How Gambling Affects Other Sectors of the Ukrainian Economy: Facts, Figures

The casino industry cannot exist in a vacuum. It interacts with a dozen related sectors, creates thousands of jobs, attracts foreign investment, and increases budget revenues.

Domestic Casino Niche: Key Facts

In August 2020, the government permitted games for money in the country, allowing all types of digital and offline gambling services. Land-based and online casinos, betting shops, poker clubs, and establishments with slot machines have started opening throughout Ukraine.

The main objectives of law No. 768-IX of August 13, 2020:

• withdrawal of the casino business from the shadows and fight against unlicensed operators;
• increase in revenues to the budget;
• attraction of investments in the economies and development of related industries;
• fight against ludomania and adherence to the principle of responsible gambling.

According to the plan, the state budget of Ukraine should be replenished by 7.6 billion hryvnias by the end of 2022. This is mainly the cost of issued licences and tax revenues.

Key information about the Ukrainian market:

• Permits are issued by the Commission for the Regulation of Gambling and Lotteries.
• At the end of 2021, the largest amount of income was received from the sale of licences for land-based casinos (26.8%), online locations (22.7%), gaming halls (10.1%), and betting shops (8.1%). In 2022, it is expected that this ratio will remain the same.
• 28 gambling brands are registered in Ukraine. The largest part of ​​casinos and establishments with slot machines (63.1%) belongs to 3 large companies.
• Kyiv became the leader among the cities in terms of the number of available gambling facilities. There are 14 locations in the capital, 7 in Lviv, 6 in Kharkiv, and 5 in Odesa.
• In the fall of 2021, the Verkhovna Rada adopted bill No. 2713-d on amendments to the tax code of Ukraine. Thus, entrepreneurs must pay 10% of the gross gaming revenue (the sum placed by users in the form of bets minus their winnings) and 18% of net profit.
• The launch of an online system aimed at monitoring the operators' activity is scheduled for 2022. Special software will control the gambling market in real-time. It will include such aspects as the legality of advertising, the completeness of payment of winnings, and the timely deduction of taxes.

Industries Stimulated by the Gambling Sphere

Experts believe that by the end of 2022, the total economic effect of the legalisation of the casino market will be estimated at 30 billion hryvnias.

Let us consider the areas that will demonstrate stable growth along with the gambling niche:

Legitimate Advertising of Gambling Entertainment

With the legalisation of casino solutions, investments in PR and marketing have increased. Agencies get huge contracts, and the industry becomes one of the main advertisers in the country, along with such businesses as household appliances and consumer products selling.

It is worth noting that only socially responsible advertising is allowed in Ukraine. Thus, for example, marketing activities should not be directed at minors, and the placement of banners is prohibited near schools, kindergartens, hospitals, and children's clubs.

In December 2021, 11 Ukrainian licensed operators signed the UGC Memorandum on Responsible Casino Entertainment Advertising.

The main points of the document:

1. Gambling popularisation is prohibited on radio, cable, IP and online television, as well as with the participation of photo models under the age of 21.
2. Promotional videos cannot depict the gameplay (imitation of the rotation of a roulette wheel or reels of the slot, placement of bets, and the user who is holding chips in his hand).
3. Hyperlinks (QR codes) must not be applied to promotional materials (brochures, posters, internet banners).
4. The name of the casino operator and its corporate attributes should not occupy more than 40% of the layout.

As we can see, legal operators adhere to the principles of socially responsible advertising, which should not be aimed at vulnerable segments of the population (children, low-income and incapacitated persons).

Legitimate advertising has a tangible economic effect:

1. Signing sponsorship contracts. The trend can be clearly seen in the betting sector where major bookmakers actively support national football, basketball, and tennis federations. Companies finance teams and athletes and also act as title sponsors at exhibition tournaments.
2. Charity. These are key measures aimed at interacting with vulnerable segments of the population, including the financing of relief funds. It helps to show the value of the gaming industry and create its positive image.

The Main Things about the Gambling Business in Ukraine

• The launch of the gaming market will retrieve the business out of the shadows, increase foreign investment and revenues to the public treasury, and stimulate the development of related industries.
• Experts believe that gambling will have a positive impact on consulting, IT, and recruiting niches. The legalisation of the sphere will create thousands of jobs and replenish the state budget by more than 30 billion hryvnias.
• Thanks to the actions of the government, huge investments in PR and marketing will be attracted to the market. Operators must adhere to the principles of socially responsible advertising.

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