Gambling business in Russia: gambling zones and related legal nuances in 2018

The current situation with the Russian gambling business remains uncertain. In 2018, one of the most lucrative gambling zones of the Russian Federation Azov-City appeared close to liquidation.

Such a decision can be explained by the establishment of a new entertainment resort zone in the Sochi-located Krasnaya Polyana: the current Russian law stipulates that two gambling zones cannot work simultaneously within one territorial entity of the Russian Federation. Investors hope that the situation with Azov-City will change, but everything remains unclear. The liquidation is scheduled for December 31, 2018.

Follow the article to see the big picture of other gambling zones and gambling business in Russia.

Current situation with Russian gambling as of 2018

Same as before, offline casinos can be set up within the special gambling zones: Primorye, Yantarnaya, Azov-City, Siberian Coin, and Krasnaya Polyana.

Gambling taxes are imposed as tax on imputed income. That means that if there are 10 poker tables in a casino, its owners will have to pay for each regardless of earnings. Gambling machines also fall within these conditions.

However, the situation with online apps for gambling differs. The Russian law bans e-casinos. Even placing servers within special gambling zones, you may face the following problem: currently, there is not any official protocol in Russia allowing to establish online casinos.

Besides, the law of the Russian Federation not only goes against online gambling but also calls to ban websites containing casino options and their mirrors.

Legal fight with Google

In 2018, the Russian Federal Service for Supervision of Communications, Information Technology and Mass Media (Roscomnadzor) intensified its actions in terms of blocking websites containing banned information. It includes online casinos and unlicensed betting resources.

The Russian executive body filed an administrative lawsuit against Google for its refusal to register banned websites, including online casino resources.

The Russian law provides that the blacklisted resources of Roscomnadzor should not only be banned by Internet providers but also taken out of search results. This is supposed to prevent users from entering such websites via anonymizers and VPN.

How does gambling business affect economy?

Accompanied by appropriate preparation and legal framework, gambling zones may make contribution to the country’s economy. Las Vegas and Macau are bright examples.

Establishment of gambling zones is of particular importance in under-populated and poor areas. Nevada used to be one of the least developed states in the U.S. until the establishment of a gambling zone in Las Vegas. The casino and related infrastructure made it one of the most thriving places in America.

Apart from budget replenishment by taxes, gambling zones also help create workplaces. This year’s attendance of the Macau-located gambling zone is 35 m people, which appears 7.4% higher than in 2017. Its popularity is growing. Due to this, several new casinos are to be set up in 2019-2022 thus creating new jobs.

What profit did Russia make out gambling zones taxation in 2018?

As shown in the statistics of the regional websites (Krasnodar Krai, Kaliningrad Oblast, Altai Krai, and Primorsky Krai), the first one mentioned turn out to be the undisputed leader.

Here is the amount of gambling taxes paid within Q1 2018:

• Krasnodar Krai – 129 mRUB;
• Kaliningrad Oblast – 23 mRUB;
• Altai Krai – 11 mRUB;
• Primorsky Krai – 30 mRUB.

Compared to Q1 2017, the year’s income from taxes in Krasnodar Krai is estimated at 38%. Azov-City and Krasnaya Polyana generated the biggest revenue, and 78 m is due to Azov.

So, legalization and appropriate regulation of gambling zones will both create new jobs and attract more income to the country’s treasury.