United Russia Proposed the 'United Regulator' for Gambling
Russian sports betting companies may soon be under the watchful eye of a new gambling regulator whose main responsibility seems to be ensuring that contentious new taxes are raised.
Last Friday, two ruling party delegates of United Russia sent to the Duma new draft legislation aimed at amending gambling laws to establish a 'Unified Gambling Regulator' under the supervision of the Ministry of Finance. On Monday, Bill № 1055657-7 was forwarded for further consideration to the Committee on Economic Policy, Industry, Innovative Development and Entrepreneurship.
The new regulator will be tasked with getting even harder with illegal gambling operators, particularly internationally licensed sites that sell products currently banned in Russia, including online casino and poker games. But it will also be the regulator's duty to ensure Russian-licensed bookmakers pay expanded contributions to local sports bodies.
In October, Russian President Vladimir Putin voiced support for a plan to "at least twice" boost bookmakers' sports funding from its current 5% income, each bookie being responsible for a minimum payment of RUB30m (US$394k) per year. In order to achieve this outcome, the Ministry of Finance has implemented regulations but the 1055657-7 bill introduces a tax rate of 1% of betting revenue, each bookie being responsible for a minimum payment of RUB5m per sports league.
1055657-7 aims to abolish the existing structure of online payment processing hubs, in which Russia's two competing bookmaker associations (SROs) each run their own hubs, known as TSUPIS, in order to ensure compliance with the new tax
Instead, the bill allows for a centralized payment system which can track all betting activities and exclude the proposed sports betting tax (in real time). Crucially, the tax won t would only be deducted from wagers on Russian sports but also from wagers on international affairs.
Reaction to the draft bill was immediate, with Nikolai Oganezov, President of the Russian Bookmakers' First SRO, releasing a statement stating that the government seemed to be less concerned with financing sports than with “the destruction of a well-functioning and only positively proven mechanism”.
Oganezov said the TSUPIS systems' operations were "transparent" and led to "no concerns" during their nearly four-year service. Oganezov suggested that the sponsors of the bill may not have appropriate expertise and understanding in the sports or bookmaking sectors and indicated that the bill was meant to contribute to the extinction of the SROs.
The President of First SRO member Liga Stavok, Yuri Krasovsky, said the added sports duties would leave bookmakers with no option but to either split or substantially reduce the volume of their local sports sponsorship contract. Krasovsky also noticed, with some skepticism, that the Ministry of Finance was preparing to steer the increased sport contributions to the federal budget rather than directly to local sports organizations.
Dmitry Sergeev, CEO of Parimatch Russia, said the increased tax would fail to achieve the specified goals of the government because smaller bookmakers would presumably cease to function, thereby reducing the revenue-raising ability of the country. Bettors and regional sports leagues will also lose if bookmakers chose not to deliver secondary sports markets instead of pre-empting RUB5m per quarter if revenue does not meet a certain level.
