Ukraine's gambling sector is undergoing active transformation. Following the government's recent decision to dissolve the Commission for the Regulation of Gambling and Lotteries (KRAIL) and transfer its functions to a new regulatory body, the professional community is asking important questions: What does this mean for businesses, investors, and the economy as a whole? What are the pros and cons of the new model?

George Mamulaishvili, Head of the administratio ofGeorgian Gambling Association (GGA), discusses the current situation in the Ukrainian gambling business.

KRAIL’s Performance Over Four Years

KRAIL was established in 2020 as part of the gambling legalization process and became the first state authority to centrally regulate the sector. Over the years, the Commission achieved several key milestones:

• Licensing and sector legalization: Hundreds of licenses were issued to casinos, bookmakers, and online platforms.
• Increased budget revenue: In 2023 alone, licenses and related fees generated 2 billion UAH (approx. $47.96 million).
• Launch of the online monitoring system (SOG): A digital control system was created for the first time in Ukraine’s history. Although it was not fully operational and its functioning is in question.
• Combating gambling addiction: A register was introduced for individuals banned from gambling.

Despite these achievements, KRAIL became a subject of mixed reviews.

Main Criticisms of KRAIL

• Delayed and unclear procedures: Entrepreneurs often complained about long processing times and poor communication.
• Limited authority: The Commission lacked tools to fight illegal operators effectively.
• Corruption risks: Media and the public pointed to shadow deals and influence groups.
• Administration left much to be desired.
• The monitoring system failed to deliver results, and the funds spent on its development and implementation were wasted.

The result — declining trust in the regulator and stalling market development.

What Will the Regulator Change Bring?

The functions of developing and implementing state policy in the field of gambling and lotteries have been transferred to the Ministry of Digital Transformation, and the newly established State Agency PlayCity, which is accountable to the Ministry, has become the legal successor of KRAIL.

Potential Benefits:

• Digitalization of processes: Licensing could be streamlined via platforms like “Diia.”
• Integration with other systems: The new regulator would have access to tax information, financial monitoring data, and law enforcement databases.
• Transparency and accountability: The new regulator and its procedures must be open and clear to all participants — entrepreneurs, investors, and society. For example, there should be a possibility to see how licenses are issued, based on what criteria, etc. The regulator must explain its actions and decisions. If well-designed and effectively implemented, this model can promote fair competition, increase investment, and support market growth.
• Investor attraction: A stable and predictable environment is important for both local and foreign capital.

Possible Risks:

• Challenges during the transition period: Application processing, license renewals, and technical integrations may be temporarily halted.
• Legal uncertainty: The new body is still in the process of being established, and its powers and authorities have not yet been clearly defined or officially approved.
• Regulatory changes: Tax burdens or market rules may change, posing risks to operators.

What Does This Mean for Market Players?

The ongoing changes demand greater attention from operators, investors, and international partners. New opportunities may arise, but so do real risks. Therefore, it is important to:

• Be ready to adapt;
• Monitor the reform closely;
• Communicate with professional associations and industry stakeholders;
• Participate in public discussions of new legislation, if held.

Conclusion

The gambling regulatory reform is more than just a personnel reshuffle — it's a systemic reset that could create a more civilized, transparent, and economically viable market.

But success depends entirely on how professionally the new model is implemented. It’s not just about changing the name — it’s about building a structure that balances the interests of the state, business, and society.