Gambling in Russia

Gambling subjects of Russia:
(Kaliningrad Oblast better known as "Yantarnaya"),
(Krasnodar Krai, moved from "Azov City", but stayed within the administrative zone Krasnodar Krai, and was renamed to "Sochi"),
(Altai Krai known as "Siberian Coin),
(Primorsky Krai "Primorye"),
(Crimea Includes the Crimean region, "Gold Coast" section - planned, approved in 2019 but currently on hold since 2020)

Gambling in Russia is legal in four regional subject areas, and in 2009 was made illegal in all other areas of Russia.

History

In Soviet Union

At the end of 1927, the People’s Commissar of the Interior presented a report devoted to gambling and the gaming business existing at that time to the RSFSR SPC. The main idea voiced through the report was that its incompatibility of an idle, bourgeois pastime with the true spirit of the working proletariat. And, regardless of the rather modest figures in the gaming sector (for example, only 4 small gaming houses operated in Leningrad at that time), the key prohibitive provisions in the report were approved.

All this led to a ban on the opening of gambling houses in worker districts, it was followed by a ban on gambling in the entire districts, and later, on May 8, 1928, by the resolution of the USSR SPC, all Soviet Republics were instructed, the reasons not being explained, "to take measures on the immediate closure of any facilities for card games, roulette, lotto and other kinds of gambling". The closure of gaming houses and the gambling ban were pushed by the penal policy course shaped by the Soviet state, providing for overall reinforcement of criminal sanctions in the country and the modification of the state's penitentiary policy upon the whole. Later, lotteries were also restricted. On June 6, 1928, the Workers-Peasants’ Government of the RSFSR issues the resolution, "On Banning the Draw of Liquors in Lotteries". First, on January 1, 1930, the USSR SPC issues the resolution "On the Procedure of Issuing Permits for Lottery Arrangement", and then, on August 31, 1932, another USSR SPC Resolution #1336 was announced, "On the Regulation of the Lottery Business".

Perestroika and casinos boom

The first slot machines which appeared in the country quite lawfully, were installed only in 1988 in hotels which were part of the USSR State Committee of Foreign Tourism (Goscomintourist). Within the system, the All-Russian Business External Trade Union (VHVO) "Intourservice" is set up, developing new kinds of additional services for foreign tourists, payable in free convertible currency. And private businesses have no access to gambling operations. Despite an eagerness to deal with slot machine installation and operation, the Soviete authorities allowed it only within its state structures, only as an experiment. To be on the safe side, there was a legal reminder that the business still cannot be entered. On December 29, 1988, the Council of Ministers of the USSR issued another resolution, this time "On the Regulation of Certain Activities of Cooperatives According to the Law on Cooperation in the USSR", which, in particular, stressed that cooperatives are not entitled to perform gambling operations.

On August 23, 1989, the Soviet government lifted its ban on gambling and opened the first gambling house in Moscow. The first slot machines began to be installed in 1988 in the hotels of the USSR State Committee for Tourism. In the first year, 226 slot machines with cash prizes were installed in Intourist hotels in Moscow, Leningrad, Sochi, Yalta, Minsk, Tallinn, Vyborg and Pyatigorsk. The first casino in the USSR, Astoria Palace, opened in the Estonian SSR in the spring of 1989 at the Palace Hotel in Tallinn. The second casino was opened in Moscow on August 23, 1989 at the Savoy Hotel.

Current status

In 2009, gambling was banned almost everywhere in Russia. The only exceptions are four specific arranged zones, namely "Altai Palace" in the Altai Republic, "Sobranie" in Kaliningrad, "Casino Sochi" in Krasnaya Polyana near Sochi and "Shambala" and "Tigre de Cristal" in Artyom near Vladivostok. The Azov City gambling complex in Krasnodar was closed in 2015.

2007 gambling law

Gambling may be arranged solely by registered legal entities according to the set procedure within the Russian Federation.

The law contemplates that four gaming zones will be created within the Russian Federation; meanwhile no more than one gaming zone may be created within one and the same constituent entity. Gaming zones are to be set up within the Altay, Primorie and Kaliningrad regions and on the border between the Krasnodar region and Rostov region.

The names of the territories are "Siberian Coin" (Altay), "Yantarnaya" (Kaliningrad region), "Azov-city" (Rostov region), "Primorie" (Primorie region), and "Crimea" (Crimea region).

The gambling operator should submit the data needed for exercising control of compliance with the legislative requirements. The net assets of the gambling operator cannot be less than: 600 million roubles (for operators of casinos and slot halls) and 100 million roubles (for operators of bookmakers' offices and totalisators).

Bookmakers' offices and totalisators, apart from those opened within gaming zones, may be opened solely based on licences, the procedure of issuing which will be determined by the government The customer service area for gamblers in casinos cannot be less than 800 square metres. The customer service area in a casino shall feature at least ten gaming tables. Should slot machines be installed in the casino customer service area, the area of the slot machine zone cannot be less than 100 square metres and the zone shall feature at least 50 slot machines. The technically implied average winnings (payback) from a slot machine cannot be less than 90 percent.

The law came into effect as of January 1, 2007. The gambling facilities which comply with the above-mentioned requirements may continue their operations till June 30, 2009, without obtaining permits for activities on gambling organisation and arrangement in gaming zones. Any gambling facilities that fail to comply with the requirements set out by the law shall be closed by July 1, 2007. Gambling operations using information and telecommunication networks, including the Internet, and communication means, including mobile communications, are prohibited.

Gaming business licensing was also changed. In fact, there remained only one activity to be licensed – the organisation and arrangement of gambling in bookmakers’ offices and totalisators. In legal terms, gambling operations in casinos and slot halls will exist only on a pro forma basis as of July 1, 2007 and as of July 1, 2009, licensing will be completely substituted with a system of permits and shift to a regional level from a federal one. The latest edition of the law on gambling business falls on March 28, 2017. This Act regulates the legal framework of state control over the activities of institutions that organize gambling. The Act introduces restrictions on the exercise of this activity in order to protect citizens' morals and the legitimate interests of the population.

The legal gambling age in Russia is 18.

Taxation

In 2004, the Law #142-FZ “On Gambling Tax” being in effect for a sixth year, Chapter 29 “Gambling Tax” of the Russian Federation's Tax Code came into effect. A new and the most complicated stage in the area of gambling taxation began. As of January 1, 2004, gambling tax became regional and its receipts are transferred to the budgets of the Federation's constituent entities. As of 2004, each region was entitled to independently determine the gambling tax rate within the limits provided for by the Law #142-FZ “On Gambling Tax”. The taxation rate for slot machines with cash winnings was 1,500 to 7,500 roubles and for gaming tables, totalisator cash desks and bookmaker cash desks – 25,000 to 125,000 roubles. Any previous privileges with regard to the gambling tax were cancelled.

Online casino tax rate: fixed amount, monthly 2,500,000 – 3,000,000 RUB (payable by online sports betting licence holders, the only kind of online gambling licence available in Russia).

Poker and online gambling

Poker in Russia was very popular during the collapse of the USSR, when people started being interested in Western culture and values. In the Soviet Union it was possible to play poker only in cellar clubs or the casino. In addition, players often gathered in private flats. By the end of the 90s it was the first attempt to hold poker tournaments, but it did not get the widespread popularity at the time.

In 2010, the Russian Masters Poker Cup was held in one of the legal poker zones, Azov City. This event did not cause much popularity, since the location of the gambling zone was unsuccessful, two casinos were in an empty field. The hotel in the casino had only 14 rooms. The zone became popular with players from Rostov-on-Don, while the rest preferred to play via the Internet, or traveled to the CIS countries, where live poker was not prohibited.

See also

• Russian roulette, often attributed to having started in Russia
• Problem gambling
• Fyodor Dostoyevsky, a Russian who is considered to be one of Europe's major novelists, became addicted to gambling.

References

• Los Angeles Times: Irked gamblers cash in their chips as Russia follows through on casino ban
• Washington Post: Gambling Industry Explodes In Russia
• Legal regulation of gambling in former USSR countries, Evgeny Kovtun. ISBN 978-5-903391-12-7
• Stake Casino - Crypto Gambling Site Nr. 1 Worldwide