The legal gambling market in Ukraine has expanded rapidly over the past five years. However, the high taxation on player winnings is making the legal sector less competitive compared to the shadow market. Experts note that no country has successfully addressed this issue solely through restrictive measures and increased enforcement.

To balance the interests of the state, operators, and players, the State Agency for PlayCity proposes a tax reform inspired by international best practices. Currently, Ukrainian law taxes the entire payout, rather than the net win (win minus bet), discouraging players from choosing licensed platforms.

PlayCity’s proposed reform would tax only net winnings, lowering the financial burden on players and boosting the competitiveness of legal gambling operators. This approach aims to curb the shadow market, estimated to account for 30-40% of Ukraine’s gambling volume.

The issue of excessive gambling taxation is global. In the UK, plans to raise taxes on online and offline gambling in 2026 have raised concerns. The Betting & Gaming Council warned that higher taxes can push players toward illegal platforms, citing the Netherlands, where a 37.8% tax rate led to a 25% revenue loss for the market in 2025. Ukraine’s current taxation (10% GGR + 18% income tax) already imposes significant pressure on licensed operators.

The Ukrainian Gambling Council (UGC) also supports reform. Chairman Anton Kuchukhidze recommends:

Introducing unified legal terminology, including a clear definition of gross gaming revenue (GGR).

Replacing multi-layered taxes with a single GGR tax of 10-15%, similar to New Jersey (13%) or the UK (15%).

Regulating lottery operators separately from casinos and blocking imitation mechanisms.

Strengthening sanctions against illegal operators, including financial transaction blocks via cooperation with the NBU and payment providers like Visa and PayPal.

These reforms require the rapid implementation of Ukraine’s State Online Monitoring System. Once launched, this system is expected to modernize the fiscal management of gambling and enhance the legal market’s competitiveness.

Ukraine’s push for gambling tax reform aims to align the legal market with international standards while protecting players and state revenues.