2021 Will Be A Watershed Year for Russian Bookmakers

2021 did not start well for Russia’s regulated sports betting industry with the realisation that despite Bill No. 1055657-7 being put forward for “review and consideration” the Kremlin’s decision was a foregone conclusion.

Their worst fears were realised when President Vladimir Putin spoke out in favour of stricter controls and deepening costs, and then the bill’s second and third readings were pushed through on the same day, disregarding the recommendation of a 30-day consultation made by the Ministry of Finance.

Facts Regressive New Legislation

The new bill highlights the inordinate amount of control exerted by the Russian government over every aspect of their country.

Here are five highlights from this concerning new law:

The two existing independent industry Self-Regulatory Associations (SROs) are disbanded.
A new government-run Unified Gambling Regulator will be installed.
All financial transactions will now be run from a single centralised payment hub.
A tax of 1.5% of all wagers placed will be levied automatically by the payment hub.
All bookmakers will now pay a quarterly fee of RUB 30 million (€440,000), regardless of turnover.

This action has already seen several smaller bookmakers begin to shut down their Russia-facing operations. With the reality of a €1.6 million annual fee plus a 1.5% tax on every bet hanging over their heads, it is simply not viable to continue doing business in the region.

Payments Sports Federations Lose Out

In addition to the very aggressive and potentially debilitating impact of Bill No. 1055657-7 on operators, some of the wording appears to be aimed at nullifying any benefit the sports federations had once gained from bookmakers.

Articles 2 section 3 of the amendments reads:

“9 1. Funds received by subjects of professional sports, namely, all-Russian sports federations, professional sports leagues, in the form of targeted deductions from gambling, are directed to finance activities for the development of children and youth sports. The procedure for the distribution of these funds is established by the federal executive body in the field of physical culture and sports.”

This would seem to indicate that agreements between betting operators and sports federations may not yield any financial gain for the federation. Rather all such income is to be managed by an unnamed government agency.

Once again, the legislation appears on the surface to be directing all funds, be they from operator taxes or federation agreements, to sports development programs, yet there is very little trust that the funds will reach these worthy programs.

Worldwide International Betting Clarification

One area which has been heartening for operators, especially considering the exorbitant new overheads, is the industry receiving the green light to legally offer bets on international sporting events.

Previously an update by the Kremlin noted that they were looking to place “limits on types of sports events that can be wagered on” this unclear message from a hostile regulator led many bookmakers to proactively stop offering odds on international events until further clarity was received.

The Ministry of Finance has subsequently confirmed that betting on international events is allowed as long as the body responsible for that sport keeps an up to date roster of all events on its official website.