Ukraine’s Gaming Market Presents New Opportunities

Once a vibrant market, gaming was banned in Ukraine more than 10 years ago. Starting from scratch will give the industry time to do it right and creates opportunities for investors, according the experts in the region.

Ukraine’s Gaming Market Presents New Opportunities

After being generally prohibited for more than a decade, a potential billion-dollar gaming market is restarting in Ukraine. The time is now for investors to consider entering this significant, diverse market. As gaming operators begin to return, what can they expect in terms of regulations and opportunities?

At the time the ban was introduced in 2009, revenues from gaming were approaching US$1.1 billion per year, approximately 75 percent of which was from casinos and slot machines, and annual revenues in the sector had increased more than threefold between 2005 and 2009 (as per statistics provided by the German Corporation for International Cooperation GmbH). With the growth of online gaming capabilities and Ukraine’s fast-expanding IT sector, there is the potential for the gaming market in Ukraine to quickly match and exceed its 2009 size.

What Does the New Law Say?

The new gaming law, which entered into force in August 2020, now permits casinos (physical and virtual), slot-machine halls, betting (except regarding virtual sports and virtual events), and online poker games. Lotteries are regulated by a separate law, which provides for a state monopoly and limited access for investors.

Physical casinos and slot machine halls generally must be located within four- or five-star hotels. The government determines the star rating for Ukrainian hotels, and may also designate special gaming zones in the future.

There are some restrictions on who may be the shareholder or ultimate beneficial owner (UBO) of a gaming operator. The operators’ shareholders must not be residents of certain sanctioned countries, specifically Russia, Iran and North Korea. The UBOs of gaming operators also cannot be Russian residents.

There are also certain capital requirements for operators. Gaming operators must have a company in Ukraine, and the charter capital of this company must be at least approximately US$1 million. Additionally, the gaming operators must obtain a bank guarantee or maintain reserves of a minimum of at least approximately US$1.5 million.

Key Considerations and Market Insights

Before beginning gaming activities, operators are required to obtain a license from the Gaming and Lottery Commission. License fees for physical casinos vary by location, with fees lower for casinos located outside the capital, Kyiv. License fees for slot machine halls, betting, and online activities are fixed regardless of location. In addition, investors may obtain a free 10-year investment license, which includes permission to conduct physical games in casinos, if they construct a five-star hotel with no fewer than 200 rooms (in Kyiv) or 150 rooms (outside Kyiv).

License fees are relatively high compared to some of Ukraine’s neighbors. For example, the fee for the first license, which was issued to an online casino operator in February 2021, was approximately US$850,000 for the first year of the license. It is expected that the size of Ukrainian license fees will limit gaming activities to fewer, and presumably larger, operators. For example, Hilton Kyiv is understood to have expressed interest in opening a casino, while the Fairmont Grand Hotel in Kyiv has already received permission for gaming activities to occur on its premises.

The commission is actively reviewing applications, but has already rejected several of the early submissions. The first company to receive a license had its application rejected three times before the license was granted. Although the reasons for rejecting the applications are often of a procedural nature, applicants should pay particular attention to proving the origins of their online gaming systems (such as software), as well as the source of funds for their activities. But working with competent counsel when preparing the application should help to avoid unnecessary rejections and delays.

In addition to obtaining a license, there are certain other requirements for gaming operators. Operators of online activities will be able to accept bets from players located within and outside Ukraine, although the online systems for such games (e.g., servers and other equipment) must be located within Ukraine. Bets and payouts must be made only in the national currency, Ukrainian Hryvnia / UAH. Casinos and slot machine halls are required to maintain certain numbers of tables and slot machines, respectively, and all online casinos, poker games, and bets must be conducted through a Ukrainian domain (i.e., URLs ending with “.ua”).

Common issues with opening gaming operations in a new jurisdiction include technology and payment challenges. An operator must ensure that its technology platform is able to verify the location of online players to ensure no ineligible persons, or persons from ineligible countries, are allowed to participate. Both brick-and-mortar and online gaming establishments can find it difficult to provide a range of payment and e-wallet loading options given system integration requirements, local and foreign legal requirements, varying payment card network rules, data privacy and security issues, and local systems requirements. It is important to take these issues into account when developing the technology and payments platforms to ensure the most effective, compliant, and full-featured rollout.

Tax Issues

The government is in the process of finalizing how gaming activities will be treated under Ukraine’s tax regime. It is expected that the approach will involve a corporate income tax at a rate of 18 percent, as well as the tax on gaming revenue at a flat rate of 10 percent for the revenue less payouts from gaming activities and lotteries. Moreover, players’ income from large winnings (more than approximately US$1,700) will be subject to the personal income tax plus the military duty (combined 19.5 percent).


Given that the issuance of licenses has begun, it is expected that operators will be able to enter the market quickly. A week after the first grant, two other licenses were approved for online gaming operators, and Parimatch received the first license for betting activities in early March.

So far, licenses have been largely issued for operators of online activities, as the government still needs to pass secondary legislation, including technical regulations for gaming equipment, before casino and slot machine hall owners will be able to apply for licenses. This legislation is expected to be adopted relatively soon, and these types of licenses will begin to be issued shortly thereafter.

When deciding to enter the market, foreign investors may choose whether to build their own establishment, operate entirely online, or partner with existing hotels and resorts. In some cases, operators may benefit from lower license fees if establishments are located outside of Kyiv, including in ski resorts in the Carpathian Mountains or along the Black Sea Coast. Developments in this sector are happening quickly, and Ukraine is expected to soon become an important market in the gaming industry that will be of interest for foreign market players.

Note: This article does not contain legal advice.

Articles by Author: Rob Schantz, Linda C. Odom and David C. Rybicki

Rob Shantz is a partner and head of the corporate practice at Redcliffe Partners, a Ukrainian law firm. Learn more at Linda C. Odom and David C. Rybicki are partners in the Washington, DC office of K&L Gates LLP, global counsel across five continents. Learn more at