Shvets Oleksii, Co-Owner, Premier Gambling Management, chats with Lyudmyla Kyrychenko
Could we start with a brief description of Premier Gambling Management?
Premier Gambling Management is a gambling marketing consulting partner for local and international partners wishing to unlock and foster the potential of gambling in the Ukrainian market. Our mission is to create an innovative gambling culture that contributes to the philosophy of the ethical entertainment industry, in accordance with all legislative principles and innovative solutions. Our company provides knowledge, consulting, training, manpower issues and operational management to partners and investors engaged in recruiting opportunities in the Ukrainian market.
PGM is a company of more that 150 professionals that has been operating locally and internationally for more than 15 years.
How have the new casinos in Ukraine coped gaining trained staff to work in their casinos?
Yesterday, the training and manpower issues were carried out by local forces of the casinos on their premises. Such a framework, with fully operating enterprise, is rather inconvenient and has been justified only at the launch stage, when the equipment, rooming and coaching staff are not involved in the game process. After the launch, the costs of staff training increase significantly.
Today, the training and manpower takes place only once the institution is looking for current staff. Young people who decide to start their professional career in gambling have to look forward to an opportunity rather than make a decision on their own. The presence of permanently functioning training centers on the labor market would allow young people to receive vocational training without reference to the seasonality and randomness of opening new institutions.
What plans and aspirations do you have for PGM?
After being generally prohibited for more than a decade, a potential billion-dollar gaming market is restarting in Ukraine. The new gaming law, which entered into force in August 2020, now permits casinos (physical and virtual), slot machine halls, betting (except regarding virtual sports and virtual events), and online poker games. Knowing the market and having been working in the industry for over 15 years, PGM provides a 360-degree counselling ecosystem starting at the very beginning of the pipeline and supports partners further on providing marketing and strategic research, forecasting trends and fluctuations of the market, helping establish collaborative and effective governmental relations, and further operational management etc.
PGM is not a service company but a general ecosystem tool to enter the Ukrainian market and mainly focuses on building a great investment market, transparent and smooth for investors and partners.
We provide services for marketing and strategy, governmental relations, legislative counseling, establishment of business, operations and managment, manpower issues and training, operations management innovation, a gambling academy and gambling tourism.
Currently PGM is in the process of ongoing collaboration with the state gambling regulatory body in Ukraine, KRAIL, supporting and launching the gaming industry employers’ association and trade union. Joint activities are underway to create professions (classifier of professions) in the gaming industry and further define the requirements for them. The establishment of an international gambling academy to train new specialists, confirm and improve the qualifications of personnel is taking place now.
Another potential area is gambling tourism which is undertaken by PGM’s Premier Travel department. We work with the National Sports Poker Federation, the UA.Million poker series and land-based casinos.
Give us three reasons why a manufacturer supplier looking to supply into Ukraine should work with your organisation?
We don’t not work as distributors, and are not looking forward to being one, nevertheless we are working on
developing new products ourselves and would love to share our distribution ecosystem with partners and friends. Also we are happy to provide SaaS.
Have you found since casinos have reopened any changes in visiting habits? Do they now come in later in the day or earlier than before?
The situation is unstable and requires a national counsellor. Legislation changes like the weather. Operators are required to obtain a license from the Gaming and Lottery Commission. License fees for physical casinos vary by location, with fees lower for casinos located outside the capital, Kyiv. License fees for slot machine halls, betting and online activities are fixed regardless of location. In addition, investors may obtain a free, 10-year investment license, which includes permission to conduct physical games in casinos, if they construct a five-star hotel with no fewer than 200 rooms (in Kyiv) or 150 rooms (outside Kyiv).
There are additional challenges brought by the pandemic of 2020, with borders closing, low margins, and the lack of experience for the previous 12 years that resulted in a deficit of interest for international visitors. A lot of marketing has to be done to promote the industry.
Are casinos seeing any changes with player preferences? Are slot machines remaining more popular than table games and how are multiplayer roulettes performing?
Now the Ukrainian market is at the stage of formation, for example, the American model assumes a larger number of slot machines and the Asian model has a larger number of gaming tables. And how the Ukrainian market will be formed, this question can be more or less accurately answered no earlier than in a year in our opinion.
Tell us about some of your projects and what they have involved?
Our company is currently carrying out several projects. One is the first investment project in Ukraine, is the building of a five-star hotel complex with a total of 330 rooms. The opening is scheduled for January 2022. We are currently implementing a project in Asia, where we will implement the American-Singaporean model “all under one roof” integrated resort model.
Where do you see the future of the land-based casino industry in Ukraine if the taxes and hotel charges remain at the current level?
PGM sees great potential and proclaims time for investors opportunities in diverse markets such as new integrated resort models. PGM supports licensing and commissioning incoming tourism. Physical casinos and slot machine halls generally must be located within four- or five-star hotels. The government determines the star rating for Ukrainian hotels, and may also designate special gaming zones in the future.
To obtain a license, there are certain other requirements for gaming operators. Operators of online activities will be able to accept bets from players located within and outside Ukraine, although the online systems for such games (e.g., servers and other equipment) must be located within Ukraine.
Bets and pay-outs must be made only in the national currency, Ukrainian Hryvnia / UAH. Casinos and slot machine halls are required to maintain certain numbers of tables and slot machines, respectively, and all online casinos, poker games and bets must be conducted through a Ukrainian domain (i.e., URLs ending with “.ua”).
As for owner recognition and registration, there are some restrictions on who may be the shareholder or ultimate beneficial owner (UBO) of a gaming operator. The operators’ shareholders must not be residents of certain sanctioned countries, specifically Russia, Iran and North Korea.
Working with competent counsel when preparing the application should help to avoid unnecessary rejections and delays.
Common issues with opening gaming operations in a new jurisdiction include technology and payment challenges. An operator must ensure that its technology platform is able to verify the location of online players to ensure no ineligible persons, or persons from ineligible countries, are allowed to participate. Both brick-and-mortar and online gaming establishments can find it difficult to provide a range of payment and e-wallet loading options given system integration requirements, local and foreign legal requirements, varying payment-card network rules, data privacy and security issues, and local systems requirements. It is important to take these issues into account when developing the technology and payments platforms to ensure the most effective, compliant and full-featured rollout.
What do you think is the most necessary resource, product or service that is missing now to move forward the gambling market in Ukraine and what challenges do you see in obtaining it?
The fast-moving market always lacks professionals and today for Ukraine it’s both a challenge and a curse. There are internal and external obstacles that slow down the gambling market opportunities today.
Lack of professional operational teams to start integrated resorts or a lack of knowledge in marketing, law consulting standards and new judicial law can result in sub-optimal rates for an establishment and may hide the benefits of the new opportunities the Ukrainian market obtains.
When deciding to enter the market, foreign investors may choose whether to build their own establishment, operate entirely online, or partner with existing hotels and resorts. In some cases, operators may benefit from lower license fees if establishments are located outside of Kyiv, including in ski resorts in the Carpathian Mountains or along the Black Sea Coast. Developments in this sector are happening quickly, and Ukraine is expected to soon become an important market in the gaming industry that will be of interest for foreign market players.
Apart from that, there is a high deficit in manpower issues, training and post-educational projects providing knowledge development and support to foster the industry within the country’s landscape.
