SBC CIS has recently reported that the Head of the Ministry of Digital Transformation of Ukraine, Myhajlo Fedorov, registered a Bill that proposes to dissolve the Commission for Regulation of Gambling and Lotteries (CRGL/КРАИЛ), a regulatory body responsible for granting gambling licences, enforcing fair rules of the lawful operation of the gambling business in the country and leading various social programs, aimed at preventing and reducing the harm from overindulging in gambling activities for certain population groups or individuals at risk.
Ivan Rudy, the Head of CRGL, earlier expressed his concerns with the Bill not having been officially submitted to the Commission for a subsequent review. He then, however, proceeded with the legislation analysis and shared 5 key points that he believes are enough to refute the need to adopt the new Bill. Here they are:
- “According to the final provisions of the Bill, the Commission will cease to exist from the day the law enters into force, and the Cabinet of Ministers of Ukraine will only have one month to set up a new body to regulate gambling. What about the principle of continuity of power exercised by the state authority? That is, for the whole month, the entire industry is supposed to function without a proper regulation done by the state. My experience suggests that this month may well turn into two or more; it’s almost been three months that no new members of the Commission were appointed for vacant positions.
- Pieces of the necessary legislation that gambling operators currently rely on and are guided by, were adopted by CRGL and are working without any major problems. With the adoption of the Bill, the Cabinet of Ministers will be forced to rework the entire pool of legislation that was previously designed, reviewed and adopted by the Commission. I simply don’t see any feasible timeline for that rework to happen should the Bill dismantle the Commission. What is the practical point for the Government of the country at war, to develop and approve a whole new array of very specific regulations that already exist and are working instead of solving serious problems that should put an end to the war?
- In place of CRGL, the Bill proposes to create an authority without any special status. As many may be aware of, the Commission is a collegial body that requires quorum to be fully operational. Having another authority for regulating the entire gambling industry that consists of only one member is severely at risk of becoming corrupt. Separately, I should stress the fact that the Bill removes any possibility for a transparent and open competition to obtain a vacant position at CRGL. In my opinion, this is unacceptable and nullifies the main idea of the Presidential reform, which at one time, was guided by the principles of government transparency and fighting against corruption.
- The Bill provides for the possibility of submitting an application for self-limitation by electronic means of the Unified state web portal of electronic services. But there is an electronic way of submitting such an application, and we accept such applications from the very beginning. In order for citizens to be able to do this also through the Unified State Web Portal, no changes to the law are needed, and even more so, there is no need to liquidate KRAIL and create another body. This only requires cooperation with several bodies, and we are always open and ready for it.
- The Bill provides that the new body will “ensure” the administration of the State Online Monitoring System (SOMS), and not “perform” the administration of the SOMS, as it is currently stated in the current version of the Law. This looks too risky. After all, according to other requirements of the Law, which the Bill does not change, all responsibility for the implementation and operation of the SOMS rests with the regulator. The proposed change in wording masks a possibility for the future regulator to avoid responsibility for a failure in the SOMS operation, because it is possible to “ensure” the administration of the SOMS by transferring the administration rights to a third party, while it is stated in the Law that the administration of the SOMS can only be “performed” by the regulator itself.
As you can see, a closer look at the Bill clearly shows that its main goal is the liquidation of the Commission, while the Bill, unfortunately, does not solve any of the problems that currently exist in the gambling market — finalisation of the framework for the gambling taxation, and implementation of the State Online Monitoring System.
Everyone in the Commission sincerely hopes that this Bill will be properly evaluated by the members of the Parliament, as currently it does not solve any problem for the market.
At the same time, the Bill calls into question and has every chance to slow down the industry, which is already suffering from the unresolved problems that I’ve briefly mentioned above.
It’s true that there are challenges for the market itself — an open question on taxation and SOMS implementation — but will the liquidation of the current regulatory body solve all of these problems? All the problems listed above exist in all European states, we closely cooperate and study the experience of other countries. Even in jurisdictions, where gambling has been regulated for years, there are similar problems and they should be solved by improving the regulatory tools and frameworks, and not by liquidating one regulatory body and replacing it with a completely new one”, — concluded the current Head of the Ukrainian gambling regulator.
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