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Eastern Europe

Ukrainian gambling: to be, or not to be, that is (already not) the question

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After significant and protracted deliberations, Ukraine finally legalized gambling activities back in 2020. The Law on the governance of the organization and carrying out of gambling activities became effective almost half a year ago. As of the date of writing this article, already 3 licenses have been granted to online casinos for their gambling activities to be performed in the future.

There is still a number of issues and, despite all efforts, the gambling market seems to be standstill except for the mentioned minor movements by local online players obtaining licenses. As of now, it seems that no big international market players are entering the newly born Ukrainian gambling market. So, let`s discuss whether it is all going somewhere and if that somewhere is in the right direction.

 

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Ukrainian gambling market background

To see a broader picture, one should unveil the historical background of the current gambling market legalization in Ukraine. First of all, it’s worth mentioning that the Ukrainian gambling market has been actually reopened, but not developed from scratch.

The previously operating Ukrainian gambling market was not so much a success story as one might imagine. There were no huge and fancy casinos like in Las Vegas, but rather a market consisting of different establishments, some of them even legal and compliant. They were shut down by decisive moves of the state authorities in 2009 due to the lack of comprehensive regulations and effective control over their execution, which irreversibly led to negative consequences. As a result, the mentioned flaws contributed to the growth of black and grey gambling services markets. Moreover, the lack of strict rules and their enforcement also formed a public opinion that the gambling market was something antisocial and dirty. Ukrainians still remember well those times when slot machine halls literally surrounded public transport stops and were filled with some not exactly wealthy people giving up their last money in pursuit of a snatch.

At that time, Ukrainian authorities decided to use muscles instead of brains and banned all gambling activities instead of introducing reasonable regulation and taking the situation under control. Thus, starting from mid-2009, all gambling operators were forced to leave the wild, but rapidly growing market. However, as one may guess, the Ukrainian gambling ban was not far from the Prohibition in the United States in terms of its results. Ukrainian gambling market simply went undercover, depriving the Ukrainian budget of significant contributions previously made by the industry.

 

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What are the current challenges for the Ukrainian gambling market?

Not so long ago, a logical step was taken by Ukraine and the gambling activities ban was lifted. However, same as in the case with the Ukrainian land market, things are not perfectly smooth and there are still some obstacles in place.

For instance, while three online casinos have already paid for and received licenses, they still can`t fully realize and enjoy the rights of an online casino operator. The reason is that the necessary regulations applicable to certification of the equipment to be used in casinos haven`t been adopted yet. Additionally, there is still a certain lack of clarity in terms of taxation of gambling activities. Some say that a specific volume-based tax will be introduced. However, considering that the licensed operators can`t get any revenues in the absence of the regulations to certify their equipment, the issue of taxation seems to be too far to think about.

Apart from that, one should note that this time Ukrainian government decided to seriously take advantage of the gambling market by imposing comparatively high license fees, financial thresholds, and location requirements (for offline casinos). For instance, the license fee is around USD 1.1 million for online casinos (for 5 years) and USD 10 million for offline casinos if based in Kyiv (additional equipment fees will also apply). Moreover, a gambling operator must have a share capital of at least USD 1.1 million and a deposit account or Ukrainian bank guarantee for USD 1.2 million.

As to the location requirements, under the new legislation, casinos can be opened only at 5-star hotels with at least 150 rooms in Kyiv, 4- and 5-star hotels with at least 100 rooms in other regions, out-of-town resorts with a total area of at least 10,000 m2 or “special gaming zones” within territories to be further defined by the Ukrainian government.

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Under the new law, various restrictive regulations of a similar character also apply to betting, slot machine halls, and online poker activities.

 

Opportunities and additional obligations for Ukrainian gambling operators

It is worth mentioning that there are some opportunities for the new market players. The new law provides that such players may obtain investment licenses. Holders of such licenses will be exempt from license fees for 10 years if they build a new 5-star hotel with at least 200 rooms in Kyiv or 150 rooms in another Ukrainian region.

Ukrainian gambling operators will be also obliged to follow certain gambling standards and policies aimed at preventing gambling addiction. The government plans to launch a state-owned online monitoring system. The system will perform a real-time oversight and control of the Ukrainian gambling industry.

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To sum it all up, it’s an important aspect that different people might make different conclusions as to the above. Pessimists might claim that this time, the gambling market launch in Ukraine has little chance to become interesting for the largest international market players. However, if evaluated by opportunists, entering the Ukrainian gambling market is definitely worth a shot.

High financial thresholds and strict regulations ensure that the market will not slip into putting dirty slot machines centered around metro stations. It is more likely that the Ukrainian gambling industry will at least somehow resemble what one may observe in wealthy locations like Las Vegas. This puts confidence into the minds of potential investors because the government will not be in a position to cut its own leg by banning a well-governed and budget-supporting industry.

The readiness of the local online casino market players to pay for the licenses which can`t be yet used proves the above statement to be true. It also leads to a conclusion that gambling investors should already be on their way to Ukraine in order to be in a time when the market starts to operate and extreme profits flow into the hands of the few pioneers.

This article has been created with the help of Oleksandr Aleksyeyenko (Partner at Marchenko Partners) and Sviatoslav Henyk (Senior Associate at Marchenko Partners)

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Eastern Europe

EveryMatrix opens new eco-friendly HQ in Bucharest as it announces 1,000th employee

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EveryMatrix has officially inaugurated its new development hub, located at the heart of Bucharest, Romania, while also reaching a milestone of 1,000 employees. 

In collaboration with STRABAG Real Estate, construction on the cutting-edge business hub commenced in 2022 with the building now open, providing the tier-1 iGaming supplier’s Bucharest-based team of 400+ staff and growing with a modern, eco-conscious workspace.

EveryMatrix has also surpassed the 1,000-employee mark, just 16 years after it was founded in 2008. The company’s purely organic growth has sky-rocketed in the last four years, with the number of staff increasing by 90%, up from 525 employees in 2020 to 1,000 today. The business announced record profitability in 2023.

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The new office is situated near University Square, the city’s focal point with the central location streamlining commute times, making it easily accessible to employees, clients, and partners.

Equipped with a large in-house gym, spa, pool, garden and state-of-the-art amenities across six dedicated floors, as well as free electric car charging points for all staff to encourage switching from fossil fuelled transport, Arghezi 4 was designed to offer the best working experience and environment, catering to the diverse needs of EveryMatrix’s employees.

Click here for an exclusive glimpse into the office and the benefits and features of the building’s beautifully crafted interiors.

The building meets rigorous LEED V4 Gold green certification using sustainable construction practices to minimise environmental and human health risks. Employing building materials and construction methods that are not harmful to the climate and environment, the new office sets a new standard for corporate and environmental responsibility.

Ebbe Groes, Group CEO, EveryMatrix, said: “Building our own HQ has been very exciting but has equally involved a great deal of work. This is our first purpose-built office here, so its opening, combined with our 1,000th employee represents a special moment in the company’s 16-year history.

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“We are continually investing in the development of the business and its culture for both the well-being of our employees and to futureproof EveryMatrix, and I know from speaking to many of the teams here that it ticks all the boxes for our colleagues’ happiness.”

Marius Iancu, Global Head of HR, EveryMatrix, added: “This building is not just a new office; it also serves as an important part of our talent acquisition strategy from 2024 onwards. Every one of its elements has been designed to position EveryMatrix as an employer of choice and provide our teams with a work-life experience that goes beyond expectations.

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Eastern Europe

SBC Summit Tbilisi 2024 Promises Growth and a Deep-Dive into Eastern Europe & Central Asia

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SBC Summit Tbilisi is poised to reclaim the spotlight on 25-26 June at the Sheraton Grand Tbilisi Metechi Palace, marking its early return after a highly successful inaugural edition in October 2023.

1,500 senior sports betting and iGaming executives will reconvene in the heart of Georgia’s capital, to solidify their foothold in the promising markets of Eastern Europe and Central Asia, while gaining invaluable insights into the nuances that shape industry dynamics.

SBC has once again partnered with SMH to organise SBC Summit Tbilisi, continuing the event’s partnership that began with the SBC Summit CIS in Kyiv in 2021. SMH is an international iGaming and sports management organisation based in Georgia, bringing valuable local knowledge to an event that incorporates unique elements reflective of the vibrant Eastern European and Central Asian markets.

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Lasha Machavariani, Founder and CEO of SMH, said: “I’m thrilled that the SBC Summit Tbilisi is making a comeback to my beautiful home country of Georgia. Witnessing all the engaging conversations and networking that took place last year filled me with pride, affirming that the effort that goes into organising an event of this calibre is absolutely and undoubtedly worthwhile.

“Offering a platform for those keen on Eastern European and Central Asian markets feels not only rewarding but also essential, especially given all the buzz in these markets we’re diving into. If this event wasn’t on your radar yet, now’s the perfect time to start considering it.”

Andrew McCarron, Managing Director at SBC, commented: “Operators, suppliers and affiliates who want to make a mark in the region simply have to attend SBC Summit Tbilisi if they are going to compete successfully. These markets are tricky to thrive in without local knowledge, which is why SBC has partnered with SMH in order to provide the platform for companies to perform effectively.”

Centered on these dynamic regions, the event promises an in-depth exploration of key markets, including Georgia, Romania, Serbia, Bulgaria, Kazakhstan and Slovenia among others, and guarantees to be a melting pot of ideas and strategies tailored for these geographically diverse regions. The conference agenda will focus on trends including the new regulatory landscapes in Eastern Europe and Central Asia, the influence of innovations from crypto to AI, and new developments in eSports, payments, and influencer marketing, among other topics.

Last year, the host country had a strong operator presence during the inaugural summit, with industry leaders like Adjarabet, Betlive, Crocobet, Europebet, Leaderbet, LVBet, Superbet, TotoGaming and Vbet making their mark.

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Past event attendees responded exceptionally well to the inaugural edition of the event. Tereza Tokmajyan, CMO of TotoGaming, called it an ‘excellent opportunity for operators and service providers from the region.’ Dmitry Starostenkov, CEO of EvenBet Gaming, described it as “featuring a very active and representative audience, outstanding topics, and speakers”. Additionally, Vakhtang Mdivani, CPO and Co-Founder of Promofy, praised the event, expressing: “Hosting such an exceptional event in Georgia for the first time and setting the bar so high was truly awesome”.

This year’s show floor is set to be significantly larger, featuring over 60 exhibitors and sponsors, effectively doubling the count from the previous year. Moreover, there is an anticipated 70% growth in the count of operator representatives, and affiliate representatives are poised to experience a 50% increase compared to the figures reported last year.

To cater to the growing interest, this year’s event will expand its agenda, commencing with a half-day conference on the opening day (25 June). This addition brings the total number of featured speakers to 60, marking a significant 50% increase from last year.

The first day will feature a poker tournament followed by the Official Opening Party sponsored by Setanta Sports, taking place at Stamba Hotel. On the second day, a VIP dinner exclusively for C-level executives will be held at the Republic Restaurant, followed by a Closing Party at the Republic Event Hall.

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Compliance Updates

CT Gaming Obtains New Certifications for Romania

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NEXT, EZ Modulo 32/32/32, EZ Modulo 27/27/27 and Aurora slot cabinets have received certifications according to the new laws in Romania.

“Due to the new local technical laws, we had to take the needed measures and ensure that our clients can operate without any issues. We were able to acquire the needed certifications for NEXT, EZ Modulo 32/32/32, EZ Modulo 27/27/27 and Aurora slot cabinets,” said Robert Stancu, Sales Manager at CT Gaming, Romania.

The new regulations in Romania require operators to comply with strict regulations regarding the function of their gaming halls and casinos.

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“To maintain the leading positions at the Romanian market, it was highly important to act fast in adapting to the new regulations. After the multigame packs such as Diamond King and Diamond King 2 were certified, we did the same for the slot machines that support these packages,” Mr. Stancu said.

He added that now they have applied for certification of Diamond King 3 and NEXT’ 32/32/32 slot machine. The certificate is being processed, so it is expected that soon the hit multigame will respond to the new laws.

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