Russian parliament greenlights unified gambling regulator
State Duma passes bill in first reading with greater funding for sports among areas targeted
The Russian State Duma has approved the first stage of a bill which provides for the creation of a new gambling regulator.
A first reading of bill 1055657-7 was approved by MPs late on 8 December and provides for the creation of a “unified gambling regulator” with broad sweeping licensing, supervisory, enforcement and taxation powers.
A key objective of the regulator is providing long-term financing for the development of sports and so-called “physical culture” activities which promote health among Russian citizens.
The regulator will operate under the supervision of the Russian Ministry of Finance, with the bill requiring the entity to be based in the Russian capital of Moscow.
Funding for the regulator will be made up of so-called “voluntary property contributions” from public entities and income received through its activities, which includes regulatory sanctions.
Funding from operators will be collected and distributed to the regulator via a compensation fund.
Sports betting firms are required to contribute at least RUB30m (£303,000) to the fund, up to a maximum of RUB300m (£3m). Operators offering Totalizator (Tote) betting are required to contribute at least RUB10m (£101,000) to the fund, up to a maximum of RUB100m (£1m).
The regulator will be overseen by a supervisory board, made up of a chairman and four additional members from various government departments, including Russia’s ministry of sports, finance and the economy. Each board member will serve a maximum term of three years.
Reacting to passage of the bill, 4H Agency partner Ilya Machavariani said: “This draft law is twofold in nature ,on the one hand it certainly supports the recent trend in Russian gambling aimed at strengthening the regulations in a quest to increase government revenues from sports betting/tote betting industry.
“On the face of it this particular draft law seems to employ a more Westernised approach to the regulation of Russian gambling and creation of a dedicated regulatory body certainly supports this conclusion.
“However, on the other hand, the draft law is drafted very poorly and requires almost complete rework in order for it to be workable,” he added.
In July, the State Duma successfully passed a bill requiring licensed sports betting operators to pay a 5% tax on their gross gambling revenue (GGR) on a quarterly basis to Russian sports federations.
The bill, which passed through a second and third reading in the Duma, requires all licensed operators that process bets on non-Russian sports events to pay the contribution. This 5% quarterly tax previously only applied to operators offering betting on Russia-based sports events.