Sergei Efimenko (Favbet): Ukraine will benefit from passing laws on gambling

Sergei Efimenko (Favbet): Ukraine will benefit from passing laws on gambling

Sergei Efimenko, the Chief Operating Officer of Favbet Bookmaker Company tells about the introduction of a bill legalizing gambling business to Verkhovna Rada.

On July 24, 2015, the deputies from the People's Front Party, Viktor Romaniuk and Gennady Krivosheya, introduced a bill 2441a "On state control and legal basis for the organization and conduction of gambling." Let us recall that gambling business has been prohibited de jure in the country for 6 years, and since December of last year, it has been frozen de facto after law enforcement officers closed all kinds of gambling establishments operating on the basis of lottery licenses.

The new bill suggests legalization of all forms of gambling, including slot machines. It will be allowed to open casinos in four and five star hotels of Ukraine. The machines can be installed in cafes, bars and restaurants and even in different buildings, except for educational institutions, health care facilities, administrative buildings and churches. The activities of bookmakers, betting organizers and betting shops will be permitted, including those on the Internet. Requirements for the organization and conduction of gambling on the Internet are minimal. They include the reception of interactive bets only through the web sites listed in the license; placement of information about gambling (with the obligatory indication of: the name of the organizer of gambling and its legal address and license number; the rules of gambling; the notification prohibiting persons under 18 to participate in the game; the compulsory registration of each participant of  gambling and creation of an account on the server of the website; the transfer of prizes (awards) solely to this account, the transfer of the database in the form of electronic documents in the data bank in real time.

"Bookmakers Rating" discussed the bill with Sergey Efimenko, who is the COO at Favbet, one of the major companies on the Ukrainian market before its actual collapse. Mr. Efimenko noted that various forces and lobby groups developed various bills aimed at the partial or complete legalization of gambling in recent years. He is not involved in the development of the draft 2441a, but his company believes it is sufficiently balanced and interesting.

- On the one hand, the bill takes into account the interests of business and the need for its development; on the other hand, it addresses the social interests of the state, protection of the population suffering from addiction, protection of citizens from unreliable shell companies and non-payment of winnings, as well as the creation of a strong legislative framework for the entire industry. However, it is not clear what is subject to taxation, as this is probably the key point of business, so I can say nothing in this regard.

— What are the chances that this bill will be finally adopted? Does it have the support?

- In fact, it is difficult to say which of the bills will be passed. Today, there is a situation where both the government and the people understand the need for such law in the country. Nevertheless, there are two problems: the lack of coordination of the future vision of the details of the bill between the different factional groups and the populist actions aimed at PR campaign on "countering" the adoption of such laws.

— Are requirements for various gaming operators clearly defined?  Will it be possible to limit the additional "fees" collected from players that existed during the operation under the auspices of the lottery bookmakers?

— The blame for current "fees" lies not with specific companies, but the imperfections of the current legislation, when sport betting with a margin of 7% on turnover is subject to 20% tax on turnover. The only chance for a company to survive is to impose these duties on the players. However, this pushes them to the online games on the unregulated market of international online bookmakers. As a result, the state instead of the expected growth receives drop in the amount of tax payments to the budget The proposed bill clearly divides betting and lottery activities. This fact gives hope that the realities of cost-effectiveness and functioning of each of the types of gambling are taken into account, and the effective taxation are applied to them.

— What can you say about the regulation of the online market?  Are there any specific requirements and standards set for online bookmakers?

— Objectively speaking, the requirements are quite acceptable; I like that all activities (both online and offline) assume control with the help of the monitoring system. This situation ensures the business transparency. Moreover, the business, to some extent, is protected from illogical measures made by the government. You can always appeal to the existing balances and speak the language of numbers, thus avoiding illogical tax rates and types of taxes that kill business.

— Is sufficiently liberal version of the gaming regulation exposed to social risks, taking into account the specificity of Ukraine? This refers to the proposed availability of all kinds of gambling, including slot machines.

— Well, I absolutely agree that slot machines are an eternal sticking point not only in Ukraine, but also worldwide. They will always attract the attention of the populists, and subject to incompetent settlement, such law brings certain social risks, given that the slot rooms are available for gamblers. After all, the bookmaking is a game of the mind, not a chance. The VIP persons usually play in a casino and they rarely venture their last savings. However, totally accessible slot halls are a "bait" for gamers. The law contains a number of measures aimed at the proper settlement of the slot games, but only the time will show how they will work in practice, if the law is adopted. Today, we see a massive gaming on the internet and gambling tourism in neighbouring countries against the background of an acute shortage of funds in the treasury of the state. So, Ukraine will most certainly benefit from the adoption of the law.


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