TITLE: Ukraine's Ministry of Digital Transformation Proposes Legislative Changes to Regulate Gambling Industry
BODY:
On February 26, 2025, Ukraine's Ministry of Digital Transformation (Мінцифра) published two draft legislative proposals aimed at strengthening regulatory oversight and taxation of the gambling industry.
Since the legalization of gambling in 2020, the Ukrainian market has expanded significantly, with annual budget revenues increasing from approximately ₴200 million in 2021 to approximately ₴17 billion currently. However, the regulatory and tax framework has not kept pace with market growth, creating contradictions that make it easier for illegal operators to compete than legal ones.
The first draft law amends the Gambling Act to transition from formal oversight to continuous digital monitoring. Key provisions include mandatory tracking of player behavior by gambling organizers to identify signs of problem gambling; personal betting limits and self-exclusion options for players; and a tiered violation framework with proportionate sanctions, ranging from fines and remediation requirements for minor breaches to licence revocation for serious violations.
The second draft amends the Tax Code to establish clearer taxation rules. Current provisions create double taxation, as gambling income tax and corporate income tax apply simultaneously to the same economic base. Additionally, winnings tax is calculated on gross payouts rather than net player gains, resulting in players paying tax on their own deposited funds. The proposals establish a single 18 percent tax rate on gambling income, eliminate double taxation, and define winnings tax as payable only on actual player profit (the difference between deposits and winnings). Tax reporting will be cross-referenced against the State Online Monitoring System, with audits triggered by significant discrepancies.
The Ministry invites market representatives, experts, and stakeholders to participate in public consultation on these legislative initiatives. Full draft texts are available on the Ministry's website.