Tax management, responsible gambling, and advertising memorandum. Highlights from SBC Summit CIS

Author

Diana Polunina

SBC Summit CIS, the major conference on gambling and betting in Eastern Europe and other countries, was held in the Kyiv International Conference Center Parkovy on October 13-14. For the first time, the British organizers chose Kyiv as the venue, since the country's gambling market is actively developing and even has a chance to become a regional gambling hub.

The main subjects at the summit discussed by representatives of state regulators, key market operators not only in Ukraine, but also in Georgia, Armenia, Kazakhstan and others, were: taxation, regulatory environment, principles of responsible gaming, land-based players, advertising, the impact of the pandemic, etc. also attended the event and now reports the highlights of the topics discussed at the SBC Summit CIS.

Taxation

During of the panel discussions on the first day of the summit, we learned from Boris Baum, First Deputy Head of the Advisory and Expert Council of the Commission for the Regulation of Gambling and Lotteries (KRAIL—abbreviation from the Ukrainian name), that the Verkhovna Rada is likely to adopt the relevant bill on gambling taxation (No. 2713-d) by November 10. According to the expert, the final document will reduce the GGR rate to 10%, remove the triple license fee, allow having the servers with content in European countries, and servers with transactions—in Ukraine.

Responsible gambling

Responsible gambling was also an important subject of all relevant discussions. For instance, according to Taras Shurubor, the General Director of Pin.up.ua, it is necessary to keep information about gambling addiction in the public domain and indicate age restrictions in this sector. "Every effort should be made to avoid a negative experience for the player," he added, urging the latter to self-control.

The business talked about initiatives to implement technical and operational solutions to combat gambling addiction, such as: early identification of markers to identify people with a penchant for gambling addiction, the ability to self-impose limitations on the operator's website, notifying players, and risks when monitoring changes in their behavior, etc.

And Helen Kean, the Chief Manager of Shangri La Kyiv, stated that it was important to study the behavior of each player, give appropriate recommendations and, if necessary, provide players with psychological assistance.

Pandemic impact on gambling business

The impact of the COVID-19 pandemic on the gambling market was also discussed on the first day. For example, Luka Kapanadze, Chief Commercial Officer of Betlive, stated that the pandemic had triggered a shift from offline to online, and that led to an increase in the number of users, so the company was able to look deeper into the mindset of the customer.

Land-based casino market in Ukraine

On the second day of the summit, it became known that land-based casinos scaled up tourism in Ukraine. Taras Miroshnychenko, CEO at Shangri La, noted that along with the gambling business, not only tourism, but also the hotel business, IT, taxi and others can develop.

Fight against fraud in gambling market

As for the fight against fraudsters, according to Serhiy Kostiushkin, Favbet's Development Manager, the company knows how to work in this direction, since it monitors the activity of its users. But it is important that all legitimate operators are able to disclose their users' blacklist data to prevent platform fraud.

A major event of the summit was the fact that 11 legitimate UGC member gambling companies signed an advertising memorandum that would regulate fair advertising and marketing strategy.

It is worth mentioning the press briefing the state representatives answered the journalists' questions at: Boris Baum, the First Deputy Head of the Advisory and Expert Council of KRAIL, Oleksiy Kucher, the Head of the State Regulatory Service of Ukraine Oleksiy Kucher, Ivan Rudyi, the Head of the Commission for the Regulation of Gambling and Lotteries, Maksym Liashko, the co-CEO and member of the Supervisory Board Parimatch Tech.

The experts clarified the following subjects:

issuing licenses for the gambling business and its advertising. According to Baum, the gambling market is expected not only to be advertised correctly, without inciting to play, but also to appear in social projects;
plans regarding KRAIL’s regulatory acts;
protecting players' data during identification. Kucher explained that, according to the law, all data must be protected, stored on appropriate servers that have a comprehensive information safety system;
illegal operators and the fight against them. According to Baum, the law spells out criminal liability for the inaction of law enforcement agencies in the issue of closing illegal businesses and fighting them. He pointed out that effective methods of the fight are sanctions via the Central Bank in relation to those payment systems that offer their services to illegal business; enforcement action on the companies providing illegal operators with communication services; fines for those providing premises for illegal land operators. However, all this requires a legal framework. "The Commission should react and help, and the whole market should deal with this," the Deputy Head of the Advisory and Expert Council of KRAIL added. Liashko noted that there was one principle in civilized countries with a developed gambling market: the level of service should be more comfortable, taxes should be clear and transparent, so that it would be profitable and convenient for the client to play with legal operators.
investments. Baum stated that Ukraine received many requests from foreigners regarding the creation of entertainment and recreational complexes in Ukraine, and several relevant projects would be laid next year. However, it all depends on the tax aspects. "We estimate the amount of investment at 100 billion—200 billion UAH in 2022," he added.

Conclusions. The gambling market in Ukraine is in the process of formation, but its prospects in the country look optimistic. At the SBC Summit CIS, the country has shown success in work over a period of just over a year after the gambling legalization. And although in the near future it will have to improve the tax and regulatory area and create conditions for investment, it became clear at the summit: the state and legal players are ready to work hard to completely unshadow the gambling industry.