Russia’s Ministry of Finance calls for tenfold gambling tax hike

Russian land-based and online gambling operators are reeling after the government confirmed plans to gradually raise gaming taxes by a factor of 10.

On Friday, Russia’s Ministry of Finance published a notice on its website indicating draft guidelines for its budget, tax and customs tariff policy for 2018 through 2020. The notice includes plans to double gaming taxes starting January 1, 2018, with further increases to follow gradually until 2020, by which time the gambling tax rates will have increased “by 10 times.”

The Ministry notes that gambling taxes haven’t increased since January 1, 2004, and that the hikes are required “in order to increase the revenues of the budgets of the constituent entities of the Russian Federation.” The taxes are to be applied on a regional basis and paid where gambling companies’ operations are situated.

Russia has been looking for ways to boost its gambling tax take from casinos, bookmakers, lotteries and sweepstakes, which is why Friday’s notice calls for “the introduction of new objects of taxation of the tax on gambling; the processing center for interactive betting shop bets, the processing center of interactive betting rates.”

The Ministry first publicly mused about the tenfold tax hike a year and a half ago. This was followed by a proposal to boost online sports betting duties by a factor of 100, to impose a 10% revenue tax for the country’s new online betting licensees, and for bookmakers to make mandatory contributions toward the nation’s sporting bodies.

Russia’s land-based operators don’t currently pay tax on their gaming revenue, but pay flat fees for each gaming table or electronic gambling machine. Land-based bookmakers also pay a flat fee for each retail outlet under their control.

RUSSIA’S ESPN SEEKS ONLINE BETTING PARTNER
The specter of Vladimir Putin putting his hand deeper into bookmakers’ pockets isn’t scaring off companies interested in joining Russia’s current dirty dozen officially approved online betting licensees. This week, Russia’s public sports broadcaster Match TV announced it planned to launch its own online betting service, Match Stavka (‘Match Betting’). early next year.

According to a Kommersant report, Match TV has launched a tender for an online betting technology partner to build its website in time for the start of next year’s FIFA World Cup, which is being held in Russia for the first time. The deal effectively makes this a branding exercise, with the technology partner required to supply everything but the site’s name and logo. Interested parties have only until October 12 to express their interest.