Gambling industry in Ukraine leads growth in income tax payments

Kateryna Skrypnyk August 29, 2024

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Gambling industry in Ukraine leads growth in income tax payments

The gambling industry in Ukraine has emerged as a leader in the growth of income tax payments during the first half of this year. According to Danylo Hetmantsev, head of the Committee on Finance, Tax, and Customs Policy, this sector, which includes both bookmakers and online casinos, has significantly contributed to the country’s tax revenue.

Hetmantsev shared on his Telegram channel that 25,165 business entities reported tax payments for the first half of 2024, marking a 23.8 percent increase compared to the same period in 2023. In total, Ukrainian taxpayers declared 97.7 billion Ukrainian hryvnias ($2.5 billion) in taxes, reflecting a 41 percent increase or 28.4 billion hryvnias more than the previous year.

The gambling industry, in particular, showed a notable increase in tax contributions, with payments rising by 5.9 percent. Other leading sectors included financial companies with a 5.64 percent increase and metalworking manufacturers at 5.48 percent. Remarkably, income tax for gambling operators surged 7.3 times compared to the previous year, while personal income tax from the sector grew by 26.1 percent. Hetmantsev highlighted that in June alone, the gambling industry paid nearly twice as much in taxes as it did in June of the previous year.

In the first half of 2024, licensed gambling operators contributed 8.4 billion hryvnias ($207 million) to Ukraine’s budget, nearly three times the amount paid during the same period last year. This surge in tax revenue underscores the growing financial impact of the gambling sector in Ukraine.

In 2023, the top 10 gambling companies in Ukraine earned 54.92 billion hryvnias ($1.32 billion), a staggering 28-fold increase from the previous year’s 1.94 billion hryvnias, according to the open data platform Opendatabot. This index includes nine online casinos, two of which also engage in betting activities, and one lottery operator.

**Denis Dzyubenko, SiGMA Managing Director (East EU & CIS)**

However, there are challenges within the industry. According to Denis Dzyubenko, Managing Director of SiGMA in Eastern Europe, two major issues affect gambling companies across the region: restrictions on gambling advertising and high tax rates. In Ukraine, the absence of a specific law on gambling taxation has resulted in a steep 20 percent tax rate. This high rate, coupled with the costs of paying licence fees, makes the business increasingly expensive and, for some operators, unprofitable. Consequently, there has been a gradual decline in demand for gambling licences.

WHAT’S NEXT: SiGMA East Europe Summit powered by Soft2Bet, happening in Budapest from 2 to 4 September.