Ukraine CRGL Scrutinised After Issuing First Licence

The country’s newly formed Commission for Regulation of Gambling and Lotteries (CRGL) has left Ukraine’s gambling stakeholders dumbfounded after issuing its first license this week.

Speisiks LLC

CRGL announced on Wednesday that it had awarded its first online gambling license to Speisiks LLC, the company that runs the Cosmolot brand that previously operated under the UNL instant lottery license in Ukraine but discontinued from July 2019.

The approval of Speisiks LLC’s online casino license by CRGL should have marked the launch of Ukraine’s new regulated gambling marketplace some six months after the Ukrainian Gambling Law was ratified by President Volodymyr Zelensky.

Decision under scrutiny

Yet, after approving Speisiks’ license, CRGL’s decision came under scrutiny, amid stakeholders still awaiting a government decision to agree on crucial conditions relevant to the technical certification of the Gambling Law.

CRGL rejected and left ‘without consideration’ about 15 license applications prior to its announcement, without any clarification as to the framework and technical specifications.

‘Technical accreditation’

Although the provisions of the Gambling Law were accepted last summer, enabling companies to apply for licenses, the government of Ukraine has not yet implemented standards for ‘technical accreditation’ with regard to technology, operating systems, applications and enforcement controls.

The situation left Ukraine’s observers perplexed as to how, without knowledge of any final market conditions, CRGL approved Speisiks’ license. Therefore, if Speisiks launched the Cosmolot brand without performing its technical duties, the CRGL approval could cause legal challenges.

Surrounded by cynicism

As a government agency, established only three months ago to manage licenses, CRGL is surrounded by cynicism and fails to meet its first regulatory obstacle. In addition to technical requirements, Ukraine’s stakeholders have not yet received word as to whether the government has finally decided on the gambling tax structure of the industry, although it seems that the required legislation has stalled ‘in the middle of the Rada’s floor.’

Ilya Machavariani, CEO and Senior Partner of CIS gambling consulting firm 4H Agency said: “Developments continue to gather pace in Ukraine, however, applicant parties still await vital information on technical certification to address legislation requirements.

“The next months will be critical in how a regulated market shapes up. Out of the blue, CRGL offered its first licence this month, but greater transparency certainly could help the market.”