Russian government to levy new tax on bookmakers

The Russian government is planning to levy a new tax on bookmakers and totes, according to Russian business daily RBK, citing a draft of the relevant amendments to the Russian Tax Code.

“Betting shops and totalizers will be obliged to pay 2.5 – 3 million rubles [US$36,600 – $43,900 dollars] per month for the opportunity to take bets online, according to the draft amendments to the Tax Code. This is 100 times more than the current lower tax limit, which [Russian] regions are allowed to levy upon betting shops and totes,” the paper said.

The document was prepared by the Ministry of Finance on March 21 and approved by the government commission on legislative activities, participants in the meeting told RBK.

The fee for each processing centre accepting online bets will be decided by the authorities of the region. However, if no such decision is taken, then the sum of 2.5 million rubles will be applied.

The new tax is expected to be introduced from January 1, 2017. With its help the authorities expect to fill up regional coffers, according to the opinion of government staff. The proceeds of the tax on gambling is to fully go to regional budgets.

Meanwhile, head of the First Self-Regulating Organisation of Russian bookmakers Oleg Zhuravsky told the RBK that the new tax should not hinder bookmakers from offering bets online.

“The state will receive good taxes and create an environment which will not throw obstacles in bookmakers’ path and hinder players from receiving their winnings. Bookmakers won’t refuse to work online because of the new tax. Compared with the assets that betting companies have to collect to get a license, a monthly tax of 2.5-3 million rubles looks ridiculous.”

Zhuravsky also added that there are now 31 licensed betting companies in Russia, whose annual turnover is estimated at $1.5 billion dollars, with returns of around 10 percent.

Last week, local media also reported that a new bill introducing amendments to the Federal Law “On Physical Culture and Sports in the Russian Federation” would be enacted. According to the document, Russian bookmakers will be obliged to allocate 5 percent of their income for the benefit of the sport. The amount of contributions should be at least 15 million rubles a quarter (three months) per company.