New Russian Gambling Regulator Set to be Established by Law

Written By Nathalie Moran on November 23, 2020
Russia Gambling Law

A new regulatory body for gambling is set to be put in place soon, with a bill from the country’s governing party having been introduced to the legislature.

Two representatives from the governing Russia United party, Viktor Deryabkin and Igor Stankevich, have introduced Bill No. 1055657-7, the first reading of which should take place in the State Suma before the end of 2020.

The Committee on Economic Policy, Industry, Innovative Development, and Entrepreneurship approved the new law on November 17. The new gaming industry regulator would be tasked with improving the level of supervision and control of the gambling industry in Russia.

Tax Changes ahead

It would also look to increase the tax proceeds from gambling which are set to be directed to the Ministry of Culture and Sport. Another key aspect of the new regulator’s work would be to cooperate with other regulators wherever necessary, as well as to shape new Russian gambling legislation and propose changes to the industry where needed. Other important roles include monitoring the industry and detecting any illegal operators.

The new bill also proposes an increase of 1% in the tax on betting turnover. This would mean that each sportsbook operator would be liable to a minimum payment of RUB 5 million ($65,650) per sports league.

It is also proposed that the current system of two online payment hubs used by Russian bookmaker associations would be scrapped. This would help to ensure compliance with the new tax.

The two-payment hub system is to be replaced by a new single payment hub which would ensure that all betting transactions are subject to real-time monitoring and have tax deducted from them. The new tax would also be applied to all wagers made in Russia on international sports.

The Ministry of Finance will control the new regulatory body, which will be managed by a supervisory board consisting of five people. There will be a chairperson and four members, each selected by the state government, and appointed with a three-year mandate.

The regulator will be led by a general director who is also set to be appointed by the government for a period of five years.

Reactions not without criticism

The proposed new legislation has not been free from criticism from many in the industry, however. Licensed sports betting operators have reacted by asserting that the new law would only serve to disrupt a previously well-functioning system.

They claim that it would not produce the desired boost for funding for sport and that as a direct result of it, sports betting companies would significantly reduce the number of sponsorships that they agree with various sports clubs and events.

Sports association officials have also raised concerns that the two representatives proposing the new law have no relevant industry experience. They have also expressed the view that the proposed new law is being put in place as a way of boosting federal funds rather than helping sports.

The Legal Department of the Office of the State Duma will analyze the bill before its first reading. This analysis is expected to be submitted by December 1.

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Nathalie Moran

Malta-based journalist and content editor, with a master’s degree in International Media Cultural Work and an interest for online games. A fan of the old school internet aesthetic and pixel image designs, her favorite games include The Legend of Zelda, Super Mario 3, and more recently Fall Guys.

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