CI: Maybe it’s a move to simplify the licensing, keeping it to hotels? AP: I think it may be because it was promised to people there would be no gambling on the street, it would all be limited to the hotels. So the stakeholders are abiding by this promise, quite strictly, with everything in hotels.

CI: Why no gambling on the street? AP: There was a problem before 2008/2009, with slot machines everywhere – on underground stations, in every shop, children were gambling – hence the ban.

CI: Was the ban effective, or was it like other bans we have seen in Eastern Europe where it is a ban in name only? DH: That’s complicated. From one hand, you see way less annoying ads on the street. On the other hand, there were still the so-called ‘electronic lottery shops’, where people can play slots on something similar to virtual lottery terminals. But ‘no gaming on the street’, this was just in lottery shops, and there were quite a few of them around. Hundreds in Kyiv alone, with just computers in for people to play on.

CI: It sounds like the definition of lottery is quite an important thing in Ukrainian gaming… AP: Yes it is. If needed, you could find a way to call almost any game a lottery. There was electronic lottery, there was a sports lottery – that’s what sports betting became, essentially. You could bet on any sport event, but it was a sports lottery.

CI: Are we about to see an actual lottery the way we understand it in the rest of the world, and all other aspects of gaming under the new law? DH: There may be a problem or conflict with excluding lotteries from this one gambling law; there will be proper slot machines, proper sports betting, but something will remain and be called lottery… There are likely to be disputes about what is a lottery and what is a slot machine, and which license they need. That’s why it’s not a great idea to exclude lottery from the new law.

CI: What are the licensing requirements for someone calling themselves a lottery then, or a gaming parlour that is full of these machines? AP: The licensing requirements are similar to those set out to conventional gambling operators. The lottery operator shall have a share capital of at least 1million and its management shall have an impeccable business reputation (that relates to AML/FT concerns). What is different is a limited number of lottery licenses to be issued — three licenses only. Getting a license requires having at least three years’ experience in running ‘state lotteries’. They are defined as lotteries run under the Ukrainian State Lotteries Law… To cut the legal jargon short, it is likely that foreign lottery operators are going to have a hard time entering the Ukrainian market. The old State Lotteries Law is not very good in general and is open to manipulation.

AUGUST 2020 31

CI: In terms of major population centres, is anyone anticipating the number of venues that might take up these licenses? Is there any projection as to how many operators the market can sustain? DH: We have calculated that in relation to five-star hotels for casinos, but I don’t believe anyone has made such an estimate in relation to slot halls because the number of venues that could host such an operation is so much greater. It’s also presently unclear what makes a three-star hotel or a four-star hotel in the country; so we expect the hotel owners to ‘star-play’.

CI: How many five-star hotels are anticipated to take this forward then? Do the hotels have to be of a certain size? DH: There are not many in the country that would have the facilities to host this – it is also dependent on the number of rooms in the hotel, it must have at least 150 rooms. For casinos outside Kiev, it’s 100 rooms. I would estimate 15-20 hotels are this size. AP: The idea is also that if you build a five-star hotel, you won’t have to pay any license fee for ten years, so it’s an incentive to build five-star hotels, and an incentive for foreign investment.

CI: What’s the next step? AP: The president has signed the Law; after it is published, it’s official. Then a gaming authority needs to be created, as it’s a completely new body. Then they will prepare licensing conditions and technical regulations for equipment and specifications for operators. All of this will be in the subordinate legislation; there are no detailed requirements in the law, only general ones. Specific requirements will be in these documents.

Peter Hermes Furian/Adobe Stock

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