Gambling Industry During the War: Support for Ukraine's Battle

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Updated 03 june 2024

The Ukrainian casino niche did not stop after February 24, 2022. It continues to function and support the economic state of the country.

Ukrainian gambling industry during the war

In this article, the Online Casino Market company will tell you about the contribution of entrepreneurs to the victory of Ukraine, international projects, and legislative changes.

Comprehensive Support of Ukraine During the War

The key initiatives of the gambling community are aimed at creating job opportunities, as well as organising and sponsoring volunteer programs. Licensed operators regularly pay taxes and make voluntary donations for the needs of the Armed Forces of Ukraine and territorial defence divisions.

Creation of Employment

In April 2022, several Ukrainian and European companies launched the “Give a job for UA” initiative.

The main patrons of the project are:

  • UN Global Compact in Ukraine civil organisation;
  • Parimatch Ukrainian operator;
  • Jooble provider;
  • Happy Monday recruitment agency.

Goals of the above-mentioned initiative:

  • creation of new jobs;
  • advanced training of hired employees;
  • formation of a personnel reserve.

The main emphasis is placed on the provision of jobs for temporarily displaced persons and refugees.

After the outbreak of hostilities, some of the offline casinos and gambling halls were forced to close. Operators had to diversify their activities by moving to the online sector.

Several new highly paid positions have appeared:

  • administrator,
  • marketer;
  • IT specialist (programmer, QA engineer);
  • technical support staff member.

Payment of Taxes and Fees

In December 2021, the Verkhovna Rada adopted the state budget for 2022. The expected revenue from the gambling industry is more than 1.2 billion hryvnias.

At the end of April 2022, at the height of the military operations, local casino owners transferred 670.7 million hryvnias to the public treasury. As you can see, in just 4 months, the legal business executed the semi-annual plan for filling the budget and transferred 55% of all taxes for 2022 to a special account.

The lion's share of income is royalties from the organisers of gambling activities and lotteries.

Among the largest taxpayers, we can name:

  • Parimatch LLC (a contribution of 131.4 million hryvnias for the acquisition of 2 types of permits: for the acceptance of bets on sports events and online casino management);
  • Primum LLC (34 million hryvnias for a licence that allows the company to open land-based betting shops and gambling halls);
  • Ukr Game Technology LLC (23.4 million hryvnias was paid to obtain a permit for online casino management).

In addition to direct taxes, the industry provides indirect revenue to the budget:

  1. Deductions to the pension fund. Entrepreneurs transfer 22% of the salary of each hired employee.
  2. Value-added tax. It must be paid when business owners purchase software and equipment (both imported and domestic) and receive such services as the installation of solutions, internet hosting, and marketing promotion.
  3. Excise duty. The tax applies to offline casinos that sell excisable goods, such as alcoholic beverages and tobacco products.

Financing of the Armed Forces of Ukraine and Territorial Defense

Almost all members of the Ukrainian Gambling Council have provided financial support to the Ukrainian armed forces. The organisation unites more than 80% of licensed domestic operators, and the total amount of donations reached 100 million hryvnias.

Donations were sent to:

  • search and buy large quantities of ammunition (helmets, berets, warm clothes, uniforms);
  • purchase specialised equipment (walkie-talkie sets, thermal imagers, mobile observation systems, sapper's bags, quadcopters, and aviation GPS);
  • purchase and deliver cars;
  • collect and deliver medicines;
  • organise the work of logistics warehouses.

Domestic gambling companies are actively involved in the evacuation of citizens from the war zone, helping refugees and displaced persons.

International Reaction and Volunteer Projects

Ukrainian gambling business: international reaction

Foreign operators have a rigid attitude towards the Russian Federation: they believe that any hostilities on the territory of a sovereign European country must be stopped.

Complete Isolation of the Russian Business

Since the beginning of the full-scale invasion, the aggressor has been excluded from many international iGaming projects.

  • Clarion Gaming (the organiser of ICE London and iGB Affiliate gambling events) announced that providers from Russia and Belarus are excluded from participation in all events in 2022.
  • The NagaCorp Cambodia casino group has stopped funding for a joint project with the Russian Federation the aim of which was to build a casino resort in Vladivostok.

Prestigious gambling regulators also did not stand aside and denounced the military conflict:

  • The UKGC urged licensees to assess the risks of cooperation with an aggressor country. Otherwise, the regulator has the right to revoke their permits following the Law on Sanctions and Combating Money Laundering of 2018.
  • The MGA regulator recalled that partnership with a country under sanctions is a good reason to revoke previously issued licences.

Charity

The international gambling community actively supports Ukraine in this difficult time:

  1. LeoVegas Group, a Scandinavian casino provider, donated 500 thousand Swedish kronor to Ukrainian refugees. The money was transferred to a special account of the Red Cross. The organisation is engaged in the evacuation of the population from hot spots and helping refugees.
  2. GGPoker, a European operator, announced that since April 2022, all funds that were raised from charity tournaments and promotions will be transferred to a special account of the National Bank of Ukraine.
  3. Sports and Betting Community, a European wagering organisation, has launched a fundraiser in support of Ukrainian refugees. Donations of 250 thousand pounds were sent to Choose Love, a European fund that helps refugees. With this money, people are provided with humanitarian and medical assistance, as well as legal and psychological support.

Gambling During the War

The situation in the Ukrainian market is ambiguous: while the online sphere has received a new round of development, many land-based enterprises have suspended their work.

Let us consider the main trends in the country’s casino industry:

Online gambling development

After February 24, 2022, many operators switched to the online space by taking the following actions:

  • addition of content from the world’s leading software vendors (lotteries, multi-user games, video slots);
  • the launch of bonus programs;
  • provision of an opportunity to play in a demo mode;
  • organisation of joint projects to raise funds for charity.

Experts predict that under martial law, the lion's share of operators' revenues will come from online gamers. Therefore, providers plan to further develop iGaming projects.

The temporary decline of land-based locations

With the beginning of a full-scale war, many offline casinos and gambling locations were forced to close. These are facilities in the occupied territories and the war zone, as well as several institutions in the central part of Ukraine.

12 licensed brands announced the closure of 39 branches. Only 23 establishments work now: 5 casinos and 18 gambling halls with slots.

Most investment projects have also been put on hold. We are talking about casino complexes in allocated areas and the related infrastructure (hotels, restaurants, and inns).

Legal support from the State

The Commission for the Regulation of Gambling and Lotteries of Ukraine has presented a clear action plan for operators who find themselves in force majeure conditions.

Entrepreneurs can:

  • temporarily suspend the work of land-based and online casinos;
  • postpone the payment of licence fees;
  • become a member of international gambling projects, and much more.

The Commission takes part in the preparation of a bilateral memorandum of cooperation between the Lithuanian Gambling and Lottery Supervision Service and the Ukrainian regulator. It is expected that domestic operators will soon be able to participate in Lithuanian iGaming projects.

Legislative initiatives of the government

In 2022, the adoption of bill No. 2713-d is expected. It should make adjustments to the taxation of licensed companies.

The tax burden on businesses should be fixed at 10%. As in the past, casino owners will pay VAT and contributions for hired employees.

The Main Things about the Ukrainian Casino Industry

Gambling business in Ukraine: key features

The domestic business continues to work even during the war and actively supports the Armed Forces of Ukraine, refugees, and temporarily displaced persons.

  • In January-April 2022, legal operators transferred 670.7 million hryvnias to the public treasury, executing the annual plan by more than 50%. Basically, these are licence fees, VAT, excise duty, and contributions to the pension fund for hired employees.
  • The industry creates new jobs and participates in charitable activities. All collected funds are transferred to the acquisition of specialised equipment, ammunition, vehicles, and medicines for the Armed Forces of Ukraine. Moreover, entrepreneurs participate in the voluntary movement, helping with the evacuation of the population from the war zone.
  • Among the key trends in the Ukrainian market, it is worth highlighting the development of the internet sector and the temporary closure of some land-based casinos and gambling halls. Legislative initiatives of the government are aimed at implementing the policy of easing the tax burden and launching iGaming projects in cooperation with European partners.

Contact the managers of Online Casino Market and find out about the latest iGaming releases. We will also be glad to help you with the launch of a lucrative internet casino, installation of top payment software, and acquisition of certified live games.

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Karen Fill

Author

Karen Fill

Gambling business expert at Online Casino Market

Updated 03 june 2024