Bill seeks to establish new gambling regulator in Russia

Russia is seeking to establish a new regulatory body for the country's entire gambling industry, after a ruling party bill went to parliament last week.

Bill set for first reading

Project laws No 1055657-7 presented by Victor Deryabkin i Igor Stankiewicz both representatives of the ruling party One Russia. The first reading of the draft in the State Duma should take place before the end of the year, after its approval by Committee on Economic Policy, Industry, Innovative Development and Entrepreneurship at the Pride November 17 .

The bill would establish a new regulator for the gambling industry to improve the level of control and oversight in the industry and increase tax revenues from gambling that would go to Ministry of Culture and Sports .

Monitoring the industry and detecting illegal operations would fall under the legal remit of the new regulator, which would also engage in cooperation with other regulatory bodies as needed, and contribute to Russian gambling legislation by proposing industry changes.

Increase in tax on turnover in sports betting

The bill also proposes to increase the tax rate by 1% turnover from sports betting, imposing a minimum fee on each sportsbook operator in of RUB 5 million ($65,650) per sports league, and to ensure compliance with the new tax, the bill seeks to scrap the current system of two online payment centers used by bookmaker associations in the country.

A single payment centre is to replace the existing system to ensure all bookmaker transactions are monitored in real time and the new sports betting tax is deducted. Under the new tax, betting on international sports will also be deductible.

The new regulatory authority will be subject to to the Ministry of Finance and would be governed by a board of five members, a chairman and four members, each appointed for 3 years by the government. The regulator would be headed by a CEO, who would also be appointed by the government for a period of 5 years.

Concerns for the industry

The proposed law has already been heavily criticized by licensed sports betting operators, claiming that the government will only succeed in destroying a well-functioning system instead of increasing funding for sports. As a result, betting companies would significantly reduce the amount of sponsorship. Furthermore, representatives of sports associations said that representatives of both parties have no experience in the industry, and the proposal is more likely to increase federal funding than help sports.

The first reading of the bill would follow an analysis Legal Department State Duma, to be handed over by December 1.