Gambling licensing in Russia has been in limbo since the beginning of the year because the State Sports Committee, previously charged with issuing licences, was superseded by the Federal Agency for Physical Culture, Sports and Tourism without licensing powers. On Friday it was decided by the government that gambling licences should be issued by the Federal Tax Service, causing a mixed reaction from the gambling operators.

Whilst many agree that gambling regulation in the country is past overdue and that both licensing and control should be under one authority, not everyone is happy that it will be the taxman tasked with the responsibility. This will put too much power in the hands of one body, according to some. Between 2002 and 2004 the State Sports Committee issued over 4,000 gambling licences throughout Russia for as little as US$50 each. Slot machines numbers in Moscow alone are estimated at 70,000 and expected to rise to 100,000 unless restrictions are applied.

The Moscow Duma has recently voted to double gambling taxes from next year. Every slot machine will pay around US$262 each month and gaming tables around US$4,370. With many machines making in the region of US$700 to US$1,000, the tax increase will not deter most operators. There have also been suggestions that the number of gambling establishments will be limited, and even that they should be compelled to move outside centres of population but the Moscow authorities would be loath to abandon their gambling taxes.

It will be some time before it becomes apparent whether gambling in Russia will be properly regulated. Until it is, and responsible gambling guidelines introduced, the anti-gambling lobbies will gain a louder voice. It would seem to be in the interests of everyone that a Russian Gambling Act is drafted and passed sooner rather than later. (E-11.22.05)

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