Ukraine Moves to Dissolve Gambling Regulatory Body

Mounting Concerns Prompt Legislative Action

The push to dissolve KRAIL gained traction following a compelling petition by Pavlo Petrychenko, a soldier from the 59th brigade, which quickly garnered over 26,000 signatures.

This petition highlighted the adverse societal impacts of gambling, catching the attention of policymakers and President Volodymyr Zelenskyy alike. In response, President Zelensky has been vocal about his commitment to tightening regulations around the gambling sector to better protect societal interests.

Amidst ongoing military conflict, concerns about gambling’s impact on morale and security have led to decisive actions, including President Zelensky’s recent decree to ban gambling in the military until the end of martial law.

Criticism and Legislative Developments

The move to dismantle KRAIL follows criticisms regarding its effectiveness as a regulator, particularly concerns expressed by Deputy Prime Minister Mykhailo Fedorov about the delayed issuance of gambling licenses.

Draft law Number 9256d, which received backing from 272 lawmakers, seeks not only to disband KRAIL but also to introduce stricter controls over the gambling industry, including a ban on advertising and enhanced protections for vulnerable populations.

The Economic and Regulatory Context

The legislative changes occur against the backdrop of significant financial contributions from the gambling sector, with a reported UAH 2.2 billion ($56 million) in taxes for 2024. Despite these contributions, the regulatory landscape has been tumultuous, with online gambling undergoing re-regulation in July 2020 after a prohibition that began in 2009.

The proposed dissolution of KRAIL would shift regulatory responsibilities to the Digital Transformation Ministry, aiming for a more streamlined and effective regulatory process.