Russia is moving in to uproot offshore gambling and poker in the country. This is not an unprecedented move at a time when other major jurisdictions, such as Australia have already made and acted upon similar decisions.
The Fallout of the Gambling Bill
Over a year ago, Russian Federation President Vladimir Putin signed a bill that would have immense implications on the industry. Today, this is finally happening with Sberbank, one of Russia’s financial banking behemoths, effectively blocking any payments originating from betting agencies and poker rooms based outside the federation.
Sberbank has made an official statement saying that it will fully comply with Federal Law No. 244, which mandates that all gambling-related payments from foreign entities are blocked. However, this measure will not affect operators within the country.
The measures have already hit payments in card rooms, too, with the community confirming that they have been experiencing problems cashing out their funds through the bank. The measures that Russia is enforcing have to do specifically with hand-picked operators that are put on a blacklist.
Some of the entities that are featured on the list are among the best-known names in the whole industry, with companies such as PokerStars, 888poker and partypoker all being caught in the new sweeping ban.
This has been occasioned by an active campaign led by Roskomnadzor, the country’s regulator that was actively seeking to list websites that must be prohibited to Russian gamers. Targeting some of the world’s best websites is not surprising, as Russia has been experiencing problems with taxing any proceedings obtained playing on those platforms.
Russia has carried out similar sweeping changes directed at gambling in the past when the country had its own “Black Friday” in 2009, prohibiting all forms of the activity.
Russia Reforms Gambling & Poker to Tax It
The main reason for the government to seek a tougher control on foreign operators is rooted precisely in the ability to tax the proceedings of domestic gamers who avoid paying anything on their earnings. The numbers, as cited in the official reports, stood at 70 per cent of all gamers that attended foreign cardrooms and avoided paying tax on returns.
Not only that, but Russia is now changing the way financial transactions in the gambling industry can be made, relying on a specific payment solution called TSUPIS. This will consolidate the government’s control over the segment and allow it to start taxing players properly.
TSUPIS is used for multiple activities, including paying taxes. Meanwhile, some of the biggest names in poker have been trying to cope with the fallout. The Stars Group is one of the affected entities, although CEO Rafi Ashkenazi has kept a brave place, explaining the company’s acumen in dealing with difficult legislations and being ousted.
The Stars Group has also been among the operator to report difficulty clearing the payment process and transferring funds to Russian customers. According to Mr. Ashkenazi, the problem as such is not really a problem, as the company has been in similar situations before.
However, he said that he was not allowed to comment on any mitigation measures that the Stars Group may have undertaken at the time.
With the new legislation softly elbowing foreign operators from the market, poker players and gamers of all stripes will have to turn to what local companies have to offer, and eventually pay taxes.
Mr. Putin has aced it.