In 2020, Ukraine adopted a law on the legalization of casinos. In 2021, Michael Boettcher’s Storm International opened the first casino in Ukraine. Elegant Shangri La started working at the Fairmont Hotel.
The first months of work showed what difficulties and what advantages there are on the Ukrainian market. Darren Keane, CEO of Storm International for 13 years, speaks about this openly.
What other problems do we see in the Ukrainian gambling market?
The number one problem is the tax on winnings. If tax legislation changes, especially in relation to foreigners, then everything should be in terms of future investments in Ukraine. We say that because it is important for experts to be able to justify why a tax on winnings will negatively affect the development of the sector. It is important that the opinion of experts is listened to, and the law would be good for everyone, including, more importantly, for the Ukrainian economy. Sometimes people come up with a law that, in their opinion, is suitable for a small group of people, but they do not see the whole picture of the opportunities for the Ukrainian gaming market. And we, as industry experts, would like to be able to provide advice. It is not necessary that we give this advice, but it would be nice to heed the advice of experts.
What is it like getting started in an immature market?
We are very pleased with the opportunity to come to the Ukrainian market, and we see a great future for this market. However, in all honesty, we do not really like the current situation. It is very difficult to operate in an environment where you enter the market, you invest a lot of money in a market where you have legal gambling, but there is no proper tax code. It can change at any moment. This is a very difficult situation.
We know that there are other international investors behind us who want to see what we are doing in this market before they also come to Ukraine. After all, when you open a gambling business in Georgia or Belarus, it is very simple. Everything is known in advance. You don’t worry about whether the law will change or not. Everyone wants the rules to be written in black and white. And this is useful for the country’s economy when the investor knows exactly what legislation and what opportunities for work, thus he can adjust his investment budget, operating budget, as well as his future investment plans.
Will we see the Shangri La casino in different cities of Ukraine?
We planned to open five casinos in Ukraine. But for now, we are very much waiting for the final version of the tax code, notes Darren Keane, Storm International CEO.
Will your company be able to operate in Ukraine without changes to the tax code?
A very difficult situation has developed because the law on the legalization of gambling was adopted without a law on taxation. But many companies, most of which are Ukrainian, and we ourselves entered the market in search of the best places to place. After all, the law allows opening only in hotels, and in Ukraine, there are not so many hotels that fit the conditions. Therefore, operators began to look for the best places without waiting for the tax law.
The old tax legislation and even some articles of the proposed tax law are still not very modern. Even very old-fashioned rules. Storm International is very happy about the fact that Ukraine has legalized gambling. But after months of work, it became clear that tax legislation needed improvements and a more business-friendly attitude.