Gambling During the War: Support for the Armed Forces of Ukraine

The milestone of 100 days of war has long passed, and it is becoming more and more clear that the realities of the local business will never be the same. Some sectors of the economy are in a very difficult situation, while others, on the contrary, show stable growth.

The casino industry can be safely included in the list of industries that not only survived but also made a significant contribution to the economy and defence of Ukraine. The organisers of gambling entertainment and lotteries transfer funds to support the Armed Forces, regularly pay taxes and create new workplaces.

The Ukrainian Gambling Niche After February 24: What Has Changed

The casino sector continues to operate and form a powerful economic front.

Prospects for the iGaming Industry

Since the beginning of the full-scale invasion, the interests of local operators have switched to the online space.

Ivan Rudyi, the head of the Commission for the Regulation of Gambling and Lotteries, stated:

After February 24, 2022, all new and renewed licences issued by the Commission were issued to those entrepreneurs who wanted to work in the internet sphere. Business owners are interested in stable online traffic, which is provided by poker players and the users of video slots.

Ukrainian companies are embedding the following initiatives:

• expansion of the range of games (lotteries, action entertainment, 3D slots);
• addition of new products from certified providers;
• implementation of solutions in the demo mode;
• launch of personal promotions and bonus programs;
• organisation of charity tournaments to raise funds for the Armed Forces of Ukraine;
• strengthening of measures to ensure responsible gambling principles (setting limits and user verification in real-time).

Experts believe that, during times of war and the post-war period, the development of Ukrainian gambling will be associated with the online sector.

Operators plan to improve the security of their iGaming projects. It concerns the protection of the personal data of customers against hacker attacks from Russia and Belarus.

The State of Affairs in the Land-Based Sector

Ivan Rudyi commented on the situation:

With the beginning of hostilities, many offline casinos were forced to stop working or relocate. As of June, business in the capital and central regions is starting to recover but the fate of licensees from the occupied and front-line territories remains uncertain.

Let us consider key statistics:

Legislative Initiatives

According to Ivan Rudyi:

The Commission for the Regulation of Gambling and Lotteries resumed its work in early March, and by the end of the month, it started to massively receive the reports from licensees.

The main queries were related to such aspects as:

• extension of terms of licence agreements;
• registration of the permit for conducting online activities;
• changing the user verification procedure to increase security.

The Commission has developed a roadmap for those entrepreneurs who decide to temporarily suspend their activities due to force-majeure circumstances. Moreover, there is a mechanism that allows operators to delay licence payments with no risk of getting fines and penalties.

International Representation

The Commission participates in the preparation of a bilateral memorandum between the Ukrainian and Lithuanian regulators in the field of gambling. The cooperation agreement between the 2 countries will open up new opportunities for domestic operators and facilitate their entry into the European market.

In April 2022, the Commission joined the European Gambling Regulators Forum (GREF).

The international structure allows entrepreneurs to:

• coordinate policy in the gambling sector;
• hold thematic conferences and exhibitions;
• attract B2B partners and investors.

How Domestic Operators Help Ukraine

In this difficult time for the country, licensed business owners actively support the Armed Forces, territorial defence units, refugees, and temporarily displaced persons.

Voluntary Donations

Key initiatives of the representatives of domestic gambling:

1. The Ukrainian National Lottery company transferred 38 million hryvnias to the State Assistance Fund. 25 million were sent to support the Armed Forces of Ukraine and 13 million were contributed to the advance payment of taxes.
2. The Parimatch brand transferred more than 30 million hryvnias to a special account of the National Bank of Ukraine. Funds were allocated for the purchase of transport, protective equipment, pharmaceuticals, and medical equipment.
3. Gamedave donated 1 million hryvnias to the Armed Forces of Ukraine. With this money, vehicles, fuel, and military ammunition were bought.
4. The Kosmolot company became one of the initiators of the creation of the “Come back alive” charity fund and transferred 500 thousand hryvnias to a dedicated account.

Payment of Taxes

In the time of war, owners of the domestic gambling business created a powerful economic front to support the country during this difficult period.

At the end of April 2022, Ukrainian operators replenished the public treasury by 670.7 million hryvnias. Mostly, these are licence fees of the organisers of the second year of activity, as well as contributions to the Pension Fund and value-added tax.

In just 4 months, entrepreneurs completed a six-month plan to raise funds for the state budget. The largest taxpayers were Parimatch LLC, Primum LLC, and other companies.

Creation of New Workplaces

Due to the active transition to the online space, domestic operators have opened up many vacancies.

Gambling companies need:

• programmers;
• system administrators;
• QA engineers;
• dispatchers of call centres;
• site administrators;
• game testers.

In April, several Ukrainian and European providers launched the Give a Job for UA campaign. The goal of the initiative is to form a personnel reserve, retrain specialists, and improve their skills. First of all, the project is aimed at providing jobs for refugees and temporarily displaced persons.

International Reaction of the Gambling Community

Representatives of the foreign casino market condemned the Russian invasion of Ukraine:

1. The UK Gambling Commission called on legal operators to stop cooperating with the aggressor country. Otherwise, entrepreneurs can fall within the scope of the law on money laundering and may lose their licences.
2. The Maltese regulator recommended operators to check business connections with the sanctioned Russian business. Representatives of the supervisory authority recalled the impossibility of continuing joint projects with the Russian Federation.
3. The Allwyn Czech lottery converted its office in Prague into a refugee centre. The company provided Ukrainian citizens with food, bed linen, personal hygiene products, and other necessary things.
4. The NagaCorp Cambodian gambling provider froze its investments in such a project as the construction of a casino resort area in Vladivostok.

The Main Things about the Comprehensive Support of Ukraine

• Since the beginning of the year, casino owners have transferred 670.7 million hryvnias in the form of taxes to the public treasury, surpassing the six-month fundraising plan in just 4 months. Revenues are formed from royalties, contributions to the Pension Fund, and value-added tax.
• Operators participate in the volunteer movement and fundraising for the Armed Forces of Ukraine and support refugees and temporarily displaced persons. Entrepreneurs also finance the purchase of ammunition, medicines, transport, and special military equipment.
• After February 24, 2022, many gambling companies switched to the online space. In the land-based sector, on the contrary, there is a temporary closure of gambling facilities, especially in the frontline areas.

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