Why is the illegality of lotteries invisible to politicians and anti-corruption officials?

Forming a new branch of economic activity is never easy. First of all, because any regulation of business by the state and the emergence of requirements for standardization of rules, payment of taxes and the need to comply with consumer protection standards provoke resistance from those who are accustomed to working outside the law.

The domestic gambling market, which began operating legally only in 2020, after more than 11 years of prohibition, was no exception to the general rule. Even during the procedure for the preparation and adoption in parliament of the Law of Ukraine “On state regulation of activities related to the organization and conduct of gambling,” information attacks began to discredit the very idea of ​​​​the emergence of legal gambling. And this campaign continued after the law came into force, the formation of a national regulator (the Commission for the Regulation of Gambling and Lotteries - CRAIL) and the emergence of the first licensed gambling business organizers.

Oddly enough, even individual politicians joined in the attacks on the legal gambling business, who consistently accused it... of all those shortcomings and problems that are inherent in the illegal business! But at the same time, a whole segment of gambling remained unnoticed by critics, which quietly continued its work even during the time of bans on gambling.

The lottery business, under the banner of which both illegal online casinos and other formats of gambling have existed and continue to exist, remain “invisible” to politicians, officials and anti-corruption officials. As Anton Kuchukhidze, Chairman of the Ukrainian Gambling Council, rightly notes, the number of illegal gambling halls and platforms is constantly increasing, but most people do not want to notice this problem. But in the information space you can very easily find dozens of publications with outright criticism of the legal gambling market. At the same time, the same lotteries quietly continue to operate as an online casino or bookmaker.

By the way, they work outside the legal framework. Since the licenses of state lottery operators expired back in 2014. In addition, all lottery operators operate under the main KVED 92.00 - organization of gambling, but not a single lottery operator is among the licensees who have received a license to organize and conduct gambling. And this is quite easy to check by referring to the corresponding section “Registers and Lists” located on the official website of KRAIL. There are no lottery operators there, but the companies’ websites carry out activities that have signs of gambling, namely bookmaker bets, online casinos and slot machines.

However, such facts remain unnoticed by politicians and journalists, who regularly complain about the “small taxes” that the state receives from the legal gambling business. Reproaches, as a rule, are made without relying on numbers. Because, for example, in the first half of this year alone, the state budget received almost 3 billion hryvnia in taxes alone from gambling!

At the same time, banks, which are quite meticulous about all payments made to legal organizers of the gambling business, also “do not notice” the funds transferred in favor of illegal lotteries: these payments are not blocked.

There are several reasons why there is such a “tacit agreement” regarding lottery operators and their betting acceptance as online casinos and bookmakers.

First, such lotteries may have the support of corrupt politicians and officials, which makes them difficult to combat.

Secondly, politicians and anti-corruption officials may not have sufficient information about the size and scope of such lotteries, or they simply are not interested in this problem.

Thirdly, banks may not block payments to lotteries due to the fact that they may be attracted to this business due to making a profit from commissions for servicing such payments.

In general, the problem of illegal lotteries and their betting as online casinos and bookmakers is complex and multifaceted. To combat this phenomenon, not only legislative changes and strengthening of control are needed, but also increased public awareness about the consequences of using the services of illegal immigrants. In any case, this is a serious problem for the state, since it loses significant funds from non-payment of taxes due to the illegal activities of lottery operators. However, reform of the gambling market continues, and Ukraine is gradually moving towards a civilized gambling market. Accordingly, this problem will be gradually resolved.