The Cabinet may restart the lottery market

The lottery market is working without the license conditions with 2012 and no license 2014.

25 may, ending the regulatory deadline for public comment was developed by the Ministry of Finance of the draft licensing conditions for operators of the lottery market.

According to sources in the Ministry, soon the edited document will be submitted for approval by the Cabinet.

New licensing conditions developed by the Ministry of Finance, refer to in-market operators fees for the right to operate the lottery. The fixed component of license fees – 168 million 400 thousand hryvnias (100 thousand minimum living wages). The annual fixed charges to be charged from the points of distribution of lotteries. Thus, with only one company, the state will receive more than 200 million hryvnia from alone fixed taxes.

According to GFS, in 2014 the total turnover of the lottery market reached 12.4 billion UAH. In this case, taxes from this amount was paid by less than 3% – 318 mln. The real volume of the gambling market, the Finance Ministry estimated at 40 billion, “the Draft of the new licensing conditions were prepared based on these data. Market participants are quite capable to pay that specified in the project amount as a fee for entering the market, resulting in the budget this year may further to a few hundred million UAH”, – say sources in the Ministry.

Recall, the lottery market works without licensing conditions since 2012 without a license from 2014. According to media reports, this was due to running during the presidency of Viktor Yanukovych scheme. So, in 2012, was adopted the law on lotteries lays on the Treasury the obligation to develop and approve new license. However, the act was amended transitional provisions providing that prior to the approval of the Ministry of Finance of the new licensing conditions, operators work on existing licenses. Despite the fact that the validity of licenses all lottery companies came to an end in 2013, the predecessors of the present Finance Minister Alexander danyluk did not attempt to develop and approve new license. The lack of regulations has led to a drop in tax revenues contributed to the flourishing gambling clubs under the guise of lotteries.

In addition, no new license terms enable work to two major operators of the lottery market – the company “M. S. L” and “Patriot”, which the media called the operators of large Russian businessmen close to the Kremlin. In 2015, the two companies made the list of Russian legal entities in respect of which the Cabin has imposed sanctions. Despite this, these lottery operators still conducting business activities in Ukraine. If approved by Cambina new licensing conditions under the sanctions the company will not be able to obtain licenses, and their activity on the Ukrainian market of lotteries will be stopped.

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