On the 1st of September 2021, a Unified Gambling Regulator began operating in Russia. From now on, it is this public-law company which detects illegal activities, controls the gambling market and provides extra-budgetary funding for sports in Russia.
The law on the establishment of the Unified Gambling Regulator was adopted in December 2020, and the provisions begin to be applied in practice from the 1st of October – the powers are set out in the federal law “On the public-law company “Unified Gambling Regulator” and in the federal law No 218 of 12.06.2021, which amended certain legislative acts of the Russian Federation.
Leadership of the Unified Gambling Regulator
Alexei Grachev has been appointed as the head of the Unified Gambling Regulator in the Russian Federation for September 2021. The post has been appointed for a five-year term. Previously, Grachev headed LLC “Sports and Fatherland”, the founder of which is the Centre for Boxing Progress.
The regulator’s supervisory commission was chaired by Alexander Kharistov, from the Ministry of Finance of the Russian Federation, and Oleg Saitov and Kirill Shchekutyev (representatives of the Russian Boxing Federation) from the sports side.
How does the Unified Betting Remittance Centre work?
The Unified Betting Remittance Centre was established to financially monitor the settlements between bettors and bookmakers. This structure brings together all legal betting companies and replaces the existing First Center for Taking Interactive Bets (TSUPIS). On the 25th of August 2021 a non-banking credit organization “Mobile Card” was appointed to fulfil this role, with its 49% share transferred to VTB Bank in September. In turn, the main shareholder of VTB Bank is the Russian Government.
- A bit of history: what is TSUPIS how did it work?
At the same time, the financing functions of the Unified Gambling Regulator itself were assigned to Modern Payment Solutions. This company is owned by several projects from VTB as well as the Boxing Progress Centre (owned by Umar Kremlev).
How does the new regulatory system affect the betting market?
The rules of the betting market in Russia are unstable and legislation is constantly changing in an attempt to establish maximum regulation of operators by the state.
For example, in September 2021, a major international bookmaker decided to leave the Russian market and is closing 888.ru amid instability and government pressure on Russian bookmakers. Earlier, amid the introduction of new legislative initiatives, bookmakers VulkanBet and bwin officially announced that they would cease operations in Russia.
Key changes and implications of the creation of the Unified Gambling Regulator:
- A credit institution through which bookmakers and bettors operate, must join the regulator’s information system. If the company fails to comply with this requirement, it will have its license withdrawn. Modern Payment Solutions is the developer and operator of the monitoring system for gambling operators and acts as the financier of the Unified Gambling Regulator.
- The new Unified Regulator interacts with the Federal Tax Service, and sends data to the tax authorities. The law establishes the obligation of the organizers of gambling in a betting shop or sweepstakes to submit information to the Unified Gambling Regulator’s information system on absolutely all players’ bets and each financial transaction via technical means of communication.
- Bookmakers’ money will be transferred to sports development. With the entry into force of the new law, bookmakers’ spending on earmarked deductions has at least doubled and will amount to 1.5% of the amount of all bets. The minimum amount per quarter has risen to 30 million rubles. Profits received from betting on domestic events will be distributed in proportion to the number of relevant bets. International events – in proportion to the number of profits, taking into account a number of individual criteria. The founder of the company on behalf of the Russian Federation at the time of adoption of the law was the federal agency Rosimuschestvo.
- Bookmakers and sweepstakes will be the subject to check for violations of legal provisions through special risk indicators. This term refers to parameters which record the bookmaker’s compliance or deviation from control values: an increase in the number of events, an increase in the number of bets. This means that if a bookmaker (bettor) develops too fast and shows good rates of growth of income and customer base, it falls into the category of potential violators.
On the 1st of October 2021, the Russian betting market will start operating under new rules. It’s interesting to know what happens next….