Ukraine’s gambling market in 2025 is undergoing changes that could boldly be called revolutionary, Kyiv Post has previously reported. Its development has been marked by an increase in tax revenues (at least during the first three quarters of this year), the fight against Russian dominance, and the creation of a new Association of Ukrainian gambling operators.
But the most important factors were the structural changes in state regulation. Primarily, policy-making – the formation of state policy in this very sensitive sphere – has come under the remit of the Ministry of Digital Transformation.
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Another key element of these changes was the creation of new state agency Playcity, which is tasked with implementing this new policy. We spoke with Hennadiy Novikov, the head of Playcity, who visited the Kyiv Post newsroom to answer our questions.
Kyiv Post (KP): Mr. Novikov, how would you rate the first six months of Playcity’s operation on a five-point scale?
Hennadiy Novikov (HN): I think a four. Not everything that was originally planned was achieved within the timeframe we expected.
KP: What major achievements can you measure or demonstrate? And what was the biggest failure during this first year?
HN: Regarding achievements – let’s start with the fact that we launched the new agency quite quickly. We managed to launch the new body in less than a month and a half. We resumed the licensing process, as this required a series of actions from us, the Ministry of Digital Transformation, and the Cabinet of Ministers to adopt new licensing conditions and a regulatory framework.
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Licensing began in early autumn. We launched the long-suffering tender for the development of a monitoring system. Currently, the first stage of work is being accepted.
We also began restarting the lottery market, which had been unregulated for 12 years – this process is still ongoing. We have also actively started fighting illegal advertising. This never existed in Ukraine before: no one blocked TikTok pages, and there was no mass fight against illegal casino ads on Instagram.
KP: And what didn’t work out?
HN: To be honest, I can’t say there was a direct failure anywhere. We would have liked to do some things faster. Regarding the monitoring system, we were limited by time. We began in the summer, created technical requirements in a month, and consulted with leading IT companies. However, because unused funds “disappear” at the end of the year due to budget legislation, we had tight deadlines for development.
The system is technically complex. According to estimates by leading Ukrainian IT companies, its development typically takes up to 13 months, but we had only four before the end of the year. Consequently, the decision was made to split the tender into two stages to save time. We are implementing the first phase this year (which is currently in the acceptance stage) [as of December 2025] and will return to the second phase in early 2026.
Frankly, the licensing digitalization process has taken a bit longer. A government decree was only recently adopted, but this is our priority, and we will do it.
Photo: Playcity Press Service
Another thing that “didn’t work out” – though it’s not entirely our fault – is that from a market perspective, we are cautious in our forecasts regarding tax revenues from businesses at the end of the year. There is a problem with banking services and the illegal sector. The situation is difficult, and I believe this is a loss for the state of Ukraine. We lose every day: in taxes, in the development of a civilized market, and in player protection.
KP: Do you mean the high share of the illegal market?
HN: Yes. The Association of Legal Players conducted a study, and according to their estimates, the illegal market share is about 40–55% for online operations. That is a lot.
I don’t have full statistics for the country, but we communicate with the market. Legal operators with a land-based presence say: “We open a slot machine hall or a casino, and illegal halls grow around us like mushrooms.” I tell them: report this directly to the BEB (Bureau of Economic Security).
They send us lists – there are dozens of such halls for every legal one. We forward this information to the BEB because we are not a pre-trial investigation body. By law, we are the regulator of the legal market.
PlayCity acts as a coordinator here: we collect signals from the market and work with the BEB, the NBU, and the banking sector to create systemic conditions under which illegal business becomes economically unfeasible. The Ministry of Digital Transformation team is the driver of industry reform and the proactive manager of public sector interaction.
According to poor bureaucratic logic, one could say: “Everything is fine in the legal sector, we regulate it, and what’s outside of it doesn’t interest us.” But beyond those limits is an objective reality: 50% of online business is in the shadows, and there is illegal offline business. The state that decided to legalize this market is losing.
Photo: Playcity Press Service
If the trend doesn’t change and we don’t create unfavorable conditions for illegals and normal rules for the legal market, the reform will not bring results. This will end poorly for everyone.
For example, with a hypothetical moratorium. Because when people say “all casinos are bad,” it’s often a reaction to illegal establishments. People don’t really distinguish: someone goes to a pirate site to watch a movie, sees a casino ad – who’s going to ask about a license there?
But a moratorium won’t mean the business will disappear. It will mean that 100% of online gambling will operate illegally. Player rights won’t be protected, and the state will receive nothing. Where the funds from illegal casinos go is a big question: both regarding financial monitoring and the financing of terrorism or the aggressor state. We see that the illegal casino brands we block are also present in the Russian Federation.
KP: What was the most difficult task to implement this year?
HN: Probably the monitoring system tender: preparing and launching it correctly. It was also difficult to establish a dialogue with the market. For example, quarterly reporting. We began demanding reports for the second quarter, which they had never submitted. We fined, I believe, 7 companies. And that was it – by the third quarter, we had 100% reporting, and it’s already electronic (we changed the bylaws).
We don’t aim to collect as many fines as possible. The goal of regulation is order and transparency. Fines are just a method.
KP: How many new licenses have you issued and how many sites have you blocked?
HN: About 2,500 [entities] were blocked. As for new licenses, 34 organizers are currently licensed. This year, licenses were issued for both GGOs [gambling game organizers – ed.] and B2B [service providers for game organizers – ed.]. In total, 3 GGO and 10 B2B licenses were issued throughout the year, plus licenses for gaming equipment (these are quite numerous, as there can be as many as 10 per single organizer).
KP: Regarding tax revenues: have they increased this year, and what are the forecasts?
HN: Overall, that’s a question for the State Tax Service. My forecasts are cautious. Due to the large share of the illegal market and banking service issues (effectively a monopoly on services), tax revenues for the 3rd and 4th quarters will likely drop. Short-term fluctuations are possible, but the strategic goal is a stable, predictable model where market funds are controlled.
There is a problem with individual operators that have suspended activity. This is a matter for law enforcement, but from a tax perspective, it’s a loss. The customer base of a suspended legal operator doesn’t move 100% to other legal ones. Some go into the shadows, others to clones. For example, there was Parimatch, which fell under sanctions. Now there is an active illegal operator, Parik24, on the market. Similar name, marketing, branding. We block them, but they work aggressively. I have an internal conviction that this is connected to Parimatch.
KP: Playcity replaced KRAIL, which had a very controversial reputation. Are you a new team? Do you plan to reduce the influence of the human factor on the agency’s activities?
HN: KRAIL was, shall we say, not very effective. We definitely aim to remove the human factor: digital licensing, monitoring system. For example, how did blocking illegal sites work at KRAIL? There were 3-4 people searching for sites via Google – that’s a monkey job. We built a tracking system: we entered all blocked sites, and the system automatically found their working mirrors. We allowed citizens to submit complaints. Now one person handles this instead of five. And the number of blocked illegal sites has significantly increased.
Photo: Playcity Press Service
Regarding the team: today, there are 43 people with me at Playcity. That’s very few. Salaries are low (the average salary of a chief specialist is 17,000 hryvnias), so there isn’t a long queue. I invited a new team, but part of this team consists of people from KRAIL who showed a readiness to “work and live in a new way.” And I myself worked at KRAIL, let me remind you. If we had formed the staff through standard “from scratch” competitions, we still wouldn’t have launched anything due to limited resources. But this way, we have results.
KP: Regarding the state online monitoring system. When will legal operators be connected?
HN: We are currently accepting the system. Next is the start of operation. By law, operators have six months to connect. We expect that by the end of next summer, the system will be fully operational with all operators connected. This is a complex integration process – there are no pre-existing protocols, so six months is actually quite fast.
KP: Could you please tell us a bit more about the content of the monitoring system?
HN: For legal operators, it removes baseless accusations. The system acts as a digital ledger where all operations are visible: deposits, bets, and payouts – from the moment money enters until it leaves. For the state, it is an objective control tool. It is also a matter of tax fairness. However, the Tax Code needs adaptation. Currently, the 23% winning tax is interpreted such that if I bet 1,000 UAH and win 100 UAH (totaling 1,100 UAH), the tax is levied on the entire 1,100 UAH. This means the player receives less than they originally bet. It is an absurdity that pushes players toward the illegal sector.
KP: How is your interaction with the Ministry of Digital Transformation?
HN: The interaction is excellent. They are the drivers of the reform – the policymakers who set the rules – while I am responsible for execution. Regarding global issues, such as the winning tax, we discuss them collectively.
KP: The lottery market. When will you be able to restart it?
HN: Let’s start with the fact that for a long time, market operators worked under old rules (licenses expired even before 2014). KRAIL was unable to adopt new conditions. Together with the Ministry of Digital Transformation, we adopted new licensing requirements. There are three main changes:
A 3-year license (instead of 10). Full reporting (previously, reporting was formal and paper-based). Restricted online distribution: one license equals one website and one app.
A tender for three licenses has now been announced. The deadline for submitting documents is December 29. Most likely, local operators will apply. For international ones, the law needs to be changed. These three licenses represent over 60 million UAH for the budget annually in license fees alone.
KP: Regarding the so-called “Registry of Ludomaniacs” – persons with restricted access to gaming. Will it be digitalized?
HN: Yes. There is a registry now (12,500 entries) inherited from KRAIL, but it is inconvenient. We are developing a new product based on the Diia Engine. The goal is to protect vulnerable categories. This is not a registry of “sick” people; it is a self-exclusion registry.
KP: Will players be able to restrict themselves through the “Diia” app?
HN: We plan to make it available through the portal. The maximum term for self-exclusion is 3 years.
KP: Please tell us, what is the current liability for operators who allow such people to play?
HN: The fine is five hundred minimum wages, which is 4 million UAH. Moreover, if an operator allows such a person to play, they must compensate the player for their loss tenfold – directly to the player (the self-excluded person). So, they have to both pay the fine and pay out 10 times more than the person lost.
KP: So, does this mean operators are now genuinely trying to prevent such people from playing?
HN: The illegal market can burst in with some “trashy,” aggressive advertising, earn even more than a legal player in the moment, but quickly disappear for various reasons. Therefore, purely ideologically (I won’t speak about individual cases now), a legal operator does not need a person with an addiction. They are more interested in a player who can stably spend, say, 5% of their income on gaming every month.
In the gambling business, there is a metric called LTV (lifetime value): how much money a player brings to the company over their entire “life” with the product. The cost of acquiring a new player is very high: you pay for traffic, you pay the team. A person suffering from addiction, most likely, brings their last funds. And those are usually not large amounts.
Photo: Playcity Press Service
There, it’s already a pathology: a person goes and sells something from their home to lose it at a casino. Then comes a mountain of problems. Interaction with such a person is difficult, and the money is “not the right kind.”
Therefore, a civilized market – which “white-label” players and we both strive for – is one where gaming is perceived as entertainment. So that people do not participate in gambling to their own detriment. It should be a choice: I have free funds, and I decide whether to go to the cinema, buy a ticket for 200–300 UAH, or place a bet at a casino. I make a choice, get an emotion, and stop after that.
The state’s task is not to ban entertainment, but to create conditions where it does not harm the individual. That is why we are investing in a digital self-exclusion registry and communication with citizens and organizers.
KP: How does Playcity see its role in cultivating responsible gaming?
HN: Let’s divide this into response tools and communication tools. What we are already doing – fines for access violations, monitoring – are tools for “educating” the market.
The Ministry of Digital Transformation has adopted new rules for responsible gaming, and limits are currently being developed. Our task here consists of two parts. First, to ensure control over the market’s implementation of these rules. Second, to communicate this to the people.
For example, take that same registry of persons with restricted access to gambling establishments. On one hand, we must technically create the right product – convenient for the player, for us, and for the market. On the other hand, we must inform people that such a registry exists. I am sure that the majority of the population today simply does not know about this restriction tool.
The involvement of the National Bank of Ukraine is equally important. Without synchronization with the financial regulator, it is impossible to effectively counter illegal market schemes – p2p transfers, miscoding, and bypassing financial controls through which illegal operators evade responsibility. The Ministry of Digital Transformation is currently helping to involve the banking regulator in the reform.
This is our role: working with the market and working with citizens. And, of course, a separate role in communication is explaining to people what the illegal market is, why it exists, and what risks it poses to both the player and the state as a whole.
