The Ukrainian government has issued licenses to three companies—”MSL,” “UNL,” and “Patriot”—to operate lotteries, marking a significant regulatory shift in the sector. Each company has contributed ₴24.2 million to the state budget as part of the licensing fees, totaling over ₴72 million, according to the State Agency PlayCity.
For more than a decade, the lottery sector in Ukraine operated without formal licenses or effective regulation. The introduction of these licenses establishes a framework for oversight, aligning the market with new regulatory conditions set forth by the government last year.
The newly issued licenses come with specific requirements aimed at enhancing transparency and accountability. These include:
- Mandatory electronic reporting to PlayCity;
- Real-time monitoring of sales and payouts;
- A unique QR code for each lottery ticket and terminal.
This regulatory framework is designed to ensure continuous government supervision of operators, thereby reducing the risks of ticket sales manipulation and payout discrepancies.
For consumers, these changes provide a means to verify the legitimacy of sales points, enhance transparency in lottery operations, and ensure the validity of purchased tickets and the reliability of prize payouts. For the government, the licensing system promises predictable revenue streams, a return of oversight in the sector, and a reduction in illicit practices.
The licenses are valid for the duration of martial law and one year thereafter, with a minimum term of three years. This is a departure from the ten-year licenses previously stipulated in the relevant legislation, allowing for flexibility in adapting to market conditions.
In collaboration with PlayCity, the Ministry of Digital Transformation is also preparing legislative amendments aimed at reducing barriers for foreign operators entering the market. Proposed changes include shifting from a competitive bidding process to an electronic auction system, where the highest bidder secures the license.
Additional recommendations include:
- Removing the term “state lottery” and the concept of “state monopoly” from legislation, thereby positioning the state as a regulator rather than a formal owner;
- Clearly distinguishing between lotteries and gambling to prevent lotteries from being used as a cover for betting activities or casino-like operations;
- Prohibiting lottery types that closely resemble betting, such as “toto” lotteries;
- Restricting the use of gaming equipment or casino-like decor in lottery operations.
These proposed changes aim to create a more transparent and competitive licensing process within the lottery industry.
The issuance of lottery licenses in Ukraine represents a significant shift towards regulatory oversight in a previously unregulated sector. The new conditions aim to enhance transparency for consumers and ensure accountability among operators.
Source: State Agency PlayCity