Law on the Establishment of a Unified Gambling Regulator in Russia Adopted: Key Provisions

The regulatory body for bookmaking activities will change in Russia. Instead of the self-regulatory organizations, Unified Gambling Regulator will control the betting sphere.

On December 23, 2020, the State Duma deputies adopted a bill in the second and third readings, intending to create a corresponding state institution in the country. On December 25, it was approved by the Federation Council. Already on December 30, the document was signed by President Vladimir Putin and later published. The law came into force on December 30, with the exception of some provisions, which will take effect in 270 days after the publication of the document (on September 27, 2021).

► Details of the law on the creation of the Unified Gambling Regulator

The Law № 493-ФЗ establishes the procedure for creating a public company that will regulate the activities of tote and betting operators, as well as designates its goals and functions. The document also presupposes the introduction of adjustments to certain legislative acts that relate to the work of the betting market participants.

The responsibility for creating the gambling regulator stays with the Federal Agency for State Property Management. It will carry out its activities on the basis of the charter, which is approved by the Russian government. The body will be managed by the supervisory board, representatives of the board and the general director. It will be located in Moscow.

The unified gambling regulator will monitor all financial transactions (bets/interactive bets and payments) that will be carried out in betting and tote shops. It will also provide extra-budgetary funding for the sports sector by channeling targeted deductions to specialized leagues and federations.

According to the law, among other things, the regulatory company will be able to perform the following functions:

• cooperate with the executive authority in charge of control and supervision in the field of taxes and fees – the Federal Tax Service of the Russian Federation;
• transfer contributions received from companies organizing gambling activities to professional sports leagues and all-Russian sports federations;
• prepare proposals for amendments to the legislation concerning regulation of gambling activities the Russian Federation and develop draft regulatory documents in this area;
• implement the functions of a customer of hardware and software systems with software designed to accomplish two tasks: ensuring control over the work of bookmakers and stopping the activities of operators that illegally conduct online gambling and lottery activities. To implement the first task, an information system will be created, and for the second – a monitoring system;
• cooperate with various structures on the international level to exchange experience on issues related to control over the work of representatives of the gambling industry.

The document intends to create a single center for accounting of bet transferring at betting shops and totes, which will operate in the form of a credit institution. It will withhold targeted deductions from absolutely all interactive bets that are made at betting points.

Operations of the betting market players will be controlled by an information system, subject to join by bookmakers and totes. And in order to identify operators that violate the law when conducting online gambling activities, a monitoring system will be created.

The gambling regulator will also have to establish a compensation fund. It will be replenished by contributions from companies on the betting market. The minimum fund size for betting operators would be 300 million rubles, and for totes – 100 million rubles.

The law stipulates the same norms that are currently provided by the SRO compensation rules.

► Expert opinions on changes in the gambling industry

Igor Stolyarov, Deputy General Director at Liga Stavok betting company believes that the adoption of the law on the creation of a unified state regulator will have a negative impact on the betting industry. The new reform will entail cuts in budgets in such areas as marketing and advertising. Expert believes that termination of financing of media channels by bookmakers may lead to the fact that certain websites will no longer receive sufficient profit and will be forced to cease their activities.

CEO of Parimatch CIS Dmitriy Sergeev, talking about the consequences of the adoption of the law, noted that changes will primarily negatively affect the betting companies with small revenue. He predicts that amendments to legislation may lead to the reduction of the number of active betting operators in Russia to 10-12 companies.

Lawyer Ilya Machavariani pointed out that with the adoption of the law, the market will enter a new reality. At the same time, he stressed that in the future, the system for regulating the activities of betting and tote will be changed.