How Ukraine wants to restrict operation of online casinos

The Verkhovna Rada has approved in the first reading a draft law on improving state regulation of gambling and lotteries and combating gambling addiction (ludomania). It provides for restrictions on online casino advertising, a ban on sponsorship, and the involvement of the military.

BC (Business Censor) has been looking into what exactly the new draft law No. 9256-d, which is still to be considered by parliamentarians in the second reading under the shortened procedure, provides for online casino operators.

The start of changes in the gambling industry was the appeal of volunteer and soldier Pavlo Petrychenko to President Volodymyr Zelenskyy, in which he raised the problem of gambling addiction among the military.

On 29 March, Petrychenko posted a petition on the website of the President of Ukraine to restrict the operation of online casinos, which was almost instantly "taken down" website due to the activity of users, and within an hour gained the 25,000 votes necessary for consideration by Vladimir Zelensky.

In the petition, Petrychenko proposed to ban gambling and access to online casinos for the duration of martial law and to ban advertising of games using the symbols of the Armed Forces of Ukraine. Charitable foundations should be prohibited from cooperating with gambling market operators, and the military should not accept assistance from them.

In addition, Petrychenko proposed to ban pawnshops from accepting drones, thermal imagers and other similar dual-use goods.

On the day the petition was published, Volodymyr Zelenskyy responded to it. In an evening address, the president said that he had instructed the head of the SSU, the State Special Communications Service, the Ministry of Digital Transformation, and the NSDC Secretary to collect gambling analytics data and propose solutions.

On 20 April, the National Security and Defence Council published a decision "On Counteracting the Negative Effects of Online Gambling". According to the decision, the government has a month to:

to develop a procedure for limiting all forms of gambling advertising, including the use of electronic communications, symbols of the Armed Forces of Ukraine and other military formations established in accordance with the laws of Ukraine, as well as the distribution of relevant contextual material;
to prohibit the registration of several accounts for one player by a casino online gambling organizer, as well as to determine the maximum time of continuous participation in online gambling per day for one account and introduce mandatory breaks in the game, and determine the maximum time of play per week;
to oblige online gambling organisers to set a limit on player spending on gambling during a certain period of time (day, week, month) before the start of the game, with the possibility of changing this limit no more than once a month;
to implement the State Online Monitoring System;
to conduct a national awareness campaign on the dangers of gambling;
to make decisions by the National Commission for the State Regulation of Electronic Communications, Radio Frequency Spectrum and Postal Services to block illegal websites that provide access to gambling upon the submission of the central executive body responsible for the formation and implementation of state policy in the field of organization and conduct of gambling and lotteries.

At the same time, the Commander-in-Chief of the Armed Forces of Ukraine, Oleksandr Syrskyi, and other military leaders should introduce a ban on gambling for the military.

The Ministry of Health should ensure the adoption of a clinical protocol for the treatment of severe gambling addiction within three months and conduct appropriate training for healthcare professionals.

The Ministry of Social Policy should adopt the state standard for the provision of social services "017.4. Social and psychological rehabilitation of people with gambling addiction" and conduct relevant training for social service providers.

The SSU will conduct inspections of gambling organisers to ensure their compliance with the sanctions legislation of Ukraine within two months.

The National Security and Defence Council recommended to the National Bank of Ukraine:

introduce a ban on accepting dual-use goods as collateral;
to approve guidelines for payment card issuing banks to comply with the requirements of the Law of Ukraine "On Prevention and Counteraction to Legalization (Laundering) of Income Obtained by Criminal Means, Terrorist Financing and Financing of Proliferation of Weapons of Mass Destruction" in terms of P2P transfers and banks to block credit card payments to accounts of gambling organizers for participation in online gambling.

The Ministry of Digital Transformation is to hold negotiations with Apple and Google within a month to ban the posting of gambling apps without a license in the UA zone in their app stores.

In addition, on April 24, the Parliament adopted in the first reading the draft law No. 9256-d, which provides for the liquidation of the Commission for Regulation of Gambling and Lotteries (CRGL), and its functions as a market regulator will be taken over by the Ministry of Digital Transformation of Mykhailo Fedorov.

The draft law virtually bans gambling advertising, among other things:

in any audiovisual and audio media regardless of the technology of their distribution;
in online media;
in all printed media (except for specialized publications dedicated to gambling);
in all publications (except for specialized publications dedicated to gambling);
on transport, including vehicles and equipment;
through advertising events;
by means of outdoor advertising;
in places of mass events;
on the Internet, including on video-sharing platforms and information-sharing platforms;

The draft law also prohibits the offer or provision of any direct or indirect reimbursement of expenses for access to gambling;

Place images or mentions of gambling, trademarks, other intellectual property rights under which gambling activities are conducted, as well as other designations under which gambling is conducted, on any goods (items), except for placement on goods (items) related to the gambling activities;

Send notifications to an indefinite number of persons by mail, e-mail, or mobile communication;

It is forbidden to advertise gambling:

- with the participation of persons under the age of 21, including as photo models;

- with the participation of volunteers and/or military personnel, as well as persons whose appearance imitates the appearance of military personnel;

- involving popular figures or the direct or indirect endorsement of gambling by popular figures, as well as the use of images and references to the names of popular people, characters from films, television and animated films, and prestigious institutions;

- with the participation of athletes, doctors and other medical professionals, as well as persons whose appearance imitates the appearance of athletes and doctors;

Online casino advertising is prohibited from using themes related to the deterrence and repulsion of armed aggression by the Russian Federation during the period of martial law, as well as any patriotic slogans and/or symbols.

Companies licensed to conduct gambling activities cannot act as sponsors.

Violation of the above requirements is subject to sanctions, including revocation of the license.

Most importantly, the draft law restricts the participation of military personnel in visiting gambling facilities and gambling by entering them in a special Register of persons who are limited in access to gambling facilities and/or gambling.

The procedure for entering into the Register and restrictions should be approved by the Cabinet of Ministers.

The problem is in the numbers

According to Opendatabot, the 10 largest gambling companies officially increased their wealth by 28 times last year. The leader was SpaceX (Cosmolot brand), and Favbet (FAVBET brand) had the largest increase in earnings - 425 times.

Last year, the turnover of the gambling business in Ukraine amounted to UAH 12-15 billion per month, or up to UAH 180 billion per year. Online casino players in Ukraine spend about UAH 400 million every day.

At the same time, donations from Ukrainians to the three largest foundations (United 24, Come Back Alive and Serhiy Prytula Foundation) totaled UAH 18.75 billion over the year, and UAH 27.4 billion through mono banks.

It is impossible to estimate how many people suffer from gambling addiction in Ukraine. There are no statistics available, nor are there any serious studies of the prevalence of this disease in Ukraine.

Since 2021, Ukraine has officially launched the Register of Gambling Addicts, which as of the beginning of 2024 has 3.7 thousand addicts. 87% of them were included in the Register in 2023. That is, the Register has grown 8 times over the past year. You can get into the Register of Gambling Addicts by yourself by submitting an application for self-restriction to the Commission for Regulation of Gambling and Lotteries (CRGL), by a decision of the CRGL on the basis of an application for restriction from relatives, or by a court decision.