A recent law passed by the Verkhovna Rada has forced heavy gamblers in Ukraine to put off the dreams of hitting the jackpot for an unspecified period. It is also unclear now whether gambling business owners will be able to make profits.
The Verkhovna Rada of Ukraine passed a law banning gambling businesses within the limits of cities, towns, and villages by 340 votes, including 150 from the Party of Regions, 120 from the BYuT, 42 from NU-NS, and 20 from the Lytvyn Bloc.
The document also forbids engagement in gambling activity. However, the law does not apply to lotteries, creative contests, sports competitions, billiards, bowling, and other games in which no prizes are won, as well as the crane-type machines that offer only material things for prizes. The law emerged as a response to the fire in a Dnipropetrovsk game arcade on May 7, 2009 that killed nine people. The government passed a resolution to suspend licenses for all gambling businesses for a month.
The law will enter into force only after it has been signed by Ukraine’s President Viktor Yushchenko. No licenses will be issued to gambling businesses after this, and the already existing permits will be canceled. Within three months the Cabinet of Ministers will need to submit for parliament’s consideration a draft law on special gambling zones. The businessmen who will continue to organize gambling after the gambling moratorium enter into force will be fined (8,000 minimum wages) and their gambling equipment will be confiscated, with all the proceeds channeled into the state budget.
“We have made such a radical decision because Ukraine has several times more arcade machines per capita than Europe,” said Natalia Kovalevska, a BYuT MP, explaining the main argument in favor of the law.
On the contrary, NU-NS MP Ksenia Liapina calls the law populist and containing only slogans rather than real mechanisms to protect the population from gambling addiction. “This draft law speaks about a temporary ban on gambling business until the decision to allow [it to operate] on some territory is adopted. This is hyperpopulism. And this has nothing to do with the desire to curb gambling addiction. Now they are proposing a ban on absolutely everything, including casinos, where rich people lose big sums of money, etc. This is criminalization of the entire sphere and making it a shadow one,” she said.
Economist Borys Kushniruk has a similar opinion: “The problem is not in gambling business,” he told The Day. “I don’t gamble. Furthermore, I’m not an admirer of gambling. But in our country everything is done not on the economic grounds or in pursuit of the best option, but as the most scandalous scenario. In this case it is quite obvious that people who want to gamble won’t disappear. And they will be ready to play for anything and anywhere.”
Kushniruk believes that gambling business should be restricted. But he recommends doing this only after it has legal places to move to. If it is not done, a certain category of people will always continue to gamble, seeking adrenaline, in underground casinos if official establishments, which pay taxes, are not available.
Oleksandr Vashchenko, former head of Ukraine’s State Committee for Regulatory Policy and Entrepreneurship, believes that the adoption of the law is intended to create a social response rather an economic one. “It is no secret that there was a serious resistance and a strained attitude, above all, to arcade machines, which people run across on every corner and which lure youth and people who want to thus improve their financial situation. But as a result it leads to material losses and psychological disorders,” he said.
However, it is hardly possible to create Ukrainian Las Vegas at one stroke. The issues of land and rapport with local authorities are among the first ones to be resolved if this plan is to come true. “A separate question is that the subjects of gambling business will raise a fair amount of questions calling for certain reimbursement by the state,” Vashchenko said. “Let’s imagine a situation when, for example, I received a license a month ago as a [gambling] business unit, paid €150,000 for this, built an absolutely legal gambling place according to all sanitary, fire safety and other norms, and today I am banned from operating this business. Nobody returns the money to me. Apparently, it is fair to raise also these questions. Both the government and the state should address them in an adequate fashion,” Vashchenko added.
After additional consultations with experts Yushchenko will soon have to decide whether he will sign the verdict on gambling business. He says he is ready to do it even now, even though in reality the “law is humiliating and takes us further away from resolving the essence of the question.”
The president believes that the accident in Dnipropetrovsk was very distressful for the country and the people, and one should not speculate on it. However, he adds that by this document parliament and the government are washing their hands of the problems in the gambling sector. Parliament has kept the draft law on regulating this sector’s activity for two years. “Let us say openly: either we undertake the responsibility for the state regulation of this problem, which is indeed a great and sensitive one, or we simply move it into the shadow, where corruption shadow liaisons will flourish,” Yushchenko stressed.
Last Monday the employees of gambling businesses came the Presidential Secretariat asking the president to veto the law. The Ukrainian Association of Gambling Business Workers notified before this campaign that thousands of people from all over Ukraine would protest against the ban on gambling business. Organizers said that this rally is a continuation of the one that took place on May 12, 2009, in front of the Verkhovna Rada and the Cabinet of Ministers, when nearly 5,000 people from various parts of Ukraine spoke out against the hasty ban on gambling business.
