This alert ("Alert") is intended to provide a brief overview of the outline of the gambling regulations in Ukraine, which are soon to be introduced together with the lifting of an existing gambling ban that was established in 2009.
This Alert is based on the existing draft of the Ukrainian gaming law ("Draft Law") that is yet to be officially adopted.
PLEASE BE ADVISED THAT THE CONCLUSIONS MADE IN THIS ALERT MAY CHANGE UPON THE ADOPTION OF THE FINAL VERSION OF THE DRAFT LAW.
The Draft Law provides for the following eight areas that will become regulated upon adoption of the Draft Law:
- Land-based casinos;
- Online casinos;
- Land-based sports betting;
- Online sports betting;
- Slot machine halls;
- Land-based poker at poker clubs;
- Online poker; 8. Lotteries.
Each activity should be carried out on the basis of the respective license, issued by the Ukrainian gaming regulator (which is yet to be created) ("Regulator") to the gambling organizer ("Operator") for a certain amount of time.
The Draft Law establishes 10 types of licenses that may be obtained for the purposes of carrying out the activities mentioned above.
The list of activities and corresponding licenses can be found in Annex 1 to this Alert.
HOW TO OBTAIN A LICENSE
The Draft Law establishes that the number of issued licenses will be limited (details about the limitations established by the Draft Law may be found in Annex 2 to this Alert).
A license can be obtained in two consecutive steps:
- Participation in an electronic auction ("Auction") that will be held by the Regulator; and
- Application for a license (provided that the applicant has won the Auction).
The Draft Law provides that detailed regulations governing Auction proceedings will be adopted later by the Regulator.
However, it is still possible to draw the following conclusions on the basis of the Draft Law:
- As of now, there are no limitations for entities participating in Auctions; the Draft Law also directly provides that participation of non-Ukrainian legal entities is allowed;
- Auction participants must pay a guarantee fee (the Draft Law establishes that the regulations of such guarantee fee should be adopted together with the rules of Auction adopted by the Regulator);
- Results of the Auction should determine the annual payment for the specific license;
- The Draft Law establishes starting bid prices for each type of license (but the Regulator is entitled to increase the starting bid price).
Application for a license
After the end of the Auction, the participating entity is entitled to apply for a license, provided that the applicant (i.e. the entity that will be the Operator upon obtaining a license) is in compliance with the requirements that are established for Operators by the Draft Law, inter alia:
- Legal entity that is applying for a license should be incorporated and act under the laws of Ukraine;
- The amount of the applying entity's charter capital at the moment of application should be no less than 30,000,000 hryvnia (approx. EUR 1,100,000);
- Charter capital of the applicant
should be paid in cash; it is forbidden to use for the payment of
charter capital funds that are:
- from the budget;
- secured by mortgage; or
- of unknown origin.
Together with the application for a license, the applicant should provide the following documents and information, inter alia:
- Information about the UBO of the applicant;
- Information about the amount of the charter capital and the date of completion of its formation – please note that the Draft Law establishes that the formation of the charter capital should be confirmed by an independent auditor;
- Documents confirming the origin of the funds used for the payment of charter capital;
- Information about the brand of the Operator1 – please note that the Draft Law establishes that only one brand may be used under one license;
- Information and documents confirming rights to domain names (for online licenses);
- Information and documents confirming rights to software (for online licenses);
- Documents confirming that the applicant is controlled by the winner of the Auction (if the winner of the Auction is a non-Ukrainian entity);
- Other standard documents and information – confirming the absence of criminal liability of the management of the applicant, extracts from the relevant registers etc.
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