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Ukraine blocks access to 32 online gambling websites

The Ukrainian national commission for state regulation of communication and informatization (NKRZI) last Friday asked the internet service providers to block the access to 32 gambling websites.

According to the Ukrainian news magazine kyivpost, the decision taken by order of the Special Investigation Directorate of the Security Service of Ukraine was based on a judicial decision by the district court in Kiev.

The press service of the Security Service of Ukraine (SBU) said:

“As part of the criminal proceedings that have been initiated, cyber security experts and investigators from the SBU used the available data to check a number of Internet sources that gave access to prohibited gambling operations. Law enforcement officers have registered violations of several legal requirements in Ukraine in their activities. ”

Authorities take rigorous action against illegal gambling

In December of last year, an earlier version of Oleg Marusyak's bill to pave the way for legalization of gambling was rejected. At that time, Ukrainian President Volodymyr Zelensky threatened to strictly enforce the country's existing laws against gambling if no framework for regulating online gambling could be found.

In January, Parliament finally approved Marusyak's draft law. 260 of the 450 deputies voted for it. A license fee of the equivalent of 249,000 euros is planned for online casinos. Sports betting licenses are also expected to be issued shortly.

For the Ukrainian authorities, blocking casino and sports betting websites and taking rigorous measures against illegal operators now seem to be a viable way of regulating online gambling activities.

Known international providers such as the Golden Tiger Casino, BetChain, PartyPoker and Pinnacle are also among the blocked websites.

The providers concerned should have five days to appeal the court's decision. It is not yet known whether the providers will make use of this option.

And illegal Ukrainian operators are also being dealt with harshly. For example, two weeks ago the cyber police in Kiev arrested the operators and employees of an online casino company disguised as an IT company.

The illegal casino is said to have been active worldwide and to have raised approximately $ 1 million a month.

900 illegal gambling halls closed in Ukraine

In Ukraine, law enforcement agencies have closed more than 900 illegal gambling halls. This was announced by the Attorney General last Friday.

According to the prosecutor's office [page in Ukrainian], 437 criminal proceedings had been initiated, and game and computer equipment and cash had also been confiscated.

Expansion of gaming laws planned

The illegal gambling halls will be closed just a few weeks after the failure of a bill to expand the country's legal gambling options to include casinos, online casinos, poker and sports betting.

In August 2019, Ukrainian President Volodymyr Selenskyj announced for the first time that he wanted to legalize gambling in Ukraine. This was banned in 2009 with the exception of the state lottery. In October 2019, the Ukrainian government approved a bill that would allow gambling to become legal within five-star hotels in the future. However, the expansion of gambling laws to land-based casinos, online casinos, poker and sports betting failed in mid-December.

Following the failure of the bill to expand the gaming laws, President Selenskyj announced that all gaming halls active in the country, often disguised as lottery acceptance points, would have to close.

According to police, 715 mobile units are currently being used to track down and close illegal gambling facilities. It is estimated that there are currently around 5,300 facilities, including illegal betting shops and casinos.

Billions in revenue expected for the state budget

Meanwhile, the government is sticking to its plans to largely legalize gambling. Extensive legalization of gambling laws would, according to financial policy expert Danylo Getmantsev, help limit illegal gambling in Ukraine.

For the state budget, legal gambling would also mean an estimated 4.5 billion hryvnia (approx. 169 million euros):

“The Ministry of Finance estimates that the state will likely generate 4.5 billion hryvnia through gambling this year. The law [to legalize gambling The Treasury estimates that the state is expected to generate 4.5 billion hryvnia through gambling this year. The law [to legalize gambling] will not be advantageous for currently illegal operating providers. “

While the bill to expand gambling has failed, the government emphasizes that the legalization bill will continue to be valid in five-star hotels. On January 3, another bill was introduced to change tax laws in the country and to lower gaming taxes from the current 18 percent to 10 percent.

It remains to be seen whether the tax cut will be approved and whether a revised bill to expand gambling laws will be accepted by Parliament.