Legal Limbo Dilemma of Russian Online Gambling

Legal Limbo Dilemma of Russian Online Gambling
An enormous online gambling market is currently being exploited by just a few operators who have created online casinos that offer their services in Russian.

At present, the number of mainstream operators that have created online casinos that can offer their services to the Russian people is relatively low. This is especially marked when compared to those that operate in English, Spanish or other widely spoken languages. Those who are not taking advantage of this market are missing out on a slice of an industry worth $3.6 billion which is presently unregulated and neither legal or illegal within the Russian Federation.

The history of gambling within Russia itself is a long and winding one. The first ever Russian lottery was organized by Tsar Peter the Great in 1698 and it ran successfully up until the overthrow of the Tsar monarchy and the installation of communism early in the 20th century by Lenin. All forms of gambling were made illegal and remained so for most of the 20th century. People were not even permitted to play cards. In fact all games involving playing cards were illegal.

Things changed in the late 1980s, when gambling returned to the then Soviet Union. It was not officially legalised, although it was permitted without regulation allowing it to grow into a large and highly profitable industry. Large casinos and gambling establishments began to appear all over the country. It wasn’t until 2006 when Vladimir Putin clamped down on the industry by moving all the casinos out of large cities such as Moscow to remote locations in the country. Strangely, this did not include bookmakers who were allowed to continue operating as long as they were in possession of a valid operating license.

More importantly is that the Russian government does not provide licenses for Russian based companies to operate Internet gambling websites. This means that presently, the only places that Russian citizens are able to gamble online happen to be those operated by offshore companies. Those websites that do operate in Russian are enjoying a bumper time as their income has sky rocketed thanks to there being little competition for this sector of the market.

Things are set to change, with analysts predicting a fall in the revenue generated by the Russian online gambling market in 2010 to $1.5 billion brought about by legal changes. Even so, loopholes exist such as 2003 legislation signed by Putin which allows private companies to operate electronic as well as traditional lotteries. This has already seen an explosion of electronic lotto machines emerging in cities and towns across Russia.

While the finance minister works on lottery law amendments, internet gambling remains unregulated and as such is set to keep growing as the number of land based casinos continues to dwindle in Russia.