Overview
Russia Online Gaming Overview
Partially Regulated Market
Federal Law No. 244-FZ “On State Regulation of the Organisation and Conduct of Gambling and on Amending Certain Legislative Acts of the Russian Federation” (“Gambling Act”) governs the organisation and conduct of Gambling in Russia and covers the following gambling activities:
- Land-based casino
- Land based betting
Lotteries are regulated by Federal Law No. 138-FZ “On Lotteries” (“Law on Lotteries”) and are subject to state monopoly.
The gambling picture in Russia remains dismal. The main reason for this is suspicious and negative perceptions of gambling and thus anti-gambling government policy. Current changes in legislation do not indicate any tendency towards market liberalisation.
The regulatory framework covers only land-based casino and land-based betting. Any type of online gambling in Russia is prohibited. The only exception is made in respect of land-based betting operators duly licensed in Russia, allowing them to obtain authorisation to undertake interactive bets online for bookmaking and totalisators.
The federal law passed on December 29, 2006, prohibits gambling venues with slot machines and table games everywhere in Russia except for five special gambling zones, which are all remote from the capital and in well-established tourist destinations. This restriction was to take effect as of July 1, 2009, whereby gambling was banned almost everywhere in Russia. The only exceptions are five specially arranged zones in the Altai, Crimea, Krasnodar, Kaliningrad, and Primorsky regions.
Managing a company that operates outside of the specialised gambling zones would lead to criminal charges and/or to administrative liability under the Administrative Offence Code.
The law also prohibits all Russian gambling companies from operating on the Internet.
Besides that, the advertising of online casinos on the internet will lead to liability for web-site owners.
Despite attempts to introduce penalties for players, there is no prohibition for internet users to play online casinos under Russian law, but no protection as well. Legislation does not ensure financial security for players nor consider return of funds lost due to the blocking of websites.
While formerly blocking of websites was possible only by court order and in accordance with legally prescribed procedures, The Federal Service for Supervision of Communications, Information Technology and Mass Media may now block websites at its own discretion and without any prior notification.
Domestic operators are prohibited from offering online gambling services from within Russian territories and internet service providers are required to block gambling sites operated from overseas. If a provider does not prevent access to unlicensed gambling it can be held liable both criminally and administratively. Further, not only are illegal online casino and betting websites blocked, websites containing gambling information are also blocked.
Official sources report thousands of domains have been blocked over the past years. Several European websites which were operated officially in the Russian jurisdiction were amongst those affected.
It is also common to see Russian sports betting sites being blocked even though their activities are licensed and where in fact they operate in compliance with the law.
Sports betting remains a complicated situation. Although betting is legal in Russia, there are significant financial and organisational barriers, and the requirements for obtaining a licence to operate in Russia are very stringent.
Current legislative changes on gambling in Russia mainly concern the strengthening of anti-gambling policy, an increase of penalties for operating outside of gambling zones and on the internet, an increase in taxation, and the creation of the Unified Gambling Regulator along with the establishment of a single payment hub.
To summarise, even though the Russian gambling market seems very attractive due to its large population and high interest in gambling amongst Russian players, conditions for gambling business in Russia are likely to be defined as unfavourable.
Market Size
As regards to 2022, according to the results of January – September, the volume of deposits of betting companies has already amounted to RUB 640B. As a result, the GGR is expected to be around RUB 230–260M.
Competitive Landscape
There is an official list of betting licensees accepting bets online.
Localisation
Nothing specific to gambling products.
Top Key Attractions and Challenges
Attractions
- Online betting, even if tied to land based
- IT professionals are relatively low cost and highly expert in Russia, with many operators having Russia based IT/R&D centres without a requirement for any form of B2B licence
Challenges
- Requirements for obtaining a licence to operate in Russia are very stringent.
- The law also prohibits all Russian gambling companies from operating on the Internet, except online betting
- Current changes in legislation do not indicate any tendency towards market liberalisation.
- As a result of its invasion of Ukraine, Russia has become isolated within its own gambling sphere
Products
Licensing & Regulation
Russia Online Gaming Licensing & Regulation
Licence Triggers
Russian entities aiming to provide gambling services in Russia are required to obtain a relevant licence or permit depending on services they aim to provide.
Online gambling is prohibited on the territory of Russian Federation except for the cases of accepting interactive bets and paying winnings on them by the organisers of gambling in betting shops, offices...
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Products
Enforcement
Russia Online Gaming Enforcement
Regulating Bodies
There is no specially designated regulatory body overseeing the conduct and supervision of gambling. The Ministry of Finance is the competent authority responsible for the development of state policy and regulation of gambling. Broad supervisory responsibilities are vested on the Federal Tax Service which also carries the function of licensing body. Government bodies of the constituent entities...
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Products
Marketing
Russia Online Gaming Marketing
Marketing is allowed but highly regulated and restricted. As general rule, only advertising of permitted gambling is allowed.
Offline
Advertising of gambling is mainly prohibited in public places and restricted in media.
Gambling advertisements are only allowed:
On radio or television from 10pm to 7am local time, except for the advertising of betting which is allowed during live broadcasts...Unlock Your Free Trial
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Products
Fees
Russia Online Gaming Fees
Application Fees
Application fees per se are low in contrast to application fees in many other jurisdictions and there are no annual licence fees.
The fee payable to obtain a betting licence is RUB 30,000, which is granted for indefinite period.
Ongoing Fees
No fees are due as part of the application process for a casino permit, and no...
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Taxes
Russia Online Gaming Taxes
The taxation of gambling is governed by the Tax Code of Russian Federation, whereas tax rates are established by the laws of the constituent entities of the Russian Federation.
Licence Taxes
See relevant product description – in particular betting.
Sales Taxes
The betting contribution is set up in the Gambling Act. Winnings are subject to income tax of...
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Future Outlook
Russia Online Gaming Future Outlook
Unfortunately, no online gambling liberalisation is expected in the near future.
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Products
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Legal Expert
WH Partners
WH Partners is a Malta-based leading law firm with a business focus and expertise in gaming & gambling, fintech, technology, tax, M&A and corporate finance. The firm also advises clients on intellectual property, data protection, capital markets, commercial contracts, real estate, employment law, trusts and foundations and citizenship, residence & immigration. Both the firms and the lawyers are highly ranked by the foremost legal directories, including Chambers & Partners, The Legal 500, IFLR 1000, and The World Tax. WH Partners is the exclusive member for Malta of Ally Law. More information is available at www.whpartners.eu.
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