A comprehensive review of Ukraine’s gambling sector transformation

Introduction

Almost a year has passed since Ukraine dissolved the Commission for the Regulation of Gambling and Lotteries and designated a new regulator for the gambling and lottery sector. The original Commission was established after gambling was legalized in Ukraine in 2020 under Law No. 768-IX and held the full scope of regulatory powers, including functions related to shaping gambling regulatory policy. [1]

The decision to replace the Commission was primarily driven by concerns about the effectiveness of the collegiate model it followed. In practice, the Commission’s work was repeatedly impeded by its inability to achieve the quorum required for decision-making, which materially limited its operational capacity. The Ukrainian Parliament has therefore moved toward a single-lead regulatory model that is expected to be more capable of discharging day-to-day licensing, supervisory and enforcement functions.

These reforms also resulted in a formal separation of regulatory functions. The policy-making role previously exercised by the Commission was transferred to the Ministry of Digital Transformation of Ukraine, while implementation of that policy – including licensing, supervision, enforcement and regulatory control – was assigned to the newly established State Agency “PlayCity”. The Cabinet of Ministers first created PlayCity as the central executive authority implementing state policy in the gambling and lottery sector [2], [3]

The institutional framework has continued to evolve as the Government searches for a model that provides a clear distribution of powers and a transparent regulatory process. The most recent step was the Cabinet of Ministers’ Resolution No. 613 of 13 May, 2026, which moved PlayCity out of the remit of the Ministry of Digital Transformation and placed it within the sphere of direct coordination through the Prime Minister of Ukraine. [4] This change should be read not merely as an administrative adjustment, but as part of a broader attempt to secure more effective institutional conditions for the implementation of the State Online Monitoring System (of which more below) and for the transparent taxation of the gambling sector.

Although gambling legislation itself has not undergone fundamental reform, the Ukrainian gambling sector has experienced a remarkable number of operational and institutional changes during the past year. Most of these changes can be viewed positively, although they represent incremental progress rather than radical change. The key question is therefore not only what has been created, but whether these new instruments will produce measurable improvements in market transparency, tax compliance, player protection and the reduction of the illegal sector.

The most significant innovations of the past year

PlayCity has announced the creation and use of a specially developed system for tracking illegal operator websites and transferring them for blocking in cooperation with the National Commission for Electronic Communications. According to official materials, this system was launched to identify illegal websites automatically and more effectively. PlayCity and the Ministry of Digital Transformation have also reported that more than 3,500 illegal gambling websites were blocked during the first year of the reform, while more than 500 social media accounts unlawfully advertising gambling were removed and sanctions were applied to 16 bloggers and media outlets. [5], [6]

These figures demonstrate a visible increase in enforcement activity. However, they should not yet be treated as proof that the illegal market has materially decreased. Ukraine still lacks publicly available, independently verified data showing whether the accessibility of illegal platforms for Ukrainian users has actually fallen, whether players have migrated to the regulated market, or whether legal operators’ market share has increased as a result of blocking measures. The effectiveness of Ukraine’s enforcement model therefore remains unproven and should be assessed only after measurable indicators become available.

Any measures aimed at combating the illegal market should be welcomed. At the same time, Ukraine still lacks a systematic approach to the blocking of financial transactions related to illegal gambling with the involvement of banking institutions. This remains a major gap. International experience shows that restricting payments to illegal operators can be one of the most effective tools against the unregulated market. For Ukraine, the development of a practical cooperation model between the regulator, financial monitoring bodies, banks and payment service providers should therefore become a priority.

Regarding licensing, the Government has approved the possibility of submitting gambling licence applications through the nationwide digital public services platform, Diia. Once fully operational, this should simplify the licensing process by allowing applicants to submit documents online without paper filings or personal visits to PlayCity. [7] This is a positive procedural reform, but its real value will depend on whether digitalization is accompanied by predictable review standards, consistent interpretation of licensing requirements and transparent publication of regulatory decisions.

The most notable development for the market has been the presentation and partial rollout of the State Online Monitoring System. Under the law, this system is intended to ensure continuous interaction between the gambling operators and the regulator, including the collection and processing the data from the market. [8] According to official communications, PlayCity launched the system in test operation in April, 2026, while the Ministry of Digital Transformation described it as a tool that will support market transparency, automated data collection for taxation and reduced risks of manipulation or concealment of licensed operators’ activity. [9], [10]

The system appears ambitious. It is expected to process information on deposits, bets, winnings and payouts across licensed operators. Through a dedicated technical platform, data are to be transmitted from operators’ online systems to the state monitoring system for analysis and processing. The State Tax Service is also expected to receive access to relevant data for taxation purposes, including tax on winnings and gross gaming revenue calculations. [10]

At the same time, the launch of the State Online Monitoring System should not be mistaken for the completion of Ukraine’s regulatory modernization. The core challenge is that any monitoring system can only be as reliable as the data it receives. Without independent certification, audit mechanisms and technical standards governing data generation, transmission and integrity, there remains a risk that regulatory oversight will focus on reported information rather than actual operator activity.

This is particularly important because Ukraine still lacks comprehensive technical standards for the gambling sector. Without certification of the state system itself and of all operator online systems connected to it, expectations regarding the system’s effectiveness for regulatory, supervisory and tax-control purposes should be tempered. The ultimate test of the system will not be the fact of its launch, but whether it produces reliable, auditable and enforcement-ready data.

A restart of the lottery market

The past year has also been significant for the lottery market. For many years, Ukraine’s lottery market could not be fully formed because the necessary licensing conditions had not been approved. The Government subsequently adopted a framework for lottery licensing, and PlayCity issued the first lottery licences in more than a decade. According to PlayCity, three operators received licences and the state budget received more than UAH 72 million from the first lottery licensing process. [11]

This is an important institutional restart. However, the primary legislation governing lotteries in Ukraine still requires substantial reform. PlayCity itself has described the current stage as transitional, noting that licence terms during martial law differ from the standard ten-year model and that further legislative amendments are being prepared to remove barriers and create conditions for a more competitive model. [11] The lottery market therefore remains in a formative stage rather than a fully settled regulatory environment.

Amendments announced to gambling legislation may represent real progress

The Ministry of Digital Transformation has put forward draft legislative amendments for public consultation that may significantly contribute to the evolution of gambling regulation. According to PlayCity, the consultation covers proposed amendments to the Gambling Law and the Tax Code. [12] These changes may finally address several controversial taxation provisions that have generated disputes between gambling operators and the Ukrainian tax authorities.

The proposed changes may also strengthen player protection and responsible gambling measures, including by requiring operators to implement player behaviour monitoring tools and conduct timely interventions aimed at preventing gambling-related harm. In this respect, Ukraine should draw more actively on the experience of the international gambling community, where behavioural monitoring, affordability indicators, safer-gambling triggers and independent audit standards have already been developed in practice.

The critical risk is that legislative amendments may remain declarative unless they are supported by technical regulation, enforceable standards and institutional capacity. Behaviour monitoring, intervention duties and player protection requirements cannot operate effectively if the regulator does not have reliable access to verified data and if operators’ technical systems are not independently assessed.

Changes and developments in gambling advertising

Since April, 2025, the rules governing gambling advertising have been significantly tightened following the entry into force of amendments adopted by Law No. 4116-IX. [13] The new regulator has actively exercised its powers to impose sanctions for violations of gambling advertising rules. Official materials report substantial fines for unlawful gambling advertising, including sanctions imposed on bloggers, websites and media channels. [6], [14]

Overall, this has had a positive impact, particularly because of the public visibility of enforcement cases. However, the strict prohibitions introduced by law are not formulated with sufficient clarity in all areas, especially in relation to sports sponsorship. This creates uncertainty both for sports organizations, which face financing constraints during wartime, and for betting operators that may wish to support sport within lawful limits.

This issue was expected to be addressed through co-regulation under the Law of Ukraine “On Media”, including the development of practical codes that would clarify matters not fully resolved by general advertising legislation. At present, however, the absence of such co-regulatory guidance leaves the sector exposed to legal uncertainty. This is a serious practical problem: unclear rules rarely produce better compliance; they more often produce either excessive caution or selective enforcement.

Minimization of risks associated with gambling

Despite the legalization of gambling several years ago, Ukraine has yet to develop a comprehensive national strategy for minimizing gambling-related harms. This has created a situation in which social-risk prevention, public-health responses and evidence-based player support remain underdeveloped. The issue has become more urgent because of the social consequences of  military aggression and the increased vulnerability of certain groups, including military personnel and veterans.

Proposals have been discussed for a complete ban on military personnel participating in gambling. According to many experts and market participants, such a measure would be extremely difficult to implement from a technical perspective and could worsen the situation by pushing vulnerable players toward illegal platforms. A total prohibition is unlikely to be effective unless accompanied by prevention, education, early intervention and access to confidential support.

A comprehensive and strategic approach is required. This should include a clear policy direction, systematic research, involvement of civil society, the public-health sector and the military community itself, as well as a national support infrastructure. The state’s recent movement toward player protection tools, including self-exclusion mechanisms and public complaint channels, is important, but it should become part of a broader harm-minimization strategy rather than remain a set of separate digital instruments. [15]

Gambling regulation and Ukraine’s post-war economic recovery

The reform of Ukraine’s gambling regulatory framework carries significance beyond the sector itself. By strengthening transparency, improving supervisory capacity and reducing the influence of the illegal market, effective regulation can generate measurable fiscal benefits: increased tax revenues from the legal gambling sector and a broader tax base derived from operators brought within the regulated framework.

Official materials of the Ministry of Digital Transformation report that UAH 1.7 billion was received by the budget from licensed gambling organizers in 2025. [16] Lottery licensing alone generated more than UAH 72 million in budget revenues. [11] These figures show why gambling regulation is not only a sectoral matter but also a fiscal and economic governance issue.

Ukraine’s gambling sector has been identified as a potential contributor to post-war economic recovery and growth, with public revenues capable of supporting regulatory, social and reconstruction objectives. However, this potential will only be realized if the legal market is stable, predictable and genuinely transparent. A licence must become not only a formal permission to operate, but a marker of technical compliance, responsible conduct and regulatory trust.

In conclusion, Ukraine’s gambling sector has undergone a period of significant transformation. Important progress has been made in the digitalisation of regulatory processes, the development of new supervisory tools, and the modernization of the legal framework. At the same time, many of the reforms remain at an early stage of implementation, and their long-term effectiveness will depend on their ability to deliver measurable improvements in market transparency, player protection, regulatory efficiency, and the reduction of illegal gambling activity.

Ukraine’s experience remains particularly distinctive because these reforms are being implemented under the extraordinary conditions of an ongoing war. As the sector continues to evolve, the effective use of international expertise and evidence-based regulatory practices may play an important role in supporting the development of a transparent, sustainable, and socially responsible gambling market. 

References

[1] Law of Ukraine No. 768-IX “On State Regulation of Activities Regarding the Organization and Conduct of Gambling”, 14 July 2020. https://zakon.rada.gov.ua/go/768-20

[2] Cabinet of Ministers Resolution No. 314 “On the central executive authority implementing state policy in the field of gambling and lotteries”, 21 March 2025. https://zakon.rada.gov.ua/go/314-2025-%D0%BF

[3] Cabinet of Ministers Resolution No. 505 “On approval of the Regulation on the State Agency of Ukraine PlayCity”, 2 May 2025. https://zakon.rada.gov.ua/go/505-2025-%D0%BF

[4] Cabinet of Ministers Resolution No. 613, 13 May 2026, changing the coordination of PlayCity. https://zakon.rada.gov.ua/go/613-2026-%D0%BF

[5] PlayCity, “Results of PlayCity’s work in April”, 7 May 2026. https://playcity.gov.ua/news/rezultaty-roboty-playcity-u-kvitni

[6] PlayCity, “One year since the launch of the reform of the gambling and lottery market in Ukraine: results of the Ministry of Digital Transformation and PlayCity”. https://playcity.gov.ua/news/rik-vid-zapusku-reformy-rynku-azartnykh-ihor-ta-loterei-v-ukraini-rezultaty-mintsyfry-ta-derzhahentstva-playcity

[7] Ministry of Digital Transformation, “Gambling business licences can be issued through Diia”, 24 December 2025. https://thedigital.gov.ua/news/business/litsenziyi-dlia-hralnoho-biznesu-mozna-bude-oformyty-cherez-diiu

[8] Cabinet of Ministers Resolution No. 171 “On approval of the Procedure for functioning of the State Online Monitoring System”, 16 February 2024. https://zakon.rada.gov.ua/go/171-2024-%D0%BF

[9] Ministry of Digital Transformation, “Control of the gambling market 24/7: the Government made the final step toward launching the State Online Monitoring System”, 14 January 2026. https://thedigital.gov.ua/news/technologies/kontrol-hralnoho-rynku-247-uriad-zrobyv-ostanniy-krok-do-zapusku-derzavnoyi-systemy-onlayn-monitorynhu-azartnykh-ihor

[10] Ministry of Digital Transformation, “PlayCity launched DSOM in test operation”, 10 April 2026. https://thedigital.gov.ua/news/technologies/playcity-zapustylo-dsom-u-testovu-ekspluatatsiiu-derzava-vpershe-otrymaye-dani-pro-rynok-azartnykh-ihor-u-realnomu-chasi

[11] PlayCity, “The state budget received more than UAH 72 million from the first lottery licensing in 12 years”. https://playcity.gov.ua/news/derzhbiudzhet-otrymav-ponad-72-mln-vid-pershoho-za-12-rokiv-litsenzuvannia-operatoriv-loterei-msl-patriot-ta-unl-otrymaly-litsenzii

[12] PlayCity, “The Ministry of Digital Transformation initiates changes to gambling legislation: public consultation has begun”. https://playcity.gov.ua/news/mintsyfra-initsiiuie-zminy-do-zakonodavstva-u-sferi-azartnykh-ihor-rozpochaly-hromadske-obhovorennia

[13] Law of Ukraine No. 4116-IX on amendments to combat gambling addiction and improve regulation of gambling and lotteries, 4 December 2024. https://zakon.rada.gov.ua/go/4116-20

[14] Ministry of Digital Transformation, “UAH 67.2 million in fines for illegal casino advertising”, 12 December 2025. https://thedigital.gov.ua/news/business/uah672-mln-shtrafiv-za-nezakonnu-reklamu-kazyno-nahaduyemo-pravyla

[15] PlayCity, “Prevention of gambling addiction” / self-exclusion and support information. https://playcity.gov.ua/borotba-z-ihrovoiu-zalezhnistiu

[16] Ministry of Digital Transformation, 2025 annual results. https://2025.thedigital.gov.ua/

Read previous articles about the development of gambling regulation in Ukraine.

https://www.imgl.org/publications/imgl-magazine-volume-3-no-1/reform-still-on-the-agenda-in-war-torn-ukraine/

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