Online gambling has become commonplace in various countries around the world. Today, Ukrainians are becoming more and more accustomed to it. We may soon become the European hub of the gaming industry.
Online gambling has become commonplace in various countries around the world. Today, Ukrainians are becoming more and more accustomed to it. We may soon become the European hub of the gaming industry.
The transition to online began in the late ‘90s. It was caused by several important factors. It was at this time that the intensive development of the Internet and digital technologies took place, and thus the active digitalization of the population. Many sectors of the economy have begun to find a place in the virtual world. Among them was the gambling business.
“The problem was that you could raise money online. At that time, there were no appropriate tools. And as soon as the first payment solutions appeared on the Internet so that you could pay, transfer money to a gambling deposit, you had the opportunity to play online“ the head and founder of Gambleware solutions Lasha Shikhashvili shared his thoughts with us.
Today, Lasha is one of the leading industry experts who has been working in the gaming industry for about 20 years, and since 2013 he has been working in its online direction and even for three years worked as a director of an online casino network in Malta.
He recalls that initially this market was unregulated and this caused a lot of problems: “The main value of the gambling business and especially online when gambling becomes available is a responsible game. Therefore, all regulatory bodies are created so that there is no “wild West” so that people do not spend all their wealth in the casino.“
The first steps in the regulatory direction were made by the island states in the Caribbean. They have regulations of payments and licenses. Later, other countries joined in, so there was a choice of where to do this business — in Malta, Australia, New Zealand, African countries, the UK.
Also, a major factor that pushed the gambling business to migrate to the virtual world was the potential to attract a huge number of players. Because everyone has gadgets, they can play online. And do it around the clock and in any jurisdiction. Gambling becomes affordable entertainment, like a trip to the theater or the movies.
“To do this”, says Lasha Shikhashvili, “it is enough to reach the appropriate age, have a credit card and access to the Internet. And that’s it — you have registered and you can participate in the game.“
Anonymity also plays an important role: the player does not have to show his face and prove his identity, as is done in a land-based casino.
As a result, millions of players can be attracted to one online casino. And the big money as well. According to Lasha Shikhashvili, today 50–70 billion dollars are circulated annually in this segment of the gambling business. It is expected that in 2025 this amount will cross the figure of 100 billion dollars.
Ukrainian gambling also became interested in online in the early 2000s. However, soon the business found itself in a very specific situation when gambling in our country was outlawed for a long time. But when business is banned, says Lasha Shikhashvili, it starts looking for alternatives: “After the ban on gambling, many of those who gambled and organized it started looking for other jurisdictions, licensing zones. They bought the same Maltese licenses and worked in foreign markets.“
Of course, these companies have gained relevant experience online, although not as significant compared to those who have developed smoothly in this direction. But even such achievements can be used today and get the desired result. Especially since there are all grounds for this.
“We have a very large country and a very large potential in terms of intellectual and human resources. Many of the countries that have introduced regulation have a small population, and it is difficult to find the necessary staff there, so they have to be invited. Above all, this applies to gaming and IT companies that have developed their products. That is why these foreign companies were forced to open their offices in Ukraine, where there is such staff”, Lasha Shikhashvili said.
According to him, Ukraine can also take advantage of this factor because it will gain a competitive advantage. The main thing is to understand that a long break in the legal work of the national market has led to lagging behind the world, so we must act quickly and decisively. And this will allow us to become a European hub in the gambling business and gaming in general.
“One of the factors contributing to this is Malta’s shabby reputation”, said Lasha Shikhashvili. — “There were serious scandals related to money laundering. Malta was an offshore zone within the European Union. And because she wanted to grow this business faster and faster, she made some mistakes. Serious inspections were carried out by the central banks of several countries and the Central Bank of the European Union, which revealed these violations. So now not everyone wants to grow their business in Malta as before.“
In addition, this island nation has only a population of 400,000 and, like any small country, has a shortage of personnel to import. The minimum official salary here is at least 1 thousand euros. It is paid legally, “envelopes” do not pass here.
At one time, Malta was favored by Scandinavian gambling professionals, who were particularly attracted to the local climate. But their lowest level of payment is 2.5–3 thousand euros. Such high salaries put a burden on the local gambling business and lowered its profitability.
“That is why a window of opportunity for Ukraine has now opened. We can attract people and companies that are somehow disappointed in European regulations but want to develop, and they have the potential to do so. And for them, Ukraine now, even if it focuses exclusively on human resources, is just a Klondike. And this possibility cannot be neglected”, Lasha Shikhashvili is convinced.
He also adds that the arrival of foreign companies on the Ukrainian market will significantly contribute to its civilized development: “They are more experienced, they work according to the law and will demand the same from other players. Then they will be healthy competition for our companies.“
Another thing is that the state should react to such prospects and enter into an open dialogue on this issue with the business. First of all, this applies to the current taxation, with which the gaming industry has to work and which, according to its representatives, is extremely burdensome. This situation is intended to correct the bill № 2713‑d, which will make the necessary changes to the Tax Code. However, it was adopted only in the first reading and does not reach the second case. And this hinders the arrival of many investors on the Ukrainian market.
Due to this situation, we have a very small number of companies that have received licenses to work online. There were only 12 of them, and Lasha Shikhashvili doubts whether they all work online.
“There is one feature that distinguishes us from other jurisdictions”, he said. — “In Ukraine, only one online casino on one domain can be opened under one license. And in Malta, for example, you can open at least 100 casinos. Therefore, there must be a clear presence of a large number of companies. Then there will be more licenses. In developed countries, there are thousands of them, and here we have, let me remind you, 12“.
At the same time, he is confident that over time, the Ukrainian gambling business will become more and more immersed in online. And it’s not just about financial benefits, although every business is primarily focused on it. There are also sympathies based on age. Today, customers who are mainly interested in online are under the age of 45, older people prefer old school establishments. But over time, today’s young people will move to another age group — with their sympathy for online.
Cryptocurrency also plays an important role in popularizing online gaming. It is already used in Ukraine. Although opinions about it remain contradictory. Lasha Shikhashvili treats it quite cautiously: “I see many nuances, risk factors and difficulties in this. First, because it is a fairly unpredictable market. Companies need to have a professional who can evaluate their actions when accepting payments in cryptocurrency. There are different types of wallets, different types of storage, different types of conversion. But it is likely to develop, and I do not rule out that shortly there may be a cryptocurrency that will be specifically “sharpened” and created for the gambling business.“
According to Lasha Shikhashvili, the state should also be interested in strengthening the position of the online gambling industry, because it is quite easy to control its actions in casino management systems. “You will not be able to change the results of the game. It is an interconnected chain between a payment operator, a gaming operator, and a gambling operator. You can’t make a deal with everyone. It is beneficial for the state, because with such clear taxation, casinos and businesses try to earn as much as possible, and the more they earn, the more the state gets.”