As momentum builds behind government initiatives to overturn Ukraine’s 2009 ban against gambling, an upcoming event seeks to open up dialogue between the country’s lawmakers and industry experts.
The two-day conference, “Game On: Bringing Gambling Back To Ukraine,” will be held Oct. 13-14 at the Hilton Hotel Kyiv. Its organizer, Glyn Thomas, hopes it will lay the groundwork for gambling to return to Ukraine in a fair and open way.
A British expatriate who has lived in Kyiv for eight years, Thomas sees legalizing gambling as a crucial step for the country at a difficult economic time. If properly instated and regulated, he believes the industry could provide a huge boost to the economy, increase tourism, provide jobs and give back to the community.
“Ukraine has the opportunity with this event to get it right, so it could actually be one of the best gambling industries in the world,” he says. “Not only by virtue of starting afresh – it also has a background of IT companies that are involved in the gaming industry. A lot of software suppliers are based here already because of the renowned skill of the workforce.”
Ukraine’s relationship with gambling has been historically rocky. After the collapse of the Soviet Union, gambling halls popped up across the country, often in poorly constructed buildings on the outskirts of cities. When a fire in a Dnipropetrovsk gambling hall in May 2009 killed nine people, then-Prime Minister Yulia Tymoshenko suspended all gaming licenses in order to carry out health and safety inspections.
Tymoshenko stated that gambling halls “take the last money from families, which don’t have much, and corrupt young Ukrainians.” The nationwide ban came into effect soon after the fire.
Thomas said the situation wasn’t exemplary before the gambling ban, but the current legislation is similarly far from effective.
A basic internet search provides a long list of sites open to Ukrainian gamblers, although it’s unlikely that any are based in the country or, crucially, pay any tax here.
“If you wish to gamble in Ukraine now, you can,” Thomas said. “Yet it’s illegal. So what’s better: a gambling industry that’s illegal, not controlled, not paying tax and not helping the people who fall down because of bad habits? Or regulated gambling with a system in place that controls it?”
Given the continued prevalence of gambling in Ukraine, there is a strong financial argument behind ensuring that the state receives a share of the profits. Over the past few months, a series of high-profile politicians and Cabinet ministers have come out in favor of legalizing gambling. They include Economic Development and Trade Minister Aivaras Abromavicius, Odesa governor Mikhail Saakashvili, and Deputy Finance Minister Elena Makeyev.
The upcoming conference has the support of Prime Minister Arseniy Yatsenyuk, who describes legalizing gambling as “an opportunity we cannot afford to ignore.”
He will appear as a featured speaker along with Minister of Justice Pavlo Petrenko, Deputy Minister of Justice Natalia Sevostyanova, and Finance Minister Natalie Jaresko.
On Aug. 31, Jaresko stated that budgeting for the legalization of gambling was already underway and estimated that it could bring in up to $5 billion in revenue yearly to the state budget.
Thomas also has great expectations for the impact of gambling on Ukraine’s finances, but cautions that the industry must be treated fairly.
“It’s very easy to think of gambling as a cash cow for the treasury, but the government must understand that casinos and sports betting companies also have to make money to pay their wages, to advertise their services and to compete with each other,” he says. “It’s not enough just to overtax and over-penalize.”
Industry experts will present the “best-practice” approach to gambling, according to Thomas who envisions a significant element of community involvement.
“The tax revenue has to be used in the right way, which should be to rebuild hospitals, schools and help with culture and sport, paying for the Olympic teams of the future,” Thomas says.
While tax money will go to the government, Thomas believes revenue collected from license fees should be used to set up an independent gambling commission to act as the industry’s regulatory body, minimizing the risk of corruption.
“It shouldn’t be the old smash-and-grab model, they should be running proper businesses that are socially responsible. And the way to do that is to have proper enforcement which is independent of the government,” Thomas says.
“People forget that gambling is fun; it brings a different culture and form of nightlife, a bit of glamor and style,” he continues. “Most Ukrainians now have traveled abroad, they’ve witnessed what it’s like to walk into a casino, and none of them have lost their houses. Why should they be denied that here?”
Sandra MacKenzie can be reached at [email protected]
