Ukraine Creates “PlayCity” State Agency to Replace Liquidated KRAIL

This move follows the liquidation of the Commission for the Regulation of Gambling and Lotteries (KRAIL) and is part of a broader effort to modernize and tighten oversight of the gambling industry. Below is an overview of the new agency, its functions, and the recent legislative changes that led to its creation.

1. Establishment of PlayCity Agency

1. Cabinet of Ministers Decision
   The government’s official representative, Taras Melnychuk, confirmed that the PlayCity State Agency will serve as a central executive body, responsible for implementing state policy in organizing and conducting gambling and lotteries.

2. Coordination by Ministry of Digital Transformation

   • The new entity will be directed and coordinated through the Deputy Prime Minister for Innovation and Minister of Digital Transformation, Mykhailo Fedorov.
   • This underscores the shift towards a more digitally-focused approach to gambling oversight in Ukraine.

3. Staff and Budget

   • 61 employees will staff PlayCity, matching the number of positions eliminated at KRAIL.
   • According to Member of Parliament Oleksiy Honcharenko, the new agency will operate under the 2025 budget previously earmarked for KRAIL—about 160 million UAH.

2. Background: Liquidation of KRAIL

1. Parliamentary Vote and Timeline

   • In December 2024, the Verkhovna Rada voted to dissolve KRAIL, effective April 1, 2025.
   • A new structure was mandated to handle regulatory duties and enforce stricter accountability for gambling operators.

2. Legal and Policy Shifts

   • The parliament also passed measures that ban gambling advertising, introduce higher penalties for violations, and pave the way for the formation of a new governmental body to regulate gambling.
   • In February 2025, the Cabinet of Ministers moved certain responsibilities from KRAIL to the Ministry of Digital Transformation.

3. Budget Reallocation

   • The 2025 budget allocated approximately 14.3 million UAH to the Ministry of Digital Affairs to manage gambling oversight.
   • With the liquidation of KRAIL, the remainder of its budget will support the launch of PlayCity.

3. Controversies: KRAIL’s Past and Regulatory Gaps

1. Detention of KRAIL’s Former Chairman

   • Ivan Rudy, ex-chairman of KRAIL, was detained in 2024 on accusations of supporting Russian online casinos.
   • A court decision placed Rudy in pre-trial detention without bail, spotlighting alleged corruption within the sector.

2. 1Xbet Incident

   • In 2022, the media uncovered that KRAIL had issued a license to an entity linked to the Russian gambling brand 1Xbet, known internationally for questionable practices.
   • Only after the intervention of President Volodymyr Zelensky and Ukraine’s Bureau of Economic Security were those licenses revoked. In 2023, 1Xbet fell under Ukrainian sanctions.

4. Goals and Expectations of PlayCity

1. Stricter Oversight and Transparency

   • With responsibilities consolidated under the Ministry of Digital Transformation, the government aims for improved regulatory controls, especially for online gambling operations.
   • Enhanced transparency is expected to mitigate past corruption and illicit licensing controversies.

2. Modernization of Gambling Policy

   • PlayCity will handle licensing, compliance checks, and enforcement against illegal operators.
   • The agency is anticipated to create a more robust environment that protects players and facilitates responsible gambling.

3. Alignment with European Standards

   • As Ukraine works towards greater integration with European markets, a reformed and well-regulated gambling industry can attract legitimate foreign investment while ensuring public safety.

Conclusion

The creation of PlayCity marks a new chapter for Ukraine’s gambling sector, following the dissolution of KRAIL due to controversies, alleged corruption, and regulatory shortcomings. By placing oversight under the Ministry of Digital Transformation and establishing a modern framework for licensure and enforcement, Ukraine aims to strengthen its gambling landscape, safeguard consumer rights, and root out illicit operations. Observers will be watching closely to see how effectively PlayCity fulfills these high expectations—and whether it can steer Ukrainian gambling policy towards transparency and integrity in the years ahead.