The gambling business of Russia is 350 years old. Since 1667, the Russian authorities began to regulate the organization and conduct of gambling. This type of activity was one of the first to be licensed by the state authorities of the Russian Federation.
Since 2009, the operation of casinos and gambling halls in the country is completely prohibited. The illegal opening of such establishments is strictly punishable by law. The only exceptions are sweepstakes, bookmakers and gambling organizers located in authorized gambling zones. Today in Russia there are four such zones operating and actively developing. It is in these territories that gambling is legal:
- “Yantarnaya” – Kaliningrad region;
- “Siberian Coin” – Altai Territory;
- “Primorye” – Primorsky Territory;
- “Azov-City” is the border of the Krasnodar Territory and the Rostov Region.
Four more zones are actively preparing to open. All operating gambling zones are constantly improving the range of services offered, paying special attention to gambling entertainment. The most popular among Russians are slot machines and slots. Online gambling is officially prohibited in Russia. The only exception are virtual entertainment presented in the form of interactive bets (simulators of slot machines, casinos and card games).
As for the incomes coming to the state treasury from gambling zones, things are different here. For example, Azov-City for 2015 replenished the budget of the Krasnodar Territory with tax deductions in the amount of RUB 229.6 million. And in 2016, this zone brought 236.5 million RUB to the local budget.
But the Primorsky gambling zone “Primorye” has not yet met the authorities’ expectations. If it was calculated that income from its activities would bring 165 million RUB to the budget, then in fact this amount was only 128.5 million RUB. At the same time, according to statistics, “Primorye” is visited daily by about 1,000 players, one third of which are tourists from China and Korea.
Legislation regulating the gambling industry in Russia
According to the current legislation of Russia, almost all types of gambling are allowed in gambling zones. Among them:
- games of chance – casino games, slot machines and lotteries;
- bets – bookmakers and sweepstakes.
The legislative framework governing relations in the gambling business in Russia contains legal acts adopted at the federal level and regional regulatory legal acts that operate on the territory of gambling zones. Federal regulations include:
- Civil Code;
- Tax Code;
- Customs Code;
- Federal Law “On state regulation of activities related to the organization and conduct of gambling and on amendments to certain legislative acts of the Russian Federation” dated December 29, 2006;
- Federal Law “On Lotteries” of 11.11.03;
- Federal Law “On licensing certain types of activities” dated 04.05.11;
- Federal Law “On Self-Regulatory Organizations” dated 01.12.07;
- Federal Law “On Counteracting Legalization (Laundering) of Criminally Obtained Incomes and Financing of Terrorism” dated 07.08.01;
- Government decree “On the organization of licensing of certain types of activities” dated 11.21.11;
- Government decree “On licensing activities for the organization and conduct of gambling in bookmakers and sweepstakes” dated 26.12.11;
- Technical regulations establishing the reception requirements for various types of equipment.
Regional regulations govern the admission of gambling organizers in permitted areas, and also deal with some infrastructural issues such as land lease for game organizers, regional supervision, etc.
According to the legislation, the minimum threshold for the return of bets on all slot machines must be 90%. And the payment of a large win is carried out only after confirming the player’s identity with a document.
There is a general ban on online gambling in the Russian Federation. At the same time, the legislation allows, as an exception, to make interactive bets in the form of player’s personal funds. These bets are transferred to the gambling organizer using electronic means of payment, which are specially created by the Center for Accounting for Transfers of Interactive Bets of Bookmakers or Sweepstakes.
The legal regulation of the gambling industry is conventionally divided into two groups of norms, which relate to:
- organization of gambling in bookmakers or sweepstakes;
- carrying out activities for the organization and conduct of gambling entertainment in the gambling zone (casino, slot machine hall, gambling establishment, etc.).
Any gambling establishment can be opened exclusively on the territory of the gambling zone. However, activities related to the organization and conduct of gambling in bookmakers, sweepstakes or their bet acceptance points can also be carried out outside the territory of the gambling zone.
Regulators of the gambling industry in Russia
The general regulation of gambling in Russia is carried out by the state. The Ministry of Finance is the government’s authorized body for developing gambling policies and regulations. The Federal Tax Service is responsible for overseeing and issuing betting licenses.
State supervision in the field of gambling entertainment is carried out by the authorized federal executive body (Federal State Supervision) and executive bodies of the constituent entities of the Russian Federation.
The issuance of permits for the organization and conduct of all types of gambling in the gambling zone is carried out by the governing body of this zone, in particular:
- in the gambling zone “Primorskaya” – by the Primorsky Regional Department of Tourism;
- “Yantarnaya” – by the Ministry of Economy of the Kaliningrad Region;
- “Siberian Coin” – by the Regional Department for Tourism, Resort Business, Interregional and International Relations of the Altai Territory;
- “Azov-City” – by the Property Department of the Krasnodar Territory.
The permission to hold the lottery is issued by the Government of the Russian Federation, and the organizers are:
- Ministry of Sports of the Russian Federation;
- Ministry of Finance of the Russian Federation.
The controlling body in the lottery is the Federal Tax Service. This service has the power to initiate administrative proceedings against inappropriate games and lottery organizers. Also, cases of administrative offenses can be initiated by the prosecutor’s office or the police. In cases where the organization of gambling or lotteries is a criminal offense, the Investigative Committee of the Russian Federation takes over the investigation.
Illegal presentation of gambling and lotteries on the Internet is blocked by the Russian Federal Service for Supervision of Information Technology and Mass Communications (Roskomnadzor). This is done according to the order of the competent supervisory authority or by court order.
Obtaining a license
There are the following types of licenses in Russia:
- for bets – activities related to organizing and running a tote (except for sweepstakes open within the gambling zone) can only be carried out in accordance with a license issued by the Federal Tax Service (FTS). This license covers both sweepstakes and sports betting;
- on gambling conducted in gambling zones – games and bets on the territory of gambling zones of the Russian Federation can be conducted only with the permission of a regional body that exercises control over operations within this zone. Only one permit is issued for one legal entity to carry out activities related to the organization and conduct of gambling in the gambling zone.
Only legal entities registered in the territory of the Russian Federation can act as organizers of the sweepstakes. The state or authorities do not have the right to act as founders and organizers of gambling. The exception is the joint-stock company created according to the decree of the President, which unites all the racetracks of Russia.
The following requirements are imposed on the organizer of the sweepstakes:
- he must be a member of a self-regulating organization of bet organizers;
- have an authorized capital of at least RUB 100 million;
- have a net asset value of at least RUB 1 billion throughout the period of the sweepstakes;
- insure your liability to players with a bank guarantee (at least RUB 500 million, validity period – at least five years);
- have all the equipment necessary to record bets, receive and process interactive bets and settle with prize providers;
- there should be no persons with financial crimes of average gravity and serious crimes among the organizer’s shareholders.
To obtain a license to organize gambling in bookmakers or sweepstakes outside gambling zones, you must submit an application to the Federal Tax Service and a number of documents:
- a document that contains information about all employees of the license applicant with an attached copy of their passports and work books;
- calculation of the plaintiff’s net asset value, carried out in accordance with the procedure established by the Ministry of Finance;
- local plans (for each address of a gambling establishment) with the obligatory indication of the service area, as well as the location of the processing center and the cashier of the bookmaker’s office or tote;
- copies of documents confirming the presence in the plaintiff’s staff of employees who ensure the personal safety of players, other visitors to the institution and employees during their stay in the premises of the gambling establishment. Or you must provide a copy of the contract for the provision of private security services;
- statements on the amount and origin of funds used to pay the authorized capital.
The issue of issuing a license is decided by the authorities within 45 working days from the date of submission of the application and all the necessary documents. The license is valid for an unlimited period. The state duty is 30 RUB.
To the organizer of gambling (casinos and gambling halls), which carry out their conduct within the gambling zones, in general, the same requirements are put forward as in the case of sweepstakes and bookmakers. However, the law provides for some specific features. For example, the net asset value in this case must be at least RUB 600 million.
Permission to provide gambling entertainment in gambling zones
A permit to carry out activities for the organization and conduct of gambling in a gambling zone is issued by the management body of this zone through an auction or competition. Such a permit is usually issued for an unlimited period, that is, by the time the corresponding gambling zone is liquidated. However, the decision can be canceled by the governing body in the following cases:
- liquidation of a legal entity that is an organizer of gambling;
- non-compliance of the institution with the requirements established by law;
- repeated violation by the organizer of the procedure for providing information or revealing the facts of its unreliability;
- violation by the organizer of the procedure for carrying out activities aimed at organizing and conducting gambling;
- the organizer has applied for cancellation himself;
- if the activity on the organization and conduct of gambling has not been carried out for 3 years from the date of obtaining permission.
Licensed varieties of gambling
Each gambling zone of the Russian Federation contains several casinos and halls with slot machines. Each of them offers players a huge range of gambling entertainment.
Almost all types of gambling are allowed in Russian casinos, including:
- American and European roulette;
- black Jack;
- slot machines;
- game terminals;
- sports betting, including horse racing;
- lotteries, etc.
The most popular among Russians are slot machines. Any Russian casino has at least 100 slot machines, and in some establishments there are more than 750 (for example, the Shambala casino in Azov City).
The gambling business tax is one of the regional types of tax. Revenues from it are an important source of budget revenues for the corresponding constituent entity of the Russian Federation. The main provisions regarding taxation of the gambling industry are enshrined in the Tax Code of the Russian Federation.
The tax rate is established by the laws of the constituent entities of the Russian Federation within the boundaries determined by the Tax Code:
- 1 gaming table – 25-125 thousand RUB;
- 1 slot machine – RUB 1.5-7.5 thousand;
- 1 tote processing center – 25-125 thousand RUB;
- 1 processing center of a bookmaker’s office – RUB 25-125 thousand;
- 1 point of acceptance of betting bets – 5-7 thousand RUB;
- 1 betting point of the bookmaker’s office – 5-7 thousand RUB.
The tax on gambling business, or rather the amount of payments that must be paid to the budget of the Russian Federation, is determined directly by the payer in accordance with the size of the bet. The total number of registered objects is also taken into account. The payer must provide the tax authority with a determination of the exact amount of deduction no later than the 20th day of each month.
After making sure that while the gambling industry is not generating as much income as planned, the authorities decided to slightly change the tactics of regulating the gambling industry. Already in January 2017, the Ministry of Finance submitted a draft amendment to the Tax Code and proposed to double tax rates for this business area.
Online gambling in Russia
Online gambling in Russia is prohibited by law. However, such forms of it that involve the implementation of interactive bets (for example, simulators of slot machines, casinos and card games, as well as online sweepstakes and bookmakers) are allowed.
The ban on the Internet versions of classic slot machines does not prevent Russian citizens from playing in various online casinos, poker rooms, etc. Of course, Roskomnadzor regularly blocks prohibited sites, but new ones immediately appear in their place. Currently there are 259 Russian sites with Russian and English interface. Bets are offered here in Russian rubles, euros or US dollars.
Popular slot machines in Russia
As in many other European countries, the products of Greentube, Igrosoft, NetEnt and others are popular in Russia. Top places in the ratings of many online casinos visited by Russians are occupied by the following slot machines:
- Book of Ra by Greentube
- Wild Witches from NetEnt;
- Steam Tower by NetEnt;
- Aztec Gold from Igrosoft;
- Secret Elixir by Greentube.
Russian developers of gambling software
There are several gambling software developers in Russia who are known in many countries. Among them:
- GloboTech is a company that has about 700 games in its range. All of them are aimed at Russian-speaking players. The graphics are not the best in them, but this is offset by an exciting storyline and frequent payouts. The most significant slots: Fruits of Ra, Lucky Pirates and SkyWay;
- Igrosoft – the company produces slot machines with an interesting theme, focused on the Russian mentality, as well as with frequent bonuses. The most popular developer slot is Crazy Monkey. Such slot machines are also popular: Rock Climber, Island 2, Fruit Cocktail and Garage.
Prospects for the development of gambling in Russia
The gambling industry in Russia is quite strictly regulated by law, and this gives rise to many representatives of this business sector to talk about its actual illegality. However, this is not quite true. Despite many bans and restrictions, gambling in the Russian Federation is actively developing. It is planned to open new gambling zones and new casinos in existing zones. Russian software developers are also actively developing.
However, judging by the latest gambling news, there are no plans to legalize casinos and gambling halls outside of gambling zones. Currently, there are several legislative initiatives to regulate the holding of lotteries, but they have not received much support from experts and entrepreneurs.