December 2006 saw the adoption of a federal law that established the fundamentals for operating bookmaker’s offices and totalizators, and in July 2009, following three years of deliberations and consultations, the State Duma passed a law that provided for the creation of special gambling zones in Russia, namely in Altai and Primorsky krais, in Kaliningrad Oblast and one near the town of Sochi. Another gambling zone to be located in Crimea is currently at the design stage.
Brick-and-mortar entertainment facilities operate more or less well today in Russia; however, the actual tax revenues are still far lower than originally expected. For instance, according to data available on the official sites of the Krai Ministries of Finance, the Sibirskaya Moneta (Siberian Coin) casino paid to the treasury of Altai Krai just about 33 million roubles in 2018. The things look way better in Krasnodar Krai – over the same period, the treasury was replenished by 630 million roubles. However, one of the subjects of the gambling area, Azov-City, terminates its business as from January 1, 2019, so we cannot expect similar budget revenues this year.
And how is the online gambling doing? The question is a rhetorical one, so the answer is quite predictable: “Nothing doing”. The online casinos operating inside Russia are still part of shadow business. For example, Vulkan, a strong brand, started back in 1992, and ended up completely online in the noughties. Today, 27 years later, it is still an illegal entity.
The total casino ban, with the exception of the special zones, has been in effect since 2010; however, the online casinos manage to bring in millions in profits (without paying taxes, naturally). Online casinos with Russian domain names are subject to blocking, and the supervising authority, Roskomnadzor, has been increasingly active since November 2015 as it no longer needs a court decision to shut down illegal sites. The providers refusing to ban non-complying sites are liable to fines up to 100 thousand roubles.
Taking into consideration the fact that the federal service is quite inert, online casinos exist in Russia the way the Lernaean Hydra did: in place of a sliced off head of it two new ones grow back. When Roskomnadzor blocks an unwanted site, the casino instantly reacts with creating a mirror and reroutes the gamblers to another domain where its 100 percent copy is now perfectly operational. And it looks like this chasing game suits everybody, apart from the state treasury which falls short of potentially huge tax revenues.
It is prohibited to directly advertise gambling facilities in mass media and social networks. Try to place an ad in Vkontakte, for example, and you will see what happens. However, Russian (that is, illegal) online casinos are ranked in Google searches and can appear at the top of search results thus attracting new gamblers. Moreover, some casinos, e.g. the overhyped Azino777, are promoted using ads in illegally propagated copies of movies via torrent trackers. The Russian online casinos remind one of those little grass blades, stubbornly making their way to the sun through a thick layer of concrete.
Some foreign licensed online casinos accept Russian gamblers, although they are not supposed to since they violate local (i.e. Russian) legislation by doing so. Nevertheless, the gamblers feel very comfortable there and withdraw their winnings easily enough (although, admittedly, not through all payment systems available in Russia).
As of 2020, Russia’s legislative framework has seen two changes, which had a minor effect on betting offices but did not address online casinos. The Government Decree No. 1216 of 14 August 2020 “On additional requirements to gambling organizers” imposed a series of restrictions on companies that accept interactive bets, namely:
- A bookmaker must not use more than one domain name for every type of service offered.
- All bets and withdrawals must be credited to a bank account registered in the so-called “Interactive Betting Acceptance Accounting Center”.
- Information on players’ deposits and withdrawals must be stored on Russian territory.
Besides that, requirements to betting sites’ content also became stricter. For example, users now must have access to the text of the law that regulates gambling activities.
Moreover, on 30 December 2020, the President signed a law called “On a public not-for-profit organization «Unified Gambling Regulator» and on changes to certain legislative acts of Russian Federation”. According to the law, the new state-owned company will collect a 1% fee on betting revenue and these funds will be spent on sports governing bodies’ development.
