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Eastern Europe

Lack Of Professional Approach To Legalization Of Gambling

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The necessity of legalization of gambling in Ukraine has been the topic of interest for a long time. The new government, at the initiative of President Zelensky, has been trying to do this for almost a year now. Experts gave hundreds of comments about this process, journalists wrote dozens of articles, and deputies held many meetings of various working groups. In general, the relevant bill has undergone a number of changes and for a long time has been evolving step by step to an increasingly acceptable form: the general opinion of the market is that the law should be the same for everyone, everyone is ready to certain compromises, and even a high fixed cost of licenses is considered acceptable when the tax on gross gaming revenue (GGR) is abolished. But today the improvement of the bill hit up against the interests of the lottery pool of deputies, who are trying in every possible way to maintain the monopoly position of the lotteries and the associated gray schemes of work of other types of gambling. For this reason, the bill 2258-d on second reading runs the risk of entering the session hall with a number of fundamental problems that will simply nullify the positive effect of the legalization of gambling in Ukraine.

The motivation of the deputies from the lottery circle is obvious, they simply work off the corrupt rent of their patrons. But the motives of the deputies close to President Zelensky are not clear. In case of collapse of legalization or failure to get the expected results, this initiative will turn into a pile of stones that will be thrown at the President by both the opposition and other enemies without hesitation. Especially considering the fact that the President took this issue under his personal control.

Two main factors have caused the current unfavorable situation regarding the legalization of gambling in Ukraine: 1) the subjectivity of certain influence groups (strongly represented by the lottery pool of deputies), and 2) an exclusively theoretical understanding of the mechanism of work and specific features of the gambling business, which can be observed in the statements made by the head of the relevant committee, Daniil Getmantsev. Thus, instead of a broad discussion with future gambling operators, which could contribute to the development of a realistic draft law, we get a substitute for lottery “wishlist”, and an ordinary incompetence.

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It will take more than one article to describe all the mistakes of legalization of gambling “in the Ukrainian style”. But nevertheless, the most striking moments can be singled out, without the resolution of which all the previous work will go down the drain.

So, the biggest problem is that the work on the relevant law is carried out without regulating the tax aspect of the organization of gambling. This approach may result in gambling operators paying taxes of 50-60% of profits for doing business legally. In this case, legalization will remain only on paper, as well as the long-awaited income to the treasury. Therefore, it is now extremely important to start a broad discussion on the tax burden for the gambling business. Since the budget of Ukraine needs fast money, and setting up an online monitoring system to track gross gaming revenue (GGR) requires considerable amount of time and specialist training, it would be logical to keep high license fees, but abolish the GGR tax. To understand the numbers, we want to remind you that for one license for 5 years, gambling operators in Ukraine will have to pay (ed. – take into account currency rate fluctuations): a casino – from $5.8 million to $20 million, depending on the number of rooms in the hotel; bookmakers – more than $21 million; lottery distributors – $14.7 million; gambling rooms – $145 thousand; online casinos – $2.4 million. At the same time, legislators plan to establish the GGR tax in the range of 18-25%, in spite of the bill 2713-3, which abolishes the tax on gross gaming revenue (GGR).

In general, world experience provides a choice between two options – either a high license fee or a GGR tax. More precisely, with a GGR tax a license fee may be levied, but then its amount is set at a very low level. In fact, a high fixed license fee is a tax on gross revenue paid in advance. Here are some examples from world experience.

In Britain, for example, a one-time fee for applying for a gambling license is €5,730, and a staff/ management license is about £330. The head of a gambling establishment is also obliged to pay an annual fee to ensure that his current license continues to be valid. The annual license fee depends on the gross turnover of the company. Gambling in England is subject to two taxes: 15% tax on total gaming revenue, and 18% income tax.

In the Netherlands, taxation on the organization and conduct of gambling is also quite high. Casino operators must pay a 29-percent gross revenue tax on games. In addition, they must also contribute 1.5% to the development of the gambling association and 0.25% to the fund against drug addiction.

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Swedish casinos are obliged to pay a tax of 18% of their total gaming revenue. For doing business in the country you also need to purchase a license. It can cost from 6 to 70 thousand euros.

In Malta, the gaming tax makes up 5% of the revenue generated from certain gaming services during the relevant tax period. The tax on gaming devices in Malta varies from 12.5% to 30% for different types of licenses. Malta gambling management requires a company applying for a gaming service license to have a minimum share capital from 40 thousand euros to 100 thousand euros, depending on the type of gambling establishment in terms of profitability.

In France, the rules for calculating tax rates are as follows: the gambling turnover tax is 8.5%, and income tax is additionally paid at the standard rate of 28%.

In addition to taxes, all casinos also pay certain fixed fees. So, the budgets of municipalities on a daily basis receive 12 euros from the first roulette that opens and 6 euros from each subsequent roulette that opens.

Thus, the tax on GGR is usually used in those countries where there is no license fee or it is symbolic. In most countries where gambling is legalized, the authorities understand that gambling brings sufficient revenues to the budget, but it requires an adequate tax base.

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To introduce the GGR tax, an optimal monitoring system is needed. It shouldn’t be overloaded, the way our parliamentarians do this, striving to stuff everything possible and impossible into monitoring. This approach is an evidence of a superficial and purely theoretical knowledge of the authors of such ideas. For the GGR tax, the most important thing is to control the entry and exit of funds.  For example, if 2 million UAH was brought during quarter, and 1.8 million UAH was given away as wins, then out of 200 thousand the GGR tax will be calculated. Everything is extremely simple. It is better to transmit information in the online monitoring system in non-personalized form and in a package, rather than in real time format and with all the data about the player, because otherwise, any halting will lead to an interruption in the operator’s work or to an unintentional violation of the law. But until such a simple and effective system is offered, it is better to use a high license rate and not charge the GGR tax.

If the gambling business is nipped in the bud, then the budget will not get any money. Therefore, the philosophy of the attitude to this type of business needs to be changed, it is necessary to create an adequate tax base and equal conditions for all operators. In response, the state will receive both substantial revenues to the budget and substantial amount of money for charity. Historically, gambling money goes to support social projects. For example, in France, theaters were built on taxes from the organizers of gambling establishments, and a famous opera house was built in Baden-Baden (Germany) on the tax revenues from the gambling industry. In the Netherlands, the representatives of the gambling industry sponsor the football championship, and in Canada – the annual stage of Formula 1 auto racing. In the USA, casinos finance basketball and hockey clubs.

In many countries, the distribution of tax revenues from the gambling business goes under special budget items. In Denmark, 65% goes directly to the Ministry of Culture and is directed to the development of sports and cultural life. In Finland, profits from lotteries and casinos are directed through the Ministry of Education to finance the development of national culture, and state revenues from betting on horse races are used to stimulate the development of national horse breeding and to conduct equestrian competitions.

For centuries, the authorities of various states have been convinced that human passions, including excitement, can’t be eradicated and prohibited, and therefore the only adequate solution is to find a reasonable compromise between the state, business and player. Many European countries have accepted such a philosophy a long time ago, and it’s time for Ukraine to finally take this path by creating a competitive market that will: a) be attractive to foreign investors; b) create hundreds of thousands of well-paid jobs, and c) replenish the budget with tax payments.

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Eastern Europe

Amazon Games Expands Global Footprint with New Development Studio in Europe

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Amazon Games announced it has opened a new game development studio in Europe, based in Bucharest, Romania. The studio expands Amazon’s commitment to developing and publishing games as it joins the ranks of the existing development teams in Orange County, Montreal, San Diego, and Seattle. The new studio will focus on supporting Amazon Games’ diverse portfolio of games now and in the future. Amazon Games is actively hiring to build out the talented team, with many active roles open now.

“Amazon Games is focused on developing and publishing great games, and we have an ambitious long-term roadmap in front of us,” said Christoph Hartmann, VP of Amazon Games. “Expanding our internal development teams into Europe was a natural next step for us as we tackle our broad portfolio. Bucharest is known as one of the top emerging European cities for game development and we look forward to tapping into the rich talent pool.”

Amazon Games has hired industry veteran Cristian Pana to lead the studio. Cristian brings more than 20 years of experience building video games, most recently serving as the Managing Director at Ubisoft Bucharest. Cristian’s experience spans some of video games’ biggest games and franchises, including Tom Clancy’s The Division, The Crew, Far Cry, and Avatar and diverse genres, from driving games, action adventure open world games to shooter RPGs.

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“I’m thrilled to join Amazon Games at a time when the team is actively building across an exciting roadmap,” said Cristian Pana, Studio Head for Amazon Games Bucharest. “I’ve built and led outstanding teams in the past and I know this area of Europe is a hot spot for some of the very best talent in gaming.”

The new studio supports Amazon Games’ vision of developing and publishing games that foster community in and around its games. The expanding portfolio from Amazon Games includes two launched live-service games, New World and Lost Ark, announced projects including Tomb Raider, The Lord of the Rings, and Throne and Liberty, as well as unannounced projects from our San Diego and Montreal studios, and the independent studio Glowmade in the UK.

The post Amazon Games Expands Global Footprint with New Development Studio in Europe appeared first on European Gaming Industry News.

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Compliance Updates

CT Gaming Obtains New Certification for Diamond King 3 in Romania

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CT Gaming has announced that its exceptional multigame, Diamond King 3, has been certified under the new regulations in the Romanian market.

“With the introduction of new technical regulations in Romania, we had to adapt our practices and obtain new product certifications. This certification represents a significant milestone, further solidifying CT Gaming’s presence in the Romanian market. Thanks to the work of our outstanding team, we were able to secure the necessary measures to ensure our clients and distributors can operate without any issues,” said Robert Stancu, Sales Manager at CT Gaming, Romania.

Diamond King 3 is the company’s premier multigame, showcasing CT Gaming’s commitment to delivering an exceptional gaming experience by combining classic titles with new releases. The multigame features 50 captivating games, including the legendary Mega Jack trio—Aztec Gold, Slot-O-Pol Deluxe and Champagne 20— which is now better than ever. Additionally, 20 games are linked to the exciting 3-level Diamond Tree jackpot. This combination offers players a diverse and thrilling gaming experience, with the potential for both small and large winnings.

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Robert Stancu added: “The unique blend of iconic titles, innovative themes, and jackpot features are all designed to create memorable experiences for players and contribute to our customers’ success. The inclusion of ‘Give Me 5 Clovers’ adds a fresh and exciting dimension to the multigame, and we are confident that players will embrace the diverse gaming experience that Diamond King 3 offers.”

The post CT Gaming Obtains New Certification for Diamond King 3 in Romania appeared first on European Gaming Industry News.

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Eastern Europe

BGaming builds momentum in Romania with Skywind Group

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Popular iGaming content provider BGaming has penned one more Romanian content partnership with global supplier Skywind Group.

As part of the deal, the online casino provider is set to benefit from BGaming’s engaging and forward-thinking portfolio of BGaming’s games, including top performing titles of the year, such as Aztec Magic Bonanza, Wild Cash and Space XY.

The move follows BGaming’s acquisition of a Class II licence from the Romanian National Gambling Office and a subsequent successful partnership with Superbet and Maxbet earlier this year.

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Founded in 2012, Skywind Group has enjoyed exponential growth over more than a decade, with its portfolio featuring more than 300 games. Live in more than 19 regulated markets, the provider has also integrated its content with more than 1,000 operators.

BGaming’s collaboration with Skywind Group will initially focus on Romania, with future plans to expand into Colombia with the premium content provider, highlighting the studio’s impressive growth trajectory.

Olga Levshina, CCO at BGaming, said: “We are proud to further our reach in Romania by partnering with Skywind Group, a supplier that shares our passion for providing the most creative content in the market.

“We look forward to further growth with Skywind, with plans to expand into Colombia, but for now we hope their Romanian players continue to enjoy our fun and engaging games.”

Alina Popa, Business Development Manager at Skywind, said: “We are delighted to be providing BGaming’s top-tier, certified games to our players in Romania.

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“BGaming is known for its player-first ethos and we know that the content offering is developed specifically with player feedback in mind. For this reason, we anticipate a long and successful partnership.”

 

BGaming is a fast-growing iGaming content provider converting gambling into gaming. Thanks to an expert team and a player-driven approach, the studio creates innovative and engaging products featured on reputable platforms and 1,000+ online casinos worldwide. BGaming is the world’s first to support cryptocurrencies and offer Provably Fair games. Today the brand’s portfolio includes 100+ products with HD graphics and a clear user interface for every device. The studio is also known for its brand exclusives created in partnerships with leading operators in the industry.

 

The post BGaming builds momentum in Romania with Skywind Group appeared first on European Gaming Industry News.

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