Gambling Legislation Report Ukraine, Belarus and Russia

Gaming Legislation

Update Report on Gaming Legislation in Ukraine, Russia and Belarus

Ukraine

Government efforts towards the lifting of an existing gambling ban that was established in 2009 and which basically “outlawed” any kind of gambling activity in the territory of Ukraine (both land based and online) were finally successful and the “Act on the state regulation of activities related to organization and conduct of gambling” was adopted in the country’s parliament on July, 14, 2020 (“Gambling Law”). Bearing in mind that the draft of the Gambling Law that was initially presented in the parliament had more than 1500 amendment proposals, the final result is somewhat different from the initial one whereby the intention to have special gaming zones in the country remained.

As the most interesting change it can be pointed out that the Gambling Law does not limit the number of licenses that can be granted nor does it establish any type of tendering procedures. Therefore, any applicant that fulfils the set-out requirements and pays the license fee can become a gambling operator. Gambling operator can conduct the gambling activity only under one brand whereby one operator may hold more licenses, as defined under Gambling Law. Requirements relate to the obligation of the applicant to be registered in Ukraine, to hold a minimum share capital of cca. 1 mio EUR and that a shareholder, owner, ultimate beneficial owner or an executive of a Ukrainian company applicant cannot be a Russian company or citizen and must not own, directly or indirectly, any company in Russia.

Gambling license is issued by the Gambling Commission whereby the Gambling Law defines six key types of licenses: (i) land-based casinos; (ii) landbased slot machine halls; (iii) land-based hippodrome pool betting; (iv) land-based and online betting; (v) online casinos; and (vi) online poker. Rights granted under a single license cannot be sold or transferred to another entity.

Regarding the land based i.e. brick & mortar

casinos, the Gambling Law envisages an “investment license” for (i) individual projects approved by the Ukrainian Government for the gambling industry or (ii) construction of a 5-star hotel (with at least 200 rooms in Kyiv or 150 rooms in other cities) in which the casino will be situated.

Such investment license is issued for a 10-year period during which the investor/operator is exempt from paying the license fee.

In respect of online gambling or casinos, additional conditions are imposed such as the requirement that the IT equipment and systems are located in Ukraine, that the website is registered on the national domain, electronical AML/KYC requirements to be fulfilled. It is worth mentioning that licensed operators are allowed to received bets from both Ukrainian non-residents and residents. Non-licensed online gambling in the territory of Ukraine is prohibited.

Russia

In the early 2000s gambling in Russia was restricted to four gambling zones and banned from the rest of the territory, bearing in mind the reputation and the general (negative) view on games of chance by the whole community. Changes started with the introduction of an interactive bet in 2014 and created a legal basis for online betting (not casinos). The gambling act defines two types of licenses those being (i) casino license (casino, slot machines and poker) and (ii) sports betting license (betting shops and totalizators).

In contrast to gambling, which is only permitted in special “gambling” zones in Russia (primarily located outside of major cities), sports betting is generally allowed subject to licensing and other requirement being met by the betting companies.

In December 2020 a new law was adopted in Russia enhancing the current regulations on gambling and sports betting. The key novelties refer to (i) the obligation of betting operators to make payments towards national sport federations (1.5% of their quarterly turnover and not less than EUR 350.000 per quarter); (ii) introduction of a new regulator (Unified Regulator for Gambling) overseeing the abovementioned obligation towards sport federations; and (iii) introduction of a centralized accounting for betting (hub for accounting and payouts).

Future developments on the gambling market will most probably go in direction of setting up better legislative frame bearing in mind that the State Duma is considering introduction of another law in order to eliminate current loopholes in the legislation and to prevent gambling under the veil of lottery games.

In respect of e-sports the same enjoys popularity and the online bookmakers receive bets on e-sports in the same way the do for any other sport.

Online casino games stay prohibited in Russia and are not likely to be allowed in the foreseeable future. Main tool of the authorities against non-licensed online casinos remains to be the ISPs blocking.

Belarus

Gambling in Belarus is legal, whereby online part thereof is picking up after changes of legislation which occurred in 2018/2019. Belarusian law allows three types of gambling: casino games, slot machines and bookmaking whereby there is a strict licensing regime for land-based establishments. Gambling act defines the following types of licenses (i) land-based betting; (ii) land-based slot-machine halls; (iii) land-based casinos; (iv) land-based totalizator; and (v) online gambling. All types of licenses are issued for an indefinite period of time.

As of 1 April 2019, licensed brick & mortar gambling operators have the option to legally register an online casino in Belarus under the condition that they have operated in the Belarusian gambling market for at least two years prior to obtaining the online license. To this day only three operators applied for online license.

The online operators can operate under an international commercial domain (.com) provided that servers on which the information is exchanged is physically located in the Republic of Belarus. In 2020, Belarusian authorities established a single registry of all types of licenses that can be obtained within the territory of Belarus.

Offshore gambling operators are facing difficulties as of 1 April 2021 when the Resolution on changing the rules of organizing and conducting internet gambling on the territory of the Republic of Belarus has been published on the website of the Ministry of Finance and by which the grace period for these online operators expired and the same became illegal in the territory of Belarus. Non-licensed websites are being blocked without a prior warning.

Also, in 2020 the Government started preparations regarding amendment of the current AML legislative framework, which is aimed at establishing more strict regulation of the AML activities of gambling operators. Further to this and the publicly available information, no significant developments are going to be introduced into gaming law and regulation in Belarus in the near future.

DISCLAIMER: Law Firm Anđelović, Siketić & Tomić d.o.o. wish to avoid inaccuracies and, whilst every precaution has been taken to ensure that information contained in this report is accurate, no liability is accepted for errors or omissions, however caused.