One year after being legalized, gambling has brought more than Hr 1 billion ($37 million) to the state budget, Ukraine’s Gambling and Lottery Regulation Commission reported on Aug. 10.
This is less than a quarter of the Hr 4.4 billion the industry was expected to bring in during its first year of legal operation.
Gambling was outlawed in 2009, driving it underground. Shadow gaming venues disguised as lottery offices and internet cafes thrived, costing the state budget roughly $10 billion every year. Gambling was legalized again in August 2020.
Half of the gaming budget revenues for the past year will fund healthcare, education, sports, culture and science. The other half will be poured into local budgets where the casinos are based.
Legalization came with numerous logistical challenges and restrictions. Gambling establishments are only permitted in five-star hotels, special recreation zones outside city limits or in specially approved buildings.
To open a casino, businesses have to buy a license valid for five years. Costs vary depending on the city and type of building.
The Ukrainian government’s licensing fees are the highest in the world — it costs up to $2 million to open a casino in a 150-room hotel.
On top of high licensing fees, operators pay 18% income tax as any other business, but also the gross gambling tax, which varies from 10% to 28% for different types of gaming.
The tax load oscillates from 28% to 46%, which adds up to 22% of each employee’s income.
Even so, Ukraine’s gambling regulations are intended to keep the market from being overcome with corruption schemes and seedy establishments.
