A Horrible Accident Led to a Major Gambling Ban in Ukraine
Gambling in Ukraine was not always banned. In fact, since the country’s establishment in the early 90s’, gambling was a completely legal thing to do, as well as is was possible to license an establishment where your business provides gambling as a service.
However, gambling was banned in 2009. In May 2009, a gambling hall caught on fire, and nine people were killed in the accident. This plus the public’s general disapproval of gambling led to the Ukrainian parliament passing a law called “On Prohibition of Gambling Business in Ukraine”.
Most of the active gamblers thought that this was the end of gambling in Ukraine because the Ukrainian Cabinet of Ministers took gambling out of the list of economic activities. They defined gambling as any game that is based on participants making bets to receive a prize and when the game’s result relies on chance.
Such a definition made pretty much all gambling types prohibited in Ukraine. This encompasses slot games, bookmaking, gambling with cards, and even online gambling. Also, private lotteries and similar games were banned; an exception from the law was made for the government-run lottery.
Ukraine Has Numerous Illegal Gambling Rings
The criminalization of gambling establishments did not help to solve the problem. The gambling ban did not achieve the expected results and did not drive Ukrainian people away from gambling. At the time of the ban, the Prime Minister, Yuliya Timoshenko stated that there are over 100,000 gambling establishments in the country.
It was an unusually high number, as in that year, Ukraine’s population was around 47M people. This means that there was one gambling hall for every 470 Ukrainians. The government was afraid that gambling was corrupting young Ukrainians, as well as taking the last money from poor families.
After the ban, not much has changed. Only in July 2009, in a month after the ban, 500 underground casinos were uncovered. The worst part was that these gambling halls were absolutely new places. That means that even under prohibition, the illegal gambling sector was rapidly growing.
How was this industry growing, even though it was outlawed? The answer is easy: after a very short while, the law enforcement agencies started to corroborate with whole gambling networks. So, even though the activity was most certainly banned, the police did not do anything about it.
As of 2017, there were more than 150,000 complaints about illegal gambling activity, ranging for gambling halls to small poker rooms. The complaints were coming, yet no one was doing anything about it and there was a legal loophole.
Gambling in Ukraine was Actually Permitted All This Time
According to the initial gambling ban law of 2009, “On Prohibition of Gambling Business in Ukraine”, they were planning to introduce another law that would regulate the creation of special gaming zones in 3 months. However, due to political unrest in the country, the law was introduced only on November 3, 2010.
The passed law was called “On Gambling Organization and Maintenance of Gambling Activities in the Special Gambling Zones”. The Ukrainian government saw a rapid decrease in government revenues coming from taxes due to the ban. This industry usually brings insane amounts of money to any country’s budget where it is legalized.
The politicians wanted to make gambling an entertainment outlet only for the rich. According to this law, only hotels with at least 4-star ratings, cultural and entertainment complexes, and Ukraine-registered ships could host gambling halls.
These gaming zones were supposed to limit access to gambling for the vulnerable part of Ukraine’s population. The law stated that all gaming zones had to be far away from residential areas and any government, academic, and medical institutions.
Due to major corruption inside enforcement authority structures, the licenses for such gaming zones were given out to anybody who could pay off the police. Additionally, most such gambling halls did not pay taxes to the government's budget.
The Ukrainian Government’s Intentions to Legalize Gambling
In 2019, Ukraine underwent a lot of changes, including the massive reelection, which sent many old politicians packing. The new government under the leadership of the Ukrainian new president, Volodymyr Zelensky, set out to bring a lot of improvements to the country, as well as fight corruption.
The draft for the new law that will legalize gambling was introduced already in the summer of 2019, but it is still in the works being polished. The Ukrainian government wants to bring the existing gambling sector out of the shadow. This will bring a lot of money to the government’s budget, as seen on the BBC.
This will also allow gambling to transform into a safe activity with guarantees that will not allow people to be conned out of their money. The government aims to legalize physical and online casinos, bookmaking parlors, online betting, slot machines, lotteries, as well as poker.
The government will create a number of registers and a collegial group to keep track of all gambling establishments, monitor them, and amend the gambling policies in the future. 2019 seemed like a promising year for gambling in Ukraine says Ann Holmes writing for Online Casino Gems.
The Ukrainian President’s Outburst and the Operation “Eradication”
The government drafted the law, and the parliament approved it, but not a lot of action was taken by the enforcement agencies. This led to the Ukrainian president, Mr. Zelensky, publicly addressing the gambling hall owners on 20th December 2019, according to Forbes.
He said that all of these establishments are illegal and should be immediately closed, giving them time until 16:00 on that day to close their business. This coincided with numerous raids by the police.
Of course, the raids were organized by the minister of internal affairs, Arsen Avakov, as seen on Unian. In the end, in the span of just two days, around 5,300 halls were closed and 50M UAH was confiscated.
What Is to Come for Gambling in Ukraine
It seems like gambling in Ukraine is finally going to come out of the shadows and start bringing a lot of money into Ukraine’s budget. This is also a great piece of news for Ukrainian gamblers, as they will be protected by the law from shady gambling halls.