Eastern Europe
Ukrainian gambling: to be, or not to be, that is (already not) the question
This article has been created with the help of its author, Oleksandr Aleksyeyenko (Partner at Marchenko Partners) and Sviatoslav Henyk (Senior Associate at Marchenko Partners)
After significant and protracted deliberations, Ukraine finally legalized gambling activities back in 2020. The Law on the governance of the organization and carrying out of gambling activities became effective almost half a year ago. As of the date of writing this article, already 3 licenses have been granted to online casinos for their gambling activities to be performed in the future.
There is still a number of issues and, despite all efforts, the gambling market seems to be standstill except for the mentioned minor movements by local online players obtaining licenses. As of now, it seems that no big international market players are entering the newly born Ukrainian gambling market. So, let`s discuss whether it is all going somewhere and if that somewhere is in the right direction.
Ukrainian gambling market background
To see a broader picture, one should unveil the historical background of the current gambling market legalization in Ukraine. First of all, it’s worth mentioning that the Ukrainian gambling market has been actually reopened, but not developed from scratch.
The previously operating Ukrainian gambling market was not so much a success story as one might imagine. There were no huge and fancy casinos like in Las Vegas, but rather a market consisting of different establishments, some of them even legal and compliant. They were shut down by decisive moves of the state authorities in 2009 due to the lack of comprehensive regulations and effective control over their execution, which irreversibly led to negative consequences. As a result, the mentioned flaws contributed to the growth of black and grey gambling services markets. Moreover, the lack of strict rules and their enforcement also formed a public opinion that the gambling market was something antisocial and dirty. Ukrainians still remember well those times when slot machine halls literally surrounded public transport stops and were filled with some not exactly wealthy people giving up their last money in pursuit of a snatch.
At that time, Ukrainian authorities decided to use muscles instead of brains and banned all gambling activities instead of introducing reasonable regulation and taking the situation under control. Thus, starting from mid-2009, all gambling operators were forced to leave the wild, but rapidly growing market. However, as one may guess, the Ukrainian gambling ban was not far from the Prohibition in the United States in terms of its results. Ukrainian gambling market simply went undercover, depriving the Ukrainian budget of significant contributions previously made by the industry.
What are the current challenges for the Ukrainian gambling market?
Not so long ago, a logical step was taken by Ukraine and the gambling activities ban was lifted. However, same as in the case with the Ukrainian land market, things are not perfectly smooth and there are still some obstacles in place.
For instance, while three online casinos have already paid for and received licenses, they still can`t fully realize and enjoy the rights of an online casino operator. The reason is that the necessary regulations applicable to certification of the equipment to be used in casinos haven`t been adopted yet. Additionally, there is still a certain lack of clarity in terms of taxation of gambling activities. Some say that a specific volume-based tax will be introduced. However, considering that the licensed operators can`t get any revenues in the absence of the regulations to certify their equipment, the issue of taxation seems to be too far to think about.
Apart from that, one should note that this time Ukrainian government decided to seriously take advantage of the gambling market by imposing comparatively high license fees, financial thresholds, and location requirements (for offline casinos). For instance, the license fee is around USD 1.1 million for online casinos (for 5 years) and USD 10 million for offline casinos if based in Kyiv (additional equipment fees will also apply). Moreover, a gambling operator must have a share capital of at least USD 1.1 million and a deposit account or Ukrainian bank guarantee for USD 1.2 million.
As to the location requirements, under the new legislation, casinos can be opened only at 5-star hotels with at least 150 rooms in Kyiv, 4- and 5-star hotels with at least 100 rooms in other regions, out-of-town resorts with a total area of at least 10,000 m2 or “special gaming zones” within territories to be further defined by the Ukrainian government.
Under the new law, various restrictive regulations of a similar character also apply to betting, slot machine halls, and online poker activities.
Opportunities and additional obligations for Ukrainian gambling operators
It is worth mentioning that there are some opportunities for the new market players. The new law provides that such players may obtain investment licenses. Holders of such licenses will be exempt from license fees for 10 years if they build a new 5-star hotel with at least 200 rooms in Kyiv or 150 rooms in another Ukrainian region.
Ukrainian gambling operators will be also obliged to follow certain gambling standards and policies aimed at preventing gambling addiction. The government plans to launch a state-owned online monitoring system. The system will perform a real-time oversight and control of the Ukrainian gambling industry.
To sum it all up, it’s an important aspect that different people might make different conclusions as to the above. Pessimists might claim that this time, the gambling market launch in Ukraine has little chance to become interesting for the largest international market players. However, if evaluated by opportunists, entering the Ukrainian gambling market is definitely worth a shot.
High financial thresholds and strict regulations ensure that the market will not slip into putting dirty slot machines centered around metro stations. It is more likely that the Ukrainian gambling industry will at least somehow resemble what one may observe in wealthy locations like Las Vegas. This puts confidence into the minds of potential investors because the government will not be in a position to cut its own leg by banning a well-governed and budget-supporting industry.
The readiness of the local online casino market players to pay for the licenses which can`t be yet used proves the above statement to be true. It also leads to a conclusion that gambling investors should already be on their way to Ukraine in order to be in a time when the market starts to operate and extreme profits flow into the hands of the few pioneers.
Eastern Europe
EveryMatrix opens new eco-friendly HQ in Bucharest as it announces 1,000th employee
EveryMatrix has officially inaugurated its new development hub, located at the heart of Bucharest, Romania, while also reaching a milestone of 1,000 employees.
In collaboration with STRABAG Real Estate, construction on the cutting-edge business hub commenced in 2022 with the building now open, providing the tier-1 iGaming supplier’s Bucharest-based team of 400+ staff and growing with a modern, eco-conscious workspace.
EveryMatrix has also surpassed the 1,000-employee mark, just 16 years after it was founded in 2008. The company’s purely organic growth has sky-rocketed in the last four years, with the number of staff increasing by 90%, up from 525 employees in 2020 to 1,000 today. The business announced record profitability in 2023.
The new office is situated near University Square, the city’s focal point with the central location streamlining commute times, making it easily accessible to employees, clients, and partners.
Equipped with a large in-house gym, spa, pool, garden and state-of-the-art amenities across six dedicated floors, as well as free electric car charging points for all staff to encourage switching from fossil fuelled transport, Arghezi 4 was designed to offer the best working experience and environment, catering to the diverse needs of EveryMatrix’s employees.
Click here for an exclusive glimpse into the office and the benefits and features of the building’s beautifully crafted interiors.
The building meets rigorous LEED V4 Gold green certification using sustainable construction practices to minimise environmental and human health risks. Employing building materials and construction methods that are not harmful to the climate and environment, the new office sets a new standard for corporate and environmental responsibility.
Ebbe Groes, Group CEO, EveryMatrix, said: “Building our own HQ has been very exciting but has equally involved a great deal of work. This is our first purpose-built office here, so its opening, combined with our 1,000th employee represents a special moment in the company’s 16-year history.
“We are continually investing in the development of the business and its culture for both the well-being of our employees and to futureproof EveryMatrix, and I know from speaking to many of the teams here that it ticks all the boxes for our colleagues’ happiness.”
Marius Iancu, Global Head of HR, EveryMatrix, added: “This building is not just a new office; it also serves as an important part of our talent acquisition strategy from 2024 onwards. Every one of its elements has been designed to position EveryMatrix as an employer of choice and provide our teams with a work-life experience that goes beyond expectations.”
Eastern Europe
Wazdan boosts Romania footprint with Totogaming deal
Wazdan, the gain-focused developer behind some of the world’s most rewarding casino game experiences, has further bolstered its presence in the regulated Romanian market after partnering with Totogaming.
The agreement has initially seen Wazdan provide 12 of its most popular titles to the online casino, including Magic Spins™, Hot Slot™:777 Rubies, Sizzling Eggs™ and the player-favourite Coins™ series.
Following the first tranche of games, more will be rolled out over the coming months as the supplier continues to deliver proven titles that resonate well with local customers.
It is the latest commercial expansion by Wazdan, which has enjoyed a strong start to the year, launching a number of key titles as well as undergoing a rebrand, which was revealed at ICE London.
Andrzej Hyla, Chief Commercial Officer at Wazdan, said: “Our commercial expansion into key European regulated markets is a focal point for us, and we’re very happy to further grow our Romanian footprint in partnership with Totogaming.
“Our products have been well received in Romania already and we’re confident that we can add more value to Totogaming’s casino offering.”
Totogaming’s Product Directions Development Unit Manager, Kamօ Mayilyan said: “Wazdan has a reputation for creating exceptional, tech-friendly products and we’re delighted to add 12 of its best-performing games to our online portfolio.
With a long-term approach to our rollout collaboration, we look forward to enjoying an exciting relationship together.”
Eastern Europe
Betano and the Romanian Football Federation extend partnership until 2030
Betano, Kaizen Gaming’s premium brand, announced the extension of their strategic partnership with the Romanian Football Federation (FRF) until 2030. The announcement represents a major milestone in this partnership and demonstrates Betano’s and FRF’s shared commitment to promoting excellence in sport in Romania.
Over the past two years, Betano and FRF have combined their vision and expertise for the growth of the Cupa Romaniei Betano, one of the most loved football competitions in Romania. The current competition season introduced a new format of the Cup, bringing the game closer to the fans in the stands and at home.
As part of the collaboration, Betano has been actively involved in marketing efforts, working alongside an extensive ecosystem of partners, including FRF, media partners and representatives of the teams that qualified for Cupa Romaniei Betano’s group stage. Their common goal is to develop campaigns that will increase the visibility of the competition and facilitate engaging football fans even more. The latest initiative is the development of the TV and digital show Bate Cupa. This is the first show putting a spotlight on all 24 qualified teams and showcasing the players’ skills in an unconventional and entertaining way.
Both Betano and FRF are dedicated to delivering even more initiatives to support Romanian football within this year.
“During the past two years, we have shared a common vision with the Romanian Football Federation to take Cupa Romaniei Betano to new heights. The new format of the competition has been a great step down that route. We believe that the enthusiasm and the prestige surrounding Cupa Romaniei Betano will rise even higher. The new multi-year agreement shows the belief we have in this competition and our burning passion for football. At Kaizen Gaming we remain committed to supporting the growth of sports in Romania with integrity and responsibility”, said Julio Iglesias, Chief Commercial Officer of Kaizen Gaming, owner of Betano.
On his part, the President of the FRF, Răzvan Burleanu, commented: “This is a special moment, as it marks the longest extension of a partnership ever recorded by the FRF – a 6-year extension of our collaboration with Betano for the Romanian Cup. This new contract reflects the mutual trust between the Romanian Football Federation and Betano, as well as the recognition of our partnership’s essential contribution to the development and promotion of Romanian football. Together, we aim to take the Betano Romanian Cup to another level and consolidate the position of this competition as one of the most important sports events in our country. Our work with Betano reflects our common commitment to promoting sports values. One of the remarkable achievements of this collaboration is Betano’s sustained effort in marketing projects dedicated to increasing the visibility and popularity of the Betano Romanian Cup”.
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