The Commission for the Regulation of Gambling and Lotteries (KRAIL), Ukraine’s gambling regulator, has taken decisive action against illegal gambling activities in the country. Recently, KRAIL blocked 371 websites offering illegal gambling services as part of a joint effort with the Security Service of Ukraine. This move was formalized through Order No. 451/2256, which targeted the domain names of these unauthorized gambling sites.

The order mandates electronic communication service providers to block the specified websites using their Domain Name System (DNS) servers. Between April and May, KRAIL and the Security Service issued over 1,000 orders to restrict access to various domain names and subdomains on DNS servers, further intensifying the crackdown on illegal gambling operations.

Uncertainty Over KRAIL’s Future

KRAIL’s recent actions come at a time when the future of the regulator is in question. In April, the Verkhovna Rada, Ukraine’s parliament, voted to dissolve KRAIL after more than a year of contention over its effectiveness in regulating the gambling industry. The opposition to KRAIL’s operation stemmed from dissatisfaction with its regulatory performance, particularly its delays in processing license applications.

KRAIL is currently composed of a collegial body with a chairman and six members. Meetings are only valid if at least five members are present. However, some commission members were mobilized for military service following Russia’s invasion of Ukraine, causing significant delays in regulatory processes, including the issuance of licenses.

The legislative bill that includes KRAIL’s dissolution also proposes stricter measures on gambling advertising and other regulatory controls. This bill is set for a second reading, and if passed, it will become law upon the signature of President Volodymyr Zelenskyy.

Future of Gambling Regulation in Ukraine

Should KRAIL be dissolved, the responsibility for regulating gambling will be transferred to the Ministry of Digital Transformation. Alina Plyushch, a partner at Kyiv-based law firm Sayenko Kharenko, highlighted the uncertainty surrounding the future structure of gambling regulation. “This is pending a further government decision on the creation of a new regulator under the digital transformation ministry’s umbrella,” Plyushch said.

She also noted the possibility that the Ministry of Digital Transformation might retain regulatory functions indefinitely. The exact duration and structure of this transitional regulatory framework remain unclear, leaving the future of Ukraine’s gambling industry in a state of flux.

As KRAIL continues its efforts to combat illegal gambling, the impending legislative changes pose significant questions about the long-term regulatory landscape for gambling in Ukraine. The outcome of the legislative process and subsequent government decisions will determine the next steps for ensuring a well-regulated and compliant gambling market in the country.

Source:

“КРАІЛ про обмеження доступу до 371 вебсайту, через які надавався доступ до нелегальних азартних ігор”. The Commission for the Regulation of Gambling and Lotteries (KRAIL). June 5, 2024.

Ukraine regulator blocks 371 illegal gambling sites. iGaming Business. June 6, 2024.

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In the middle of an international crisis, Ukraine is trying to improve its gambling regulations and maintain the market secure and safe. New changes have been proposed by the government, and if they’re accepted, banks won’t be able to lend money to self-excluded customers.

The Committee of the Verkhovna Rada on Finance, Tax, and Customs Policy proposed an amendment that will ensure banks are double checking if the individuals who are requesting lends aren’t self-excluded from betting, including both online gambling and various land-based casinos in the country. Those not on the list of self-excluded gamblers won’t be able to get credit from the bank. The amendment has not been approved yet.

Growing Rate

The Ukrainian Commission for the Regulation of Gambling and Lotteries (KRAIL) a few months ago announced that the number of self-excluded players is increasing, and that was concerning to all included parties in Ukraine.

From January to April this year, 245 people made it to this list. Compared to last year, when the entire list consisted of 315 people, and 2021 when there were only 195 people total, the number of 687 by the end of April was a massive increase.

This isn’t the first change of the gambling law in Ukraine in the recent period. Only last month, the new law regarding procedures required for organizations subjected to anti-money laundering and counter-terrorist financing risk was approved, and Ukrainian operators will have to pass more detailed inspections. Operators are warned about unscheduled inspections as well. The government’s action plan for 2023 included new KRAIL proposals, including a whole set of new regulations related to canceling and suspending licenses. One of the main points of discussion was whether the operators who are offering their services in occupied territories should continue working.

Future of KRAIL up in the air

KRAIL keeps working on new regulations, but its future is also uncertain. Mykhailo Fedorov, the Deputy Prime Minister of Ukraine, in May, submitted a proposal that can make KRAIL be replaced by the new regulatory body. Besides being a Deputy Prime Minister, Fedorov is also a Minister for Digital Transformation, and his main concern about the body is its failure when it comes to the late issuing of gambling licenses to operators.

KRAIL currently consists of a chairman and six members, and for a license to be approved, five members must be present at a meeting. When the war began, Volodymyr Zelenskyy, a President, signed the major decree “On the introduction of martial law in Ukraine”, which led to some KRAIL members being mobilized into military service, which prevented KRAIL meetings from happening.

Source: “Ukraine Gambling Regulations Self Exclusion”. iGaming Business. August 7, 2023.

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