-
Casinos for you
Uzbekistan President Signs Decree for Regulated Gambling Debut in 2025
By Jeff Osienya Apr 30, 2024 LegalityFor the first time in nearly two decades, Uzbekistanis will be allowed to gamble legally in their country starting January 1st, 2025. The nation’s president has signed a decree to regulate different forms of gambling, from casino gaming to sports betting.It’s time for gambling fans in Uzbekistan to get excited as President Shavkat Mirziyoyev rubberstamped a decree legalizing wagering activity within its borders. This ordinance is set to take effect from January 1st, 2025, ending a 17-year prohibition rule that had prevented all forms of gambling across the country.
What Does the Gambling Decree Say?
The decree postulates that the nation’s National Agency of Perspective Projects (NAPP) shall regulate and license lotteries, online games, and bookmarking. Licensing procedures of various operators also fall within the purview of the NAPP.
So, thanks to the newly signed ordinance, Uzbekistanis and foreigners within the country’s boundaries can participate in lotteries, online wagering, and bookmarking wagers. The only restriction pegged on this requirement is that these gamblers must do so via approved and licensed operators.
As for taxation, the decree puts across the implementation of a special 5-year regime. From the start of the new year 2025, legal entities that conduct online wagering, lotteries, and bookmarking activities will be subject to a 4% turnover tax. This tax will be levied on the total income generated from their activities minus all the winnings paid to winners and returned wagers.
NAPP had conducted an external study of foreign practices mainly related to determining a taxation approach for operators. This research revealed inherent difficulties in determining profit values and potential risks of abuse in the calculation, mainly due to activity-specific nuances. Furthermore, there were glaring disparities in the tax metrics for the different types of gambling games in these foreign countries.
As such, Uzbekistan rendered the application of uniform VAT and income tax ineffective and didn’t adopt it. With the 4% tax rate, professionals in the gambling industry project an approximate annual return of $6 million. The five years of this taxation rate will be characterized by the observation of dynamics by the regulator. Upon completion of this period, the tax policy for the regulated gambling industry will be reviewed.
To incentivize gambling participation through legal avenues, the Uzbekistani authorities have indicated that tax exemptions will be applied to winnings obtained from lotteries, sports wagering, and online games. Of course, the exemption will only apply to payouts collected from gambling operators licensed by the NAPP.
As in most gambling-legal jurisdictions, the presidential decree has also imposed an age limit of 18 years and above. This applies to both citizens and foreigners in a move geared to combat gambling addiction among the population and protect Uzbekitani nationals’ interests.
NAAP has also been mandated to collaborate with other concerned ministries to establish policies related to extra participation restrictions on wagering, online gaming, and lotteries. The establishment of these additional restrictions is geared towards looking out for socially vulnerable societal groups like civil servants and people with an inclination to excessive gambling behavior.
The decree additionally accords NAPP and the Department for Combating Economic Crimes under the General Prosecutor’s Office the mandate to monitor and enforce compliance. So, the duo will enforce legislation relating to the prevention of money laundering and terrorism financing alongside the mushrooming of weapons of mass destruction by organizers of online games, lotteries, and bookmarking games.
NAPP Welcomes the New Presidential Decree for Legal Gambling
Following the presidential assent for the gambling legalization ordinance, the NAPP released an official statement praising the move. The agency pointed out that the blanket ban on gambling activity and the lack of proper regulation structures pushed Uzbekistani citizens to illegal offshore platforms. Additionally, NAPP noted that the introduction of digital technologies and electronic payments across Uzbekistan were considerable contributors to increased offshore online gambling, an activity that poses grave risk for players.
The Central Asian country has had a ban on gambling activities since September 1st, 2007. That said, according to NAAP, the ban has been largely ineffective, especially with a large portion of the Uzbekistani population utilizing foreign entities to continue wagering. Thus, this exposed the nation’s citizens to exploitation from the foreign platforms, and many of them have lost large sums of money to fraudulent sites.
NAPP was also mindful of the fact that the funds so far spent by their citizens on foreign sites are in the range of between $350 million and a whopping $1 billion. These shattering figures spurred the fuel that re-ignited the flames of regulated wagering in the country. The apparent lack of mechanisms that hindered the country’s citizens from using foreign operators to gamble online was also worrying.
In its statement, NAPP also pointed out that the decree had been established via what it termed as:
Quote“...thorough study of advanced foreign experience for the introduction of modern technologies in the field of regulation of activities related to the organization of online betting and lotteries.”
The foreign countries that the NAPP statement alluded to included Singapore, Hungary, South Korea, and Georgia, among many others. Further, the agency opined that the presidential decree would introduce advanced foreign expertise to Uzbekistan to significantly help modernize gambling regulation. It would also increase the investment appeal of the Central Asian country, enhance its tourism prospects, and attract additional funding from locals and non-locals.
You might also like