in

Beyond the Iron Curtain: Regulatory Issues with Online Casinos

The Union of Soviet Socialist Republics (USSR) represented Communist Russia’s growing influence in Eastern Europe. It was a bulwark against Western expansionism and NATO, and it proved to be an effective buffer politically, socially, and militarily. Unfortunately, the repressive Russian regime prevented member countries from adopting liberal ideas, lifestyles, and enjoying basic freedoms.

The collapse of the Soviet Union was brought about by many factors, notably the desire of the people for change. Mikhail Gorbachev and Ronald Reagan were instrumental in tearing down the Berlin wall that separated East Berlin from West Berlin. That was the catalyst which accelerated individual countries’ march towards freedom and independence.

It comes as no surprise that Russia continues to rule over its domain with an iron fist. The authoritarian-style leadership of President Vladimir Putin is not conducive to free-thinking, free movement, or free-market economics. While Russians enjoy far greater freedoms today than ever before, the country still slumbers in extreme poverty, backward isolation, and limited economic opportunity.

Many examples of Russian interference in everyday matters abound. Consider the recent decision by Russian regulators to limit Google’s listing of online gambling sites in Russia. It was recently reported in the Russian media that Google has begun the process of removing foreign online gambling sites from search results in Russia. This is par for the course with a government that seeks to enforce totalitarian style control over its domain.

In 2018 alone, the Russian government reportedly blocked some 130,000 online gambling domains. This figure is twice as high as the number of gambling domains blocked in any other year. In 2019, analysts anticipate that Russia will block even more online gambling domains. In 2017, just 63,000 gambling domains were blocked by the watchdog authority, Roskomnadzor. In the first two weeks of 2019, 5,000+ online gambling domains were blocked, and the Russians are moving to ban much more online content it deems illegal, offensive, or unwanted.

Google was put on notice; the tech giant had until February this year to comply with FGIS regulations. Failure to comply will result in Google being blacklisted in Russia. Such is the overarching control that Russia exerts on online gambling activity that it successfully banned a Curaçao-licensed company and all of its sites. Among others, Russia is barreling ahead to ban payment processing companies from transferring money to online gambling sites abroad.

What Is the Official Position of the Russian Government on Gambling Activity?

Gambling in Russia is legal, but it is only legal in 4 regulated areas. These include Primorsky Krai, Kaliningrad Oblast, Krasnodar Krai, and Altai Krai. Sports betting and state lotteries are legal, although there are only a limited number of operational companies in Russia. The shuttering of gambling in Russia affected an estimated 300,000 jobs, although Moscow claims just 11,500 jobs were sacrificed. As for online casino gaming, Russia has adopted an unequivocal position since April 2017: online gambling is illegal.

Russian online casino players have been seeking to circumvent this regulation by accessing foreign-based online casinos. Unfortunately, the government has targeted Internet service providers in Russia and forced them to comply with banning all foreign-based online casinos. Russia’s opposition to gambling goes back to the days of the Russian Revolution when all forms of gambling were outlawed in all Russian territories and jurisdictions.

Yet, despite stringent regulations, there are 20 casinos and 4 horse tracks in Russia. Most of these are found in Vladivostok, Azov City, Amberland, and Sochi. In 2009, Russia shut down multiple casinos and gaming halls across the country, leaving people jobless in the process. Russia has poor relations with Georgia, and various Georgian criminal gambling syndicates were running most of the Russian gaming halls. Unfortunately, the four designated areas for gambling in Russia are desperately in need of $40 billion + in investment.

The more important question is how former Russian territories and countries have reacted to online gambling, sports betting, traditional casino games and related activity.

What is Happening with The Eastern European Gambling Industry?

  • Two countries which have different opinions about gambling are Russia and Ukraine. Gambling remains illegal in the Ukraine, but there have been promises to lift the ban. Nothing has happened yet though. One leading Ukrainian tax professional, Mikhail Sololov believes that the Ukrainian government could generate substantial tax revenues from gambling activity. For now, the ban remains in place. Ukraine’s ban extends to online gambling too, and details of the gambling ban were published in a Ukrainian newspaper, Holos Ukrainy in 2009. Several gambling activities are exempt, including pickup reward machines, billiards, lotteries, and art contests.
  • In Romania, digital gambling is regulated by the National Gambling Office. This includes casino games such as blackjack, roulette and slots. Other games like poker and bingo also fall under the jurisdiction of the National Gambling Office. According to Government Emergency Ordinance #77/2009, games of chance are regulated in Romania. The restrictions on class 1 gambling licenses state that only companies within the European Economic Area, the European Union, or the Swiss Confederation can apply.
  • Bulgaria regulates casino gaming, poker gaming, and bingo gaming under the auspices of the State Commission on Gambling Bulgaria. Betting, lotteries, and social games are also regulated by the same authority. This is true for land-based gaming and digital gaming. Companies wanting to apply for a gambling license in Bulgaria are required to have funds of €10 million or the BGN equivalent. Plus, these companies must be able to create at least 500 jobs.
  • Slovakia regulates digital gaming and land-based gaming via multiple government offices. These include the Ministry of Finance of the Slovak Republic, the Financial Directorate of the Slovak Republic, customs offices, and tax offices. The online games that are fully regulated in Slovakia include blackjack, roulette, video slots, classic slots, poker and bingo. Other betting games include sports betting, lotteries, and social games.
  • In Poland, the Minister of Finance is tasked with regulating digital gaming and land-based gaming. The gaming category encompasses slots, card games, table games, poker and bingo. Betting activity includes fantasy betting, sports betting, horse race betting, and general sports betting. The Minister of Finance is also tasked with regulating lotteries and social gaming. In Poland, there are 3 types of licenses applicable to different gambling products for Polish residents. These include a casino permit, a betting product license, and a notification for the commencement of a licensable activity. In Poland, it is perfectly legal to gamble at a land-based casino. The casino license is valid for 6 years, but the industry has high taxes and lots of bureaucracy. In Poland, there is a tax of 12% on gross gambling revenue for sports betting operations.
  • In Turkmenistan, there is limited gambling activity, most of which takes place in the city of Ashgabat. This Muslim nation strictly polices gambling activity, and this has given rise to a large gambling black market. Horse racing gambling activity takes place at the Hippodrome in Ashgabat. The casinos are located in Ashgabat – Grand Casino with a dozen table games and 150+ gaming machines, and Ak-Altin Casino with 6 table games and 15 gaming machines.
  • In Uzbekistan, all forms of gambling activity are outlawed. This began in 2002 with the banning of billiards. The government of the country has adopted a no-nonsense approach to banning gambling activity. Online gambling is illegal, despite its popularity among millennials. Interactive clubs also serve as hubs for online gambling activity, although these are still deemed illegal by the government.
  • In Moldova, the government took a liberal approach to gambling and legalized all forms of gambling in April 2017. The Ministry of Economics and Reforms decreed in 1998 that legal gambling would take place in the country. Throughout Moldova, online gambling is also legal, and there are scores of interactive clubs for players to congregate and enjoy online casino games.
  • Eastern European countries, Latvia, Lithuania, and Estonia have adopted a liberal approach to gambling. For example, licensing in Latvia is now mandated. However high license costs are a barrier to entry and licenses must be renewed annually. In Estonia, casinos and gambling establishments are required to have 2 licenses but they are valid for an unlimited period. Fortunately, there are low taxes and a low license fees. The online gambling license is valid for 20 years and is available through the Estonian Tax & Customs board. The remote gaming tax is 5% in the country. In Lithuania, all forms of gambling activity are permitted, provided they are licensed. The tax base rate is 5% in Lithuania for lottery games and 15% for bingo and sports betting.

What do you think?

3350 points

Comments

Leave a Reply

Loading…

0

Slavic Semolina Desserts

How Truel Slavs Are Born