In April 2025, Hennadii Novikov was appointed Head of PlayCity, Ukraine’s new state agency for gambling and lottery oversight.
His election was undertaken to overhaul the governance of Ukraine’s stalled gambling sector, viewed as an economic and security threat by the Council of Ministers.
Novikov’s tenure has been led by the development of the State Online Monitoring System (SOMS), designed to give authorities continuous visibility of activity across Ukraine’s licensed gambling market.
The system sees an under-conflict Ukraine move towards real-time, data-driven gambling regulation, replacing its reliance on traditional licensing and periodic reporting – a dynamic outpacing many European counterparts…
_______________________
Modern gambling regulation goes beyond market licensing, periodic reporting and retrospective inspections. The industry operates digitally, processes millions of transactions and changes almost instantly. Effective oversight must therefore operate at a comparable speed.
This principle lies at the heart of Ukraine’s vision for gambling reform.
Our goal is to build a transparent and lawful market in which regulatory decisions are based on verified data. Digitalisation is not an additional component of the reform. It is its foundation.
The SOMS is the key instrument for implementing this approach.
From static reporting to data-driven regulation
Traditional supervision models were designed for a less digital and less dynamic market. Today, thousands of gambling operations can take place within seconds, which means periodic reporting alone cannot provide regulators with a complete and timely picture.
SOMS enables the state to continuously receive and process data from licensed gambling operators in a timeframe close to real time.
The system records information on bets, returns, winnings and other operations within the gambling environment. This allows the regulator to compare actual market activity with operator reporting and gives authorised tax authorities access to primary transactional data needed to verify gross gaming revenue, player-related taxes and other mandatory payments.
SOMS can process up to 10,000 operations per second, while its scalable architecture allows its capacity to grow alongside the market.
The system also covers game results, gambling equipment, gaming substitutes for the national currency and processes taking place directly within the game. It therefore provides a digital view of the legal market — from the deposit of funds and acceptance of a bet to the determination of the result and payment of winnings.
For business, SOMS creates a standardised channel for data transmission. For public authorities, it provides structured information that can be analysed instead of manually assembled from separate reports.
Effective oversight
Digital oversight must not compromise player privacy.
SOMS does not monitor a player’s financial activity outside the gambling environment. Player-related data is depersonalised and transmitted through secure data-exchange channels. Each transaction is digitally signed by the operator and verified by the system before it is processed and stored. This ensures that information enters SOMS only from verified sources and that the integrity of the data can be confirmed.
The system is also designed to preserve data continuity during temporary connectivity failures or technical disruptions. If information cannot be transmitted to SOMS, transaction data continues to be recorded and stored automatically within the operator’s own system. Once the connection is restored, the accumulated data is automatically transmitted to SOMS through the standard API. This ensures that operations carried out during the disruption are not lost and remain available for regulatory analysis.
Once received and verified, transactional data is stored and structured within SOMS. This allows authorised authorities to analyse transactions, identify inconsistencies and assess risks without directly identifying individual players.
Access to SOMS data is differentiated according to the legal powers of each public institution. The gambling regulator and authorised tax authority receive the information necessary to perform their functions.
Other state institutions and law-enforcement agencies may obtain information through the regulator following a formal request, provided they have a clear legal basis for doing so.
This model supports cooperation between public authorities without creating unrestricted access to sensitive information.
For Ukraine, cybersecurity and operational resilience are not abstract technical considerations. The country’s experience of maintaining digital public infrastructure under sustained cyber threats has demonstrated the importance of continuity, traceability and recovery. SOMS follows the same principle: data protection and system resilience are treated as core elements of effective regulation.
Ukraine learning from international experience
Ukraine developed its approach after analysing jurisdictions that already use centralised digital tools for gambling supervision.
International experience shows that technology can strengthen regulatory visibility, fiscal transparency and enforcement. However, no system can simply be copied from one market to another.
Every jurisdiction has its own legislation, tax structure, technological environment and market risks. Our task was to identify effective international principles and adapt them to Ukrainian realities.
These principles include standardised data exchange, continuous monitoring, secure processing, protection against retrospective alteration of submitted information and access to reliable primary data for authorised public bodies.
SOMS has therefore been designed around Ukraine’s regulatory framework and the practical needs of its legal gambling market.
In harmony with state & society
For the state, the main benefit of SOMS is transparency.
Structured and timely data allows the regulator to understand the actual scale of the market, detect inconsistencies, identify unusual patterns and focus attention where there is a higher risk of non-compliance.
This supports a risk-based approach to regulation and strengthens fiscal transparency. Instead of relying solely on reports consolidated by operators, authorised authorities can verify relevant payments using primary transactional data.
Technology does not replace regulatory judgement. It gives regulators the evidence they need to make faster, better-informed decisions.
For society, a transparent gambling market means common rules, verifiable tax payments and fewer opportunities to conceal violations. It also helps distinguish licensed operators that comply with regulatory requirements from illegal businesses operating outside the regulated system.
SOMS is also part of a broader player-protection framework that includes self-exclusion mechanisms, advertising controls, responsible gambling requirements and obligations imposed on licensed operators.
Reliable data helps the regulator assess compliance, identify systemic risks and develop more targeted measures before those risks become larger problems.
Benefits for the legal market
Responsible operators also benefit from digital regulation.
A sustainable legal market requires predictable requirements, standardised reporting and equal rules for every participant. A data-driven system reduces the scope for subjective interpretation and creates a more level playing field.
Operators should compete through their products, services and efficiency — not through different approaches to reporting or compliance.
Digital monitoring infrastructure is also an indicator of market maturity. For international businesses and investors, it demonstrates that Ukraine is building long-term regulatory institutions based on transparency and verifiable data.
The objective is not to create unnecessary complexity. It is to make compliance measurable and ensure that businesses following the rules are not placed at a disadvantage.
Building on evidence
Digitalisation is not simply the transfer of existing bureaucracy into an electronic format. It is a change in the regulatory model.
For Ukraine, this means moving from delayed reporting to continuous visibility, from fragmented information to structured data and from reactive inspections to risk-based oversight.
SOMS provides the technological foundation for this transition.