In a bold legislative move expected to reshape the regulation of gambling within Ukraine, the nation’s parliament voted for the dissolution of the country’s gambling oversight organ, KRAIL. The vote, which took place in the Verkhovna Rada, occurred on April 24 and stemmed from the presentation of draft law no. 9256d which called for KRAIL’s liquidation. Observers predict a sweeping transformation in the management and regulatory mechanisms of the Ukrainian gambling sector in response to this development.
The impetus behind this parliamentary decision is both social and economic, influenced heavily by the current wartime context. A notable moment that galvanized public and political scrutiny of the gambling industry came from a petition initiated by Pavlo Petrychenko, a soldier of the 59th brigade. Launched at March’s end, the petition quickly amassed 26,041 signatures, surpassing the 25,000 threshold which mandates presidential review. Its aim was to illuminate the deleterious impacts of gambling on both the Ukrainian armed forces and broader societal well-being.
In response, measures to constrain the nation’s online gambling sphere were declared in a presidential address on April 2. The President’s directive focused on enhancing the scrutiny of online gambling activities to better safeguard societal interests. This move builds on over a year’s worth of opposition about the regulatory processes guiding Ukraine’s gambling operations.
Deputy Prime Minister Mykhailo Fedorov’s efforts in May 2023 to usher in a draft law signaling the need for a new regulatory authority underscored criticism about KRAIL’s inefficiencies, particularly its sluggish pace in issuing gambling licenses. KRAIL, a collegial entity consisting of a chairperson and six members, required the presence of five members for a quorum essential for licensing procedures. With some members drafted into military service due to Russia’s invasion, the body faced deadlock, impeding its regulatory functions.
The parliament’s vote, with 272 lawmakers in favor, echoes Deputy Prime Minister Fedorov’s prior legislative thrusts; still, the bill awaits a second reading and presidential assent to be enacted into law. The proposal doesn’t merely envisage the termination of KRAIL but also encompasses broader prohibitory measures on gambling, such as advertising restrictions, protections for vulnerable individuals, and increased enforcement protocols.
Despite the official prohibition of online gambling in Ukraine since 2009, the industry was re-regulated in July 2020. The financial significance of this sector is non-negligible—Danylo Hetmantsev, chair of the parliamentary Finance Committee, reported via Telegram that gambling businesses contributed UAH2.2 billion in taxes during 2024 and UAH10.4 billion in the year prior. The government’s ongoing combat against illicit gambling operations, which included the seizure of UAH700 million from a leading gambling operator for tax evasion, is expected to intensify following this legislative turn.
Alina Plyushch, a lawyer with Sayenko Kharenko, analyzed the situation’s intricacies in an interview. She highlighted the need for meticulous regulatory approaches—which must balance military protection with economic sustainability—in the wake of Russia’s invasion. The complexities of curtailing online gambling are especially challenging, as it demands encompassing countermeasures against evasion tactics.
Post-KRAIL, the mantle of regulatory responsibility is poised to be shouldered by the Digital Transformation Ministry. Notably, Plyushch had anticipated such an arrangement potentially being temporary until a more permanent regulatory structure could be established under the ministry’s jurisdiction.
As Ukraine navigates its war-induced challenges, the direction of its gambling regulatory landscape is set to undergo a transformative phase. With KRAIL’s disbandment, the nation looks to the Digital Transformation Ministry to assume pivotal roles in the quest for a restructured and more effective oversight system.
