KRAIL Member Arrested for Taking Money to Assist Licensing

Gambling regulations in Ukraine took center stage after a member of the country’s national regulatory body was arrested on suspicion of bribery.

Alleged Bribery

Ukraine’s National Anti-Corruption Bureau (NABU) arrested a member of the Commission for the Regulation of Gambling and Lotteries (KRAIL) Friday for allegedly accepting a $90,000 illegal benefit in exchange for providing assistance in the licensing process.

According to information provided by the Bureau, the arrest followed a covert investigation carried out in the summer of 2021. The investigation produced documented evidence for the existence of an illegal scheme related to facilitating the issuance of gambling licenses for premises in the city of Chernihiv and in the Zaporozhye region in exchange for large amounts of money collected by a member of the regulator.

The warrant issued by the authorities did not reveal the name of the member of KRAIL, but mentioned that he “was acting chairman of the Commission” at the time of the offense. That was enough for Ukraine media outlets to start speculations who that KRAIL member is, throwing around the name of Yevhen Hetman.

Ukraine’s gambling regulatory body was formed as an independent organization in November 2020 to take the lead in the new gambling regulation in the country. At the time, former NATO delegate Hetman was appointed as a member of the Commission due to his experience in the field of international relations and cooperation, running public and private enterprises and collaborating with regulators.

Regulation Far from Optimal

The high-ranking official arrest dented the reputation of the regulator and threw further doubt on the licensing process. It was already under fire by operators who have had their permit applications rejected, criticizing the Commission for not providing any insight as to why licenses have been denied.

KRAIL, which began the licensing process in February of this year with no final resolutions on taxes, licensing fees and technical accreditation, licensed to date only three online gambling operators, Cosmolot, Parimatch and VBET.

The Commission also issued 40 gambling permits to properties, among which are seven high-end hotels in the capital, allowing them to operate for a period of five years, while the cost of operation will vary on the type of building.

The controversial proposal to set a 10% flat tax rate on all forms of gambling received approval in July despite serious concern it would impact state and local budgets.

Also in July, KRAIL’s actions against illegal gambling websites to protect licensed incumbents and the regulated market led to 594 of them being blocked.