Ukrainian President Volodymyr Zelenskyy has taken a bold step to overhaul the nation’s gambling industry, signing into law sweeping reforms that will dismantle the existing regulatory body, the Commission for the Regulation of Gambling and Lotteries (KRAIL), by April 1, 2025. These changes, encapsulated in Law No. 9256-d, aim to address corruption allegations and improve oversight through the creation of a new regulatory authority.
A New Era for Gambling Oversight
The legislation, approved by Ukraine’s Verkhovna Rada in December 2024, introduces a “central executive body” tasked with enforcing gambling policies. This move seeks to eliminate inefficiencies and corruption that plagued KRAIL since its inception in 2020, coinciding with the legalization of gambling in Ukraine.
The new authority will:
- Manage licensing processes.
- Implement compliance measures.
- Introduce real-time monitoring systems for gambling activities.
- Draft regulations to promote responsible gambling.
One of the significant changes includes mandatory player identification protocols and guidelines aimed at minimizing gambling addiction. These measures include limits on gambling sessions, spending caps, and enforced breaks to reduce the risks of compulsive behaviour.
Scandals and the Fall of KRAIL
KRAIL’s reputation has been marred by scandals. Notably, in 2021, a KRAIL official, Yevhen Hetman, was arrested for allegedly accepting a $90,000 bribe to issue gambling permits. More recently, Ivan Rudyi, KRAIL’s head, faced accusations of aiding a Russian-owned online casino and compromising national security by exposing sensitive data of Ukrainian military personnel.
These incidents sparked public outcry, culminating in a petition led by soldier Pavlo Petrychenko in March 2024, which gathered over 26,000 signatures in a single day. The petition demanded immediate government action to address the societal harms linked to gambling.
Stricter Controls on Advertising and Payments
The new law introduces significant restrictions to curb predatory practices in the gambling sector. Advertising will face stringent limitations, including:
- A ban on ads except during late-night broadcasts aimed at audiences over 21.
- Prohibitions on promotions involving free bonuses or credit betting.
- A crackdown on unsolicited marketing messages and calls.
Payments within the gambling industry are also undergoing reform. Transactions must now be conducted exclusively through bank accounts, effectively banning other payment methods. Companies with tax or licensing arrears will be barred from operating, while foreign entities must meet strict criteria to apply for state lottery licenses.
Digitization and Transparency: The Road Ahead
Ukraine’s Deputy Prime Minister and Minister of Digital Transformation, Mykhailo Fedorov, emphasized the importance of digitizing licensing processes and introducing an online monitoring system. According to Fedorov, these steps aim to “remove the human factor” and foster transparency and efficiency in regulatory operations.
Key aspects of the digitization plan include:
- Digital licenses to simplify application and renewal processes.
- Real-time monitoring of gambling activities to ensure compliance with the law.
- Centralized data systems to prevent fraudulent activities.
Addressing Social Concerns
The reforms reflect mounting concern over the social and economic impact of gambling. Stories of addiction, financial ruin, and broken families have dominated headlines, prompting urgent calls for reform. The law also bans companies linked to hostile nations from obtaining licenses, ensuring national security considerations are prioritized.
Restrictions extend to sponsorships, prohibiting the involvement of military personnel and public figures in gambling promotions. This measure aims to shield vulnerable groups from being targeted by aggressive marketing campaigns.
