Ukraine parliament votes to dissolve gambling regulator amidst societal concerns

The Verkhovna Rada, Ukraine's parliament, has voted to dissolve the Commission for the Regulation of Gambling and Lotteries (KRAIL). The decision, which unfolded in a parliamentary session on Wednesday, stems from the submission of draft law Number 9256d, aimed at dismantling KRAIL. 

This development comes against the backdrop of mounting apprehensions regarding the societal impact of gambling, particularly amidst the ongoing conflict in the region. The bill now has to pass a second reading and then be signed by the president before becoming law.

The impetus for this move gained momentum following a petition initiated by a soldier from the 59th brigade, Pavlo Petrychenko, drawing attention to the perceived detrimental effects of the gambling industry. The petition swiftly amassed over 26,000 signatures, prompting presidential attention.

Ukrainian President Volodymyr Zelensky

President Volodymyr Zelensky announced plans to implement stricter regulations on the gambling sector during his address to the nation on April 2nd, noting they would help "protect the interests of society."

The decision to dissolve KRAIL comes amid persistent opposition to the regulator's efficacy. Deputy Prime Minister Mykhailo Fedorov had previously submitted a proposal for its dissolution in May 2023, citing prolonged delays in the issuance of gambling licenses.

Draft law Number 9256d, endorsed by 272 lawmakers in the parliamentary vote, not only seeks to dismantle KRAIL but also aims to introduce additional constraints on the gambling industry in Ukraine. This includes imposing a ban on advertising and implementing further safeguards to protect vulnerable segments of the population.

This development unfolds within the context of Ukraine's gambling sector undergoing a regulatory overhaul, with online gambling being re-regulated in July 2020 after being prohibited since 2009. 

Despite the regulatory challenges, the gambling industry contributed a substantial UAH2.2 billion ($56 million) in taxes for 2024, as reported by Parliamentary Finance Committee Chairman Danylo Hetmantsev.

With KRAIL's dissolution, the responsibility for regulating the gambling industry would transition to the Digital Transformation Ministry.

In line with the ongoing debates surrounding the effects of online gambling, last week President Zelensky signed a decree to ban gambling in the country's military. The move was taken in response to concerns that it is sapping morale and that it might pose a security risk in the country's ongoing fight against Russia. The ban runs until the end of martial law.