Ukraine’s gambling operators are facing a range of possible tax rates once the government approves its new market structure.
Earlier this month, Ukraine’s Verkhovna Rada parliament approved the first of three required readings of the latest proposal to authorize land-based and online gambling operations. But the draft of this new legislation lacked any specifics on the level of tax that licensed operators would be required to remit to the government.
This weekend, Ukraine’s parliament revealed the existence of four competing drafts of new gambling tax proposals intended on replacing the current Tax Code, which imposes an 18% rate on all forms of gambling revenue. Bill 2713 calls for this rate to be reduced to 10% for all verticals, although the Dentons international law firm noted that the tax rate for online poker went unspecified.
Rival drafts offer more complicated tax structures, including one that calls for a blanket 25% rate on all products. At the other end of the spectrum, another draft would exempt operators from any tax on their revenue, based on the view that the license fees – which will cost $23.4m for a five-year bookmaking permit – are already too high.
Another draft would tax sports betting revenue (both online and land-based) at 7.5%, while online casinos and land-based slots would pay 12.5% and lotteries get stuck with a 22% rate. None of the competing proposals have yet been scheduled for a vote in parliament.
UKRAINE LAND-BASED CRACKDOWN CONTINUES
Ukraine’s original gambling legislation was voted down at its first reading in December, which prompted President Volodymyr Zelensky to order a crackdown on land-based slots operators who don’t want to “play by traditional rules.”
Last week, bookmaker FavBet felt compelled to issue a statement denying that its offices had been raided by Ukrainian authorities. FavBet blamed these reports on “Russian companies that do not meet the norms” of the new legislative requirements and therefore sought the “discrediting” of FavBet’s reputation, given its support of Ukraine’s regulatory update.
Ukraine’s crackdown also contributed to the cancellation of the Ukraine Poker Open, which was scheduled to get underway in Kiev on January 26. On January 21, organizers announced the event was off but promised to provide new dates for the event within two weeks.
The cancellation followed Ukrainian authorities shutting down the Full House poker club in Kiev and seizing all its poker equipment. Ukraine currently allows poker halls to host ‘sports poker’ but not cash games, and the latter activity was reportedly the target of the authorities.
The All-Ukrainian Federation of Sports Poker has scheduled a press conference for Thursday (30) to discuss “Hunting for Sports Poker; Where Are Police Bluffing?” In attendance will be Maryan Zablodsky, who sits on the parliamentary committee on finance, tax and customs policy and who co-authored the main tax legislation cited above.