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LEGALIZATION OF GAMBLING BUSINESS IN UKRAINE: ALL PROS AND CONS

 

The problem of legalization of gambling business in Ukraine has been on everyone's lips for several years. It is well-known that is has been banned for 7 years by now.
 In her exclusive interview Irina Sergiyenko, President of the Ukrainian Gaming Industry Association, talks about plans of UGIA, and prospects of legalization of gambling business in Ukraine.

How did you come up with the idea to establish an association?

The idea originated somewhere in the beginning of the last year, but I think that was on the back burner of my mind for a while. All members of our organization have been involved in the development of legislative initiatives aimed to legalize gambling business in Ukraine, in one way or another, for several years, and they deeply understand the specifics of Ukrainian gambling market, its problems and prospects. There is also a clear understanding of what obstacles have been inhibiting this process over the years. And if we talk on a global scale, the key criterion for the success of this process is, firstly, consolidation of the efforts of all stakeholders, and secondly, bringing the dialogue between the state, business and the public in the public spotlight, thirdly, active participation of independent experts in the process, to ensure that this dialogue does not become another "populist play with the public opinion". The Ukrainian Gaming Industry Association must become that very kind of unifying, and at the same time, expert platform.

What are the objectives of the Association?

 Today, our primary objective is regulation of the gaming industry, taking into account the best world practices and experience in Ukraine. But you need to realize that legalization is not a magic key, it is just the beginning of a long period of rehabilitation. Local operators, deeply affected by the situation of 2009 and having lost confidence in the state, will return to work in the legal field and compete with foreign operators — and it is a complex task. Foreign operators are expected to enter the unknown territory and compete with the operators who have been working in the shade for many years or underground by their own unwritten rules. And the state must quickly put in place effective mechanisms of interaction and control of the business. Players may also encounter changes.

Without consolidating platforms and joint solutions to the problems that will arise in progress it will be very difficult to go through this process successfully.  So, legalization is not the finish. It's the start.

In what ways are you going to achieve your goals?

Using lawful and civilized means, taking into account the special aspects of their application in Ukrainian realities. But if to talk seriously, by reference to our primary objective, we intend to continue our participation in the development of legislative initiatives aimed to regulate the gaming industry, provide expert support, both to developers and businesses, conduct and participate in activities aimed to discuss conceptually meaningful issues for effective regulation of the market and development of best possible solutions. I believe publicity of this process to be another important direction of our work, with the purpose of informing all stakeholders about the work being done in this direction, as well as persuading the authorities and the public of the need to address the regulation of the gambling industry market transparently and correctly, and finally explanation of the significance of this issue for the country.

What are the pros and cons of legalizing gambling business in Ukraine?

 Honestly, I do not know any cons. And I am not playing cunning. Although, if you think about it, will result in a huge "minus" in the revenues for the system of corruption, of course, and possibly not all local operators will be happy with the need to work under a healthy competition with foreign operators in the legally controlled market.

Basically I see only positive sides to it:

1) billions of gryvnyas of additional revenue to the budget;

2) de-shadowing of the huge capital;

3) inflow of foreign investment. The Ukrainian market is under a great interest;

4) a powerful impulse for the revival and development of related industries: hospitality business, tourism, racecourse industry, horse breeding, the real estate market, the sphere of consulting and IT solutions;

5) introduction of real mechanisms to protect the players rights — in fact, consumers of the market of gambling services. Today, a player is absolutely rightless and unprotected. The business is working and developing quite safely and openly and nobody cares about people's protection.

6) block to the powerful channel of feeding the corruption system of Ukraine;

7) fulfilment of the obligations of Ukraine to the European Community concerning the requirement to introduce effective anti-money laundering mechanisms and the regulation of the gambling market;

8) creation of not less than 10,000 additional jobs.

But all this can become a reality, if the market is regulated in the light of best world practice, with broad expertise involvement, engagement of all stakeholders in the dialogue (local operators, potential foreign investors), the public, players. To achieve this, we must work on the market regulation in terms of the open public dialogue, to prevent any representative of the corruption system from getting the idea that it is possible to draft a law for themselves and friends, buy the votes and push another "heinous insinuation". Such a scenario worked in 2012. We should not repeat that shameful experience.


If they legalize gambling, what will be your next steps?

As I have already said, legalization is not the finish, it is the start. And, in fact, the major work will begin only afterwards. I really hope that by that time the Ukrainian Gaming Industry Association will have become a consolidated, authoritative platform that can make a significant contribution to the establishment and development of a healthy and stable market for the gaming industry in Ukraine. But let's tackle issues when they arise.

Who supports the Association?

 Expert advice and information is provided both by representatives of the local market and potential foreign investors. We appreciate the support of friendly-minded local and foreign organizations, mass media, as well as experts.

With regard to the material side, the Association exists today mainly due to contributions of its founders, the members of the organization, and with the support of individual experts. We do not represent the interests of individual companies or people, respectively, we do not have a specific source of funding. However, there is an option of a financial partnership. Active work requires funds. I think it's perfectly clear to everyone.

For today legalization of gambling in Ukraine is still an open question. And we fully agree with Irina, that it requires a correct and immediate solution.

 

16.02.2017