Bookmakers and totalizators in the Moscow region will pay higher taxes starting May 1, which would affect facilities accepting customers from all over the country. Ahead of the FIFA World Cup taking place in Russia this summer and the new gambling legislation taking effect in May, members of the Moscow regional legislative body voted to double the gambling tax.
The amendments to the current law on gambling regulation and taxation were approved Thursday, March 29 by the deputies in the Moscow’s regional parliament or Moscow Oblast Duma. They will come into force on May 1 and will apply to all sportsbooks and totalizators in the area that accept interactive bets. This means that the taxes will be raised for sportsbooks which take bets from customers based not only in the country’s capital but in other parts of Russia, as well.
Deputies have determined marginal tax rates to vary from 2,5 million to 3 million rubles which is between US$43,000 and US$52,000. The maximum increase of the tax rate for operating gambling venues will be twofold. Bookmakers have not yet commented the tax raise and it is unclear whether it would affect bettors themselves – it should not unless bookmakers and other gambling venues decide to raise the fees paid by gamblers. The amendment is expected to result in higher revenue from taxes, with the additional funds calculated at 23 million rubles (around US$400,000).
The news for the tax increase was announced Thursday by Mikhail An, the head of the regional Ministry of Economy and Finance. It comes at a moment when Russia is preparing not only for the World Cup which starts June 14 but also for the new gambling law which takes effect May 25. The higher tax rate in the Moscow region may be even more profitable for the city, as the capital is home to one of the largest and most active betting markets in the country.
Russia’s New Gambling Regulations
Russia has a legal, yet very restrictive online gambling market and with the planned new legislation, it aims at putting even more stringent rules regarding off-shore gambling and betting operators. It is still unclear what the exact regulations will be, but officials have announced that according to the new law, Russian banks will no longer accept payments from foreign payment processors and gambling companies.
The crackdown on off-shore online sportsbooks and gambling sites is not new and one of its purposes was to bring in more customers from websites to land-based casinos. Last year, the first casino in Sochi opened in Russia’s new dedicated casino and gambling-dedicated zone. Now, the World Cup is expected to be the most-bet-upon sporting event of the year – the entire world will make bets and a large portion of these bets will come from Russia.
According to experts, most sports bets in the country are still illegal, which means that billions of rubles are flowing into the black market each year. How the increased taxes would deal with this issue, however, is unclear. With the higher taxes, most unlicensed gambling and betting operators will have no incentive to apply for licenses and become legal.