Ukrainian lottery market must be opened to new operators — PlayCity head
The competition to license lottery operators, which Ukraine's State Agency for the Regulation of Gambling and Lotteries PlayCity is holding in December, will not lead to the emergence of new market players due to legislative restrictions. However, this situation should be changed in the future, believes PlayCity Head Hennadiy Novikov.
"Opening the market to everyone is my personal position. I don't know what the final decisions will be, but I believe the market should be open not only to companies with previous experience in lotteries, and not necessarily only to state-owned ones," Novikov said in an interview with Interfax-Ukraine.
In his view, a company's capacity in this business should be measured by the amount of money it is willing to pay annually to the state as a license fee.
"We, as the state, must clearly define our goal: we want the lottery market to develop and for the state budget to receive the maximum possible revenue from it. In exchange, we must offer clear rules of the game and defined boundaries for this market," the head of the agency said.
He clarified that the short application period for the competition announced in early December, with a deadline of December 29, is due to the requirements of current legislation and is not a choice made by the regulator.
"Current legislation obliges the regulator, regardless of who it is (at that time it was the Ministry of Finance), to hold a new competition within three months after approving the licensing conditions. This process includes several stages, one of which is the submission of documents," Novikov explained in an interview with Interfax-Ukraine.
According to the agency head, if the legislation were updated, such a competition should be announced a year in advance so that international companies could assess the conditions, prepare, and participate.
"Moreover, in our opinion, the competition should be structured differently: applicants should compete financially, because the state issues a limited number of licenses. Currently only three are foreseen," Novikov said.
At the same time, the head of the agency explained the importance of the current competition, as lottery operators have been operating for more than 10 years without paying any license fees at all, since the licenses previously issued by the Ministry of Finance expired in 2013–2014.
"Under the law adopted in 2009, until new licensing conditions are approved, companies operate under the old rules. When the gambling and lottery sector was transferred from the Ministry of Finance to the Gambling and Lottery Regulation Commission, the lottery companies left the Ministry of Finance but never reached the new regulator because it did not adopt new licensing conditions," Novikov stressed.
As of the interview date, December 17, according to the head of PlayCity, two of the three Ukrainian lottery operators had submitted applications for the competition.
"After the competition is completed and provided a positive decision is made, and after the actual payment of the license fee, it will be possible to talk about restarting the lottery market in the format of three, two, or even one company," Novikov said.
As for updating the lottery market law, the head of PlayCity believes that, in addition to holding a competition, systemic changes should also be introduced to ensure effective oversight of operators' activities. According to him, lottery operators currently report to the State Treasury Service, but these reports do not even include instant lotteries.
"Two of the three existing operators simply installed their computers at the State Treasury: in one case a laptop, in another a desktop PC, and gave a Treasury employee the password. Once a day, the employee logs in, clicks 'generate,' and produces a report," the head of PlayCity described the current process. The generated report is then sent to the Ministry of Finance, which has long since ceased to be responsible for regulating this sector, he added.
Novikov said that PlayCity has proposed using the option provided by law to grant the state access to information. "In fact, this is what the current 'Treasury model' is. But we have clearly defined the full list of information for all types of lotteries to which operators must provide access," Novikov said.
According to him, the difference with a monitoring system is that in such a system data is collected and stored automatically, whereas in the case of lottery operators, the state can access and verify this information manually at any time.
"At the same time, I am convinced that this issue must be further закреплено at the legislative level," the head of PlayCity said.
Another issue that needs to be addressed in legislation is strengthening the liability of lottery operators, Novikov said, because currently, unlike in the gambling sector, it effectively contains no sanctions at all.
"The same applies to advertising restrictions: on the lottery market, they practically do not exist at present. Right now, lottery operators are not abusing advertising. We all see that. But we do not know what will happen after new licensing conditions are introduced," Novikov emphasized.
As reported, starting in February 2025, state policy in the gambling sector is being shaped and coordinated by the Ministry of Digital Transformation. On March 21, the Cabinet of Ministers decided to establish a new central executive body, the PlayCity agency, which officially reports to the Ministry of Digital Transformation and, as of April 1, replaced the previous regulator, the Gambling and Lottery Regulation Commission.
