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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