Russia has targeted unlicensed online casino operators for the past few years in an attempt to stop illegal gambling in the country and offer better protection to its citizens. Russia is blocking online gambling domains at a faster rate than any other jurisdiction that has banned online gambling.
However, the number of unlicensed operators targeting Russians continues to increase each year as Russian had to block twice as many illegal gambling domains in 2018 when compared to 2017. The number of blacklisted online gambling domains is expected to be even higher by the end of 2019.
Russia’s telecom watchdog Roskomnadzor blocked a little less than 63,000 online gambling domains in 2017 and a little more than 130,000 gambling domains in 2018. In January and February of 2019, the country blocked close to 5000 online gambling domains. At the beginning of the year, the Russian regulator hinted that it has plans to implement the latest technologies to make sure that no Russian citizen can access sites that the government does not want them to access.
Why Russia Does Not Permit Online Casinos
Although online gambling in Russia is not like online gambling in New Zealand, Australia, Denmark, and other countries, the situation was different a few years ago. The country used to permit offshore online casinos licensed in reputed gambling jurisdictions such as Isle of Man, Gibraltar, UK, and Malta. But today, even online casinos licensed in the above-mentioned jurisdictions are not permitted in Russia.
Here are a couple of reasons for the ban:
#1 Protect Land-based Casinos
Russia banned online casinos because it wanted to protect its land-based casinos. The few brick-and-mortar casinos in Russia need protection because they are located in four exclusive gambling zones. Russia permits gambling only in those zones.
The ban on online casinos is meant to encourage players to visit land-based casinos such as the Altai Palace and Oracle Casino. Very few players would travel all the way to these casinos if they could just play at an online casino from the comforts of home.
#2 Protect Vulnerable Groups
You may wonder why Russia limited its land-based casino gaming industry only to four regions if the country only wanted more gambling revenue.
The government of Russia felt the need to ban online gambling and restrict land-based gambling because it was alarmed at what legalized gambling was doing to its minors. In 2002, a year in which gambling was perfectly legal in Russia, Moscow alone had 58 casinos, around 70,000 slot machine games, and 2000 gambling rooms. They advertised their services and products heavily, capturing the attention of underage players, especially school-going children. As a result, teenagers started preferring playing slots to going to school.
The Russian Association of Gambling Business Development stated that half a million people gambled in Moscow every single day. Psychiatrists in Moscow, on the other hand, argued that more than half a million people gambled daily in Moscow, putting the number down to 1.5 million.
#3 Curb Fraud and Money Laundering
The Russian government was not just worried about underage gambling, problem gambling, and gambling addiction, but also about fraud and money laundering. Most of the gambling establishments dodged taxes heavily. Moreover, the government had little control over the large number of illegal and unlicensed offshore gambling companies that operated in Russia.
All the above-mentioned factors led the government of Russia to take the strong step of banning casinos throughout the nation overnight. The main reason was to protect and improve social health and to end the unethical business practices that fueled gambling activities.
Russia’s Gambling Laws – Brief History
Russia’s gambling laws are quite simple. The country has banned all forms of online gambling. It is illegal for a resident of Russia to open a gaming account at an online casino. In addition, as mentioned above, the country allows land-based gambling only in four exclusive areas.
To understand why Russia has banned online gambling and allows brick-and-mortar casinos only in four regions, one has to read the history of gambling in Russia.
The Soviet Union had banned gambling of all types from 1928 – 89. The country relaxed its gambling laws slightly after 1988 and started allowing slot machine games in certain localities. By 1989, the country had legalized all forms of betting and gambling.
Soon, brick-and-mortar casinos started mushrooming all over the country. In 2002, Moscow alone had more than 50 casinos, indicating the fast and uncontrolled popularity of gambling in the country. The government of Russia felt that it had to intervene, and in 2006, it enforced a law banning all kinds of online gambling although it continued to welcome overseas online casinos that accepted Russian players.
In 2009, the government felt the need to restrict brick-and-mortar casinos as most of them failed to comply with the country’s gambling regulations. As a result, it decided to permit brick-and-mortar casinos only in four localities—Krasnador Krai, Kaliningrad Oblast, Primorsky Krai, and Altai Krai. You have to travel all the way to these localities if you want to gamble legally in Russia.
In 2012, the Supreme Court of Russia decided that Russian ISPs should block overseas online gambling sites, making it difficult for Russian players to access them. It also created a special regulatory body called Roskomnadzor to identify and block all unauthorized online gambling sites. At the same time, it is worth noting that the government of Russia is more interested in targeting and curbing operators of online gambling sites, not individual Russian players who gamble online.
Today, Roskomnadzor continues to identify and block online gambling sites. It has also blocked popular online gambling sites such as PokerStars. However, Russian players who had downloaded the PokerStars app before the government banned online casinos can continue to play on the app. Russian players, in the meantime, are continuously searching for ways to access and use offshore online gambling sites.
Despite the ban, Russians have not stopped gambling online, and there are reports to show that 65% of the gambling in Russia is done illegally through unauthorized online casinos.
Russia’s Tough Gambling Laws – Law 244-FZ
This law encompasses the following:
- Whenever you win a substantial amount of money at a Russian casino, you have to provide identification proof such as a passport in order to receive your money.
- Casino operators are required to carefully record each and every bet placed by players.
- The RTP of slot machines in Russia cannot go below 90%.
- The gambling floors of a Russian casino should not be less than 800 square meters and should not have fewer than 10 gaming tables.
- Sports betting establishments are not permitted to offer slot machine games.
Future of Online Gambling in Russia
What does the future hold for online gambling in Russia? Will the country accept the fact that its current gambling laws are incapable of curbing illegal gambling activities? Will Russia implement effective regulatory frameworks that not only protect vulnerable groups, but also prevent gambling revenue from flowing out of the country?
Gambling enthusiasts and well-known casino operators continue to remain optimistic that Russia will one day adopt and implement better gambling laws such as those in Sweden, Denmark, UK, and New Zealand. For now, they will have to keep their fingers crossed as Russia is in no hurry to make any changes to its online gambling legislation.