Blogs

Anton Kuchukhidze: CRGL, thank you for understanding!

Even in times of peace, the effective development of any business depends on quality management, efficient use of finances and creativity, as well as public support. During such serious upheavals as war, synergy and mutual understanding between the State and business are vital for industries. Also, the willingness to compromise is the key to an effective fight against a common enemy.

In my blogs, I have repeatedly stressed that the war unleashed by russia against Ukraine caused hardships for the Ukrainian business. We have yet to feel the long-term consequences of this trying time for the national economy. However, it is noteworthy that today Ukrainian regulatory and supervisory bodies are trying to reduce the negative impact.

It is crucial that gambling is no exception to this rule. The Commission for Regulation of Gambling and Lotteries (CRGL) is perhaps the youngest public entity in the history of independent Ukraine. However, this does not prevent the Commission’s firm support for the industry and a deep professional understanding of the situation currently faced by licensed gambling operators.

For instance, in its recent statement, CRGL emphasized that with the beginning of martial law in Ukraine, the licensed gambling operators began to notify the Commission of their inability to fulfil their duties in full and on time according to the law due to hostilities. In particular, they refer to their failure to pay royalties. To a greater degree, it concerns offline gambling.

In a situation like this, the public regulator has two options. The first is to force the business to pay, referring to the military situation and the State’s needs. Then there will be payments, but these will be the last ones since the industry will cease to exist. However, there is a second, more rational option: to take the perspective of the business, remove the additional tax burden, and allow it to function, despite the temporary failure to fulfil its obligations. After all, when the industry works, it saves jobs and generates taxes received by the state budget.

I am glad that CRGL understands this and chooses the second way of interacting with licensed gambling operators. In particular, the Commission’s above statement says: “CRGL understands the situation in the gambling market, and therefore, under martial law, does not consider the issue of accountability for violation of the terms of payment of license fees established by law.”

The best scenario would be if the Verkhovna Rada of Ukraine had the same position on gambling and finally adopted the specialized draft law on gambling taxation 2713-d. It would allow the gambling industry to stay afloat through difficult times, as well as allow large global brands to enter the Ukrainian market.

If the world leader in bookmaking, William Hill, buys a license to operate in the small Latvian market, why not do it in Ukraine with the market ten times larger than the Latvian one? It even is possible in times of war since the online gambling sector shows a sufficient pace of recovery.

Anton Kuchukhidze, Chairman of the Ukrainian Gambling Council, exclusively for the Ukrainian News
Anton Kuchukhidze