digital Transformation recently announced that they are working on the new legislation and technical solutions automatizing the licensing process. A company applying for a license will have to upload a package of documents online, and if those satisfy the established criteria – a license will be granted automatically. That said, such procedure would be fully transparent and eliminate any corruption risks.
In addition to improvement of the licensing regime, contemplated amendments are meant to completely revisit the approach to administering of taxes paid by gaming services providers. GGR is to be administered through the automatic system, and the respective taxes are to be written-off from the accounts automatically. This would relieve the businesses from excessive paperwork and make their interaction with tax authorities much rare and less painful.
What should be taken into account when considering entry to Ukrainian market is that there should be no russian entities or individuals in the corporate structure. Otherwise, it would be impossible to get the license, or it would be revoked if the regulator uncovers a connection to russia later on.
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