The Ukrainian government is seeking to overhaul its gambling legislation and taxation framework, with new proposals now open for public discussion. The initiative, announced by the state agency PlayCity, aims to align regulatory practices with the current market realities, enhance consumer protection, and create clearer conditions for legal businesses.
Since the legalization of gambling in Ukraine in 2020, the focus has shifted from merely regulating an existing underground economy to establishing a legitimate market. In 2021, the gambling sector contributed over 200 million UAH in taxes to the national budget, which has since grown to approximately 17 billion UAH annually, alongside an additional 2 billion UAH from licensing fees. This dramatic increase, over 80 times in five years, is attributed to the formalization of the industry and the introduction of a licensing model.
Despite these gains, the current regulatory framework is deemed inadequate for the market’s scale and structure. PlayCity officials noted that convoluted tax regulations disadvantage legal operators compared to their illegal counterparts, which evade both tax and regulatory obligations. Estimates suggest that nearly 50% of the gambling market remains unregulated, undermining the fiscal contributions of licensed businesses.
The proposed reforms encompass three main areas: enhancing player protection, addressing regulatory gaps, and updating the tax code. The government plans to shift from formal regulation to a more robust system of state oversight, including digital monitoring and player safety measures.
Key player protection initiatives include mandatory monitoring of gambling behavior, interventions for risky conduct, and options for players to set personal limits. This marks a significant step towards implementing responsible gaming practices.
To address regulatory deficiencies, the reforms propose stricter reporting requirements for service providers, enhanced oversight of online gambling, and measures to verify the connections of license holders with hostile states. Additionally, a unified state register for the gambling sector will be established as part of an online monitoring system, simplifying licensing procedures and transitioning to a data-driven oversight model.
For operators, the reforms will delineate violations of the law and corresponding penalties, distinguishing between minor infractions and serious breaches that could jeopardize player safety or state interests.
Changes to the tax code will introduce a flat income tax rate of 18% on gambling activities, eliminate double taxation for businesses, and clarify tax obligations for players regarding winnings. These adjustments aim to synchronize tax reporting with regulatory data and implement verification mechanisms for discrepancies in operators’ activities.
Officials from PlayCity and the Ministry of Digital Transformation expect these reforms to foster a transparent and manageable gambling market, ensuring stable budgetary contributions through synchronized digital monitoring and taxation systems.
The Ministry is open to public feedback on the legislative changes, with PlayCity advocating for an open dialogue with industry stakeholders and the public regarding the proposed amendments. Constructive suggestions will be considered in refining both legislative initiatives.
On December 4, 2024, the Ukrainian Parliament passed a law aimed at strengthening control over the gambling market, which included the dissolution of the Gambling and Lottery Regulation Commission (KRAIL). Following this, President Volodymyr Zelensky signed the law on January 4, 2025, leading to the establishment of PlayCity as KRAIL’s successor on March 21, 2025. The agency, led by former KRAIL deputy chief Hennadiy Novikov, has already made strides in combating illegal online casinos, blocking over 4,500 sites in 2024 alone, and has collected nearly 18 million UAH in fines from compliance checks.
PlayCity officially commenced operations on June 2, 2025, marking a new chapter in the regulation of Ukraine’s gambling industry.
Ukraine is set to reform its gambling legislation and taxation system, aiming to enhance regulation and player protection while addressing the significant unregulated market. The proposed changes, now open for public discussion, seek to create a transparent and accountable gambling environment.