The Impact Of The War In Ukraine On The Global Gambling Market
The Impact Of The War In Ukraine On The Global Gambling Market
Ukraine had only just lifted the ban on gambling in 2020, and this opened the door for foreign investment to come in again. Gambling was first banned in Ukraine in 2009, but President Volodymyr Zelensky pledged shortly after he was elected into office in 2019 to legalize gambling.
The aim was to encourage investments in tourism with casinos but due to weak policies, Ukraine’s reborn industry fell victim to illicit gambling activities with heavy Russian influence. Ukraine has only spent the past year derisking the business and increasing budget revenues from the gambling sector with the help of sanctions, banking regulations, and parliamentary control.
Ukraine’s refined gambling laws now allow for a broader range of gambling activities than initially intended. The law also created a regulatory body, the Commission, to license operators based on set criteria and an online monitoring system to facilitate the taxation of gambling companies and help those with gambling addiction.
The new law marked the start of a thriving Ukrainian gambling economy as several top gambling companies opened shop in the country, including firms like Parimatch, which was previously operating in the country before the 2009 ban.
The introduction of DIIA, a Ukrainian electronic service for government-related tasks, has revolutionized the verification process. This service allows players to swiftly and securely validate their identities using their existing digital government-issued IDs. This simplified verification process ensures that players can enjoy faster withdrawals, making their gaming experience much more convenient. In contrast to the gambling speed of payouts in Australia, where the timing of withdrawals can vary significantly based on the chosen online casino, primarily due to the absence of a centralized system..
Gambling Market in Ukraine During the War
The local gambling market in Ukraine has struggled since the conflict broke out. Although it’s possible to do business in a warring state, gambling businesses will not get priority in times like this. Therefore, the local market has struggled to draw in investors to grow gambling businesses.
People are more concerned about the potential loss of property or lives to pay attention to gambling or making a business out of it. Companies like Parimatch have reported losing some of their team members who have been volunteering for Ukraine to help intercept Russian communications and push propaganda.
- Parimatch has been donating thousands of euros to the Ukranian army and local charities.
- BeyondPlay, a new gaming operator, created a fundraiser that met its goal of £250,000.
- Similarly, GeoComply and CDC Gambling Reports have supported the Ukranian efforts via logistics, monitoring, and fundraising.
Russia’s Gambling Market
Russia’s actions have isolated the country from the rest of the world, but the country may not be affected much by this despite being a primary instigator of the violence. Russian teams have been banned from several international sports events, and several gambling businesses have withdrawn from Russia in solidarity with the people of Ukraine. However, gambling businesses still allow bettors to gamble on Russian events, which seems counterintuitive to the existing ban.
Casino gambling is only allowed in Russia in four land-based locations, and the country also recently banned foreign casinos in 2021. Besides online sports betting, online gambling is not legal in Russia, but many Russians have their way around that by playing in foreign casinos and using VPNs as long as they are able to deposit money and withdraw winnings.
However, since Mastercard and VISA suspended their services in Russia, it’s illegal and almost impossible to gamble online. Compared to Ukraine, Russia is not suffering the disintegration of its workforce in the gambling sector. And the losses the country is seeing are just from a small number of people who used to gamble online illegally, revenue that goes to foreign countries anyway.
Potential Damage To The Global Gambling Market
The Ukraine war has worsened hunger in some of the most vulnerable places in the world, relying on the country’s grain exports. But we can’t say the same for the global gambling market. The impact of the war is measurable only on the gambling market of neighboring Eastern European countries like Poland, Czechia, Romania, etc. While the war could be having an effect in even the farthest country to Ukraine, most gambling markets do not feel the impact of the war.
And with massive supply chain issues and accelerating inflation across Eastern European countries, one would expect that the fall in income should reduce how much money people are willing to put into gambling. But that’s not the case.
Here are some notable trends in Eastern European countries:
- Online gambling has been fully regulated in Czechia since 2017, and the Ministry of Finance reports GGR growth from about €330 million to €800 million in 2021. Prior to 2017, the gambling sector had maintained a growth rate of 20% since 2010. The growth spur in the last few years is believed to be a result of the explosive growth of online casinos since COVID-19. Czechia ranks tenth amongst European countries, with consistent yearly growth slightly above 40% despite the ongoing Ukrainian war.
- Romania remains one of the fastest-growing markets for online gambling in Europe. The country’s 88% yearly growth in 2020 remains the highest growth trend by any regulated European country. Romania’s gambling market has demonstrated further growth in the past three years as the government looks to adjust tax policies on gambling to assist the development of the market. An example is its amendment to the 40% proposed tax on gambling withdrawals.
- Poland’s Ministry of Finance report that regulated online GGR exceeded €600 million in 2021, almost 50% higher than 2020. Betting takes more than 50% of the market share, while casino games follow with 23%. Gambling is toughly regulated by a state monopoly, but the casino games market is projected to grow by an annual growth rate of 7.14% (2022 – 2027). The industry shows no signs of slowing down despite the war in Ukraine.
Recent studies of the Eastern European market have also shown an increase in the region’s interest in betting. This pattern exhibits similar activity peaks throughout the weekends and around important sporting events. The general interest remains the same despite the increasing crisis with the cost of living.
The rest of Europe and the world are hardly moved by any of these trends as online gambling has remained trendy, and the global gambling market continues to grow.
Since you’re here …
… we have a small favour to ask. More people are reading Side-Line Magazine than ever but advertising revenues across the media are falling fast. Unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can - and we refuse to add annoying advertising. So you can see why we need to ask for your help.
Side-Line’s independent journalism takes a lot of time, money and hard work to produce. But we do it because we want to push the artists we like and who are equally fighting to survive.
If everyone who reads our reporting, who likes it, helps fund it, our future would be much more secure. For as little as 5 US$, you can support Side-Line Magazine – and it only takes a minute. Thank you.
The donations are safely powered by Paypal.
