It’s been a rough road for gambling in embattled Ukraine, where on April 24 parliament voted by 272 out of a possible 450 votes to disband KRAIL, the Commission for the Regulation of Gambling and Lotteries, iGaming Business reported. Its job will be given to the Digital Transformation Ministry.
A second reading is needed before final passage. It can then be signed into law by the president.
This move by the Verkhovna Rada to pass Draft Law No. 9256d follows weeks of intense criticism of gambling in the battle-weary nation by thousands of the soldiers defending it from the Russian invasion.
In a petition they blamed gambling—especially the online variety—for sapping the military’s fighting spirit and lowering the morale of soldiers who become addicted and lose entire salaries on one of the few pastimes available to them to fight boredom in between intense periods of combat. This caused some soldiers to sell military hardware, such as drones, to get out of debt. The petition advocated banning online gaming.
Whether the vote was influenced by the death in combat of the soldier who died weeks after he filed a petition calling for the ban of online gambling is unknown. Online gambling was forbidden in the country between 2009-20, when it was allowed under regulations.
The elimination of the regulator won’t mean that gambling will be banned, but it will mean it will be regulated in a different way and by a different panel.
The commission has six members and a chairman. A quorum of five members is required to conduct business. It has met intermittently since the Russian invasion began two years ago because several members are serving in the military.
The petition was the idea of Junior Sgt. Pavlo Petrychenko, serving in the 59th brigade on the front lines. On April 15, Petrychenko was killed in combat in Donetsk Oblast.
He wrote that his purpose was to direct attention “to the harm that the gambling business causes to the Ukrainian army and Ukrainian society.”
He posted it on the president’s website at the end of March and it fired the imagination of the nation, obtaining more than 26,041 signatures. Any petition that gets more than 25,000 signatures requires the president to consider it.
Shortly after the petition passed that threshold, on April 2, President Volodymyr Zelenskyy proposed a plan for restrictions on gambling. Saying he was motivated to “help protect the interests of society,” Zelenskyy ordered officials to tighten controls. On April 20 he issued a decree banning online gaming for the military while martial law is in force.
KRAIL’s approach to regulating the gambling sector has come under continued attack for many months. Almost a year ago Deputy Prime Minister Mykhailo Fedorov submitted a bill that proposed abolishing the commission and replacing it. He cited the failure of the commission to issue gaming licenses in a timely manner. It was also the subject of a scandal when it gave a license to 1XBet, a company with ties to the Russian Federation.
Under the new law, operators will be forbidden from using images of soldiers in marketing materials, gambling sponsorships will be illegal and serving military will be forbidden from entering gambling establishments during martial law. The country is under martial law due to the invasion.
Advertising of gaming will also be forbidden, and measures to protect vulnerable populations will be adopted.
Alina Plyushch, a partner at the Kyiv law firm Sayenko Kharenko, told iGB that it will be difficult to shut down online gambling.
“We believe that it is not as difficult to ban people from physical casinos as it is to ban them from online casinos.” She added, “Restriction of access to online casinos requires a comprehensive consideration of potential ways of avoidance.”
Plyushch continued, “Since the Russian full-scale invasion, almost every draft law is a kind of dilemma as every change in the regulatory framework needs to be balanced to ensure the interests of both the army and the economy.”
