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higher than some guy down the road who is selling some of the same product? AP: It will depend mainly on the position taken by the gaming authority in interpreting gambling and lottery laws and if they choose to enforce it. DH: If there is a political will to enforce restrictions as drafted, things will happen.

We know about plans to issue licenses as soon as possible, and we are expecting the first licensing issues in autumn this year. They need some revenue in the state budget as there is a deficit, they expect to receive them this year. The number of licenses is potentially unlimited – depending on the gambling vertical in question, you just need a three- to five-star hotel. There will also be online casino licenses, also unlimited.

CI: I was coming to online casino licenses… Will that be linked to having a land-based casino license? AP: We already have online gaming in reality, but they are not presently paying taxes and do not have a license – we don’t have any active enforcement in relation to online casinos. I think they just decided that it would be better to receive some license fees and taxes in the future. No need to have a land-based casino, just a local entity and a license.

CI: Are most of the companies in the space as it stands Ukrainian or foreign? AP: No. It’s full of foreign companies. Ukrainian companies are doing the same thing offline, but as lotteries, as we already explained. Foreign companies, especially publicly traded ones, will be looking to have an entity incorporated into Ukraine because you need to have a local entity, and to obtain a license, and be lawfully present. We are seeing interest from outside companies. DH: The initial license fees talked about were enormous, with a fee of US$2m-$5m for an online casino license. Now it is more like $200k per year; and of course people would want two licenses, one for online casino and one for online sports betting. Any website would realistically want to operate both of those things.

CI: Say for example Wynn or one of the mega- operators looks at developing in Ukraine – surely it would be discouraging to outside investment if they look to commit money to a building project, but ‘lotteries’ are still working the way they are today? Why would they commit to a license or a building project if their overheads for acceptance are much

32 AUGUST 2020

CI: It’s interesting how you say the licenses will be available at the end of the year – that would be a very quick turnaround. AP: It’s expected that licenses will be issued this year and there has already been press coverage explaining that some hotels are planning to apply. In Kharkiv there are five-star hotels and they have already declared the intention to have casinos there; in Kyiv, some are already making plans too. Casino operators and hotel owners are discussing joint ventures, there is demand for casinos in the country and we believe it will be very profitable. DH: Some hotel operators said back in January that

they would be looking at renovations in order to be first to open when it was possible. Some serious money was engaged months before the second and final draft law was on the table.

Alina Plyushch

Partner, head of Gambling Desk at Sayenko Kharenko

Alina has been

engaged in gambling legalisation matters since 2014 and she has vast experience in advising industry representative on Ukrainian gambling market issues.

Alina is a solicitor of the Senior Courts of

England and Wales.

Dmytro Hotsyn Associate, member of Gambling Desk at Sayenko Kharenko

Dmytro also regularly advises corporate clients and individuals on issues arising out of Ukrainian gambling issues.

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