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Ukraine’s gambling regulator is preparing to choose who will lead it into the next four years, as parliament works to settle disputes over the process and finally deal with long-running tax problems.
Last week, the Ukrainian government launched a competition to select the next chairman of the Regulatory Commission on Gambling and Lotteries (KRAIL).
The current and first ever head of the commission, former anti-terrorism operative Ivan Rudy, was elected in a temporary capacity with a shorter-than-usual term. The new appointee should be awarded a four-year contract.
The contest will be run by the National Commission on Senior Civil Service, which will host a series of interviews, select and recommend three candidates for the approval for the Cabinet of Ministers.
The process of approving a new commission has been repeatedly delayed by inconsistencies in the 2020 Gambling Law.
One article of the law says that the parliament (Verkhovna Rada) should vote for and determine the composition of the commission, while another gives corresponding rights to the Cabinet of Ministers.
This discrepancy should be fixed by the long-awaited 2713-D law which, if voted for, will give the Cabinet of Ministers exclusive powers to appoint members of the gaming commission, as well as solve other important issues related to taxation.
Ukrainian gaming businesses are paying much higher taxes than had been envisaged, due to lengthy delays in replacing the old tax code.
Current laws presuppose an 18 percent income tax and a 19.5 percent winnings tax, coupled with the extremely high gaming and licence fees introduced by the new gaming law.
The new 2713-D law would set a 10 percent tax on gross gaming revenue across all verticals, including lotteries, introduce a tax-free threshold on player winnings of UAH48,000 and abolish triple licence fees for betting, online casinos and gaming machines.
The draft has already passed the Parliamentary Committee and is expected to be heard in Verkhovna Rada in early November, although a recent attempt to pass a very similar law failed and the bill received more than 150 amendments.
Meanwhile, the contracts of the gaming commission leadership expire on December 4, so the new members have to be elected by then otherwise industry development may literally stop. The commission’s approval is required not only for major business activities, but even for small operational decisions like adding new gaming equipment.
It is still unknown if existing staff will keep their positions. Reports in the local industry media have lauded Ivan Rudy for providing society with a positive number of licences issued, fees and taxes collected and illegal operations abandoned during the past year.
However, his tenure is blighted by a criminal corruption case against his deputy, Yevhen Hetman, who has been accused of taking a $90,000 bribe and is currently under house arrest after paying $190,000 in bail.
