Gambling Laws in Russia Explained 2024

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Russia’s gambling laws towards casinos and electronic gaming machines today are highly restrictive yet very lenient towards lottery and in-land sports betting. 

The government banned EGM and casino gambling in the country except in five designated gambling zones. But bookkeepers and state lotteries are accessible anywhere in the country.

Discover why Russian gambling law favors some of the gambling forms and heavily restricts others through the lens of history and legality.

Highlights of the Article

• Russia has three main gambling sectors: Lottery, Bookmaker, and Casino-EGM.
• In 2006, Russia banned gambling all over the country except the designated gambling zones: Kaliningrad, Primorye, Altai, Sochi, and Crimea.
• The primary legal framework enforced in Russia regarding gambling is Federal Law No. 244-FZ.
• After enforcing Federal Law 244-FZ, the Russian government enacted Law No. 142-FZ, which taxes different gambling games, establishments, and operators.
• The Russo-Ukrainian War had severe consequences for the gambling industry. Ukraine had revoked three online gambling licenses by Russian nationals.
• Russia is the fourteenth biggest gambling country in the world, with a total Gross Win of $4 billion.
• The legal betting age in Russia is 18 years old and applies to all gambling forms.
• Online Gambling is strictly prohibited in Russia. However, there are exemptions for sportsbooks.

The Legality of Gambling in Russia

The Russian gambling industry is a highly regulated but thriving market. Russia’s government deems specific regions as its “Special Gaming Zones,” wherein gambling facilities and activities are legal.

In the case of Russia’s online gambling, this segmentation remains illegal. However, the State governs lotteries, with offline sports betting considered legal anywhere in the country.

Helpful Articles

Russia isn’t the only country worldwide to create complex laws behind its gambling scene.

Explore Singapore’s extensive and intricate gambling legal framework to gain comparative insights and understand why each country governs betting differently.

State restrictions have forced illegal gambling operators underground. From 2009 to 2011, the Russian Federation’s Prosecutor’s Office exposed 3,900 illegal casinos and 25,031 unlicensed lottery clubs. 

Licensing systems exist for casino and sports betting, and bingos and lotteries are under direct state control and monopoly. This factor makes Russia among the strictest gambling countries worldwide.

Before we proceed, let’s take a step back and briefly revisit the long history of Russia’s gambling origins, which started centuries ago.

The History of Russia’s Legal Gambling Scene

Russia’s gambling scene began in the 18th century as an aristocratic leisure.

Throughout the country, gambling centers flourished to such a great extent that by the 19th century, they permeated the different social classes.

However, following the Socialist Revolution, wagers were frowned upon in Russia. The government then issued a decree that propelled the closure of all gambling operations except for the following:

• Lotteries that generate income for the regime
• Horse Races were used by the ‘Red Army’ to breed horses for the corps.

After the collapse of the Soviet Union in 1991, paired with the lack of a proper legal framework, gambling in Russia thrived again.

Fun Fact

Among the most essential betting games that affected the world beyond just the gambling industry was Horse Racing.

For example, in Russia, horses from betting games were crucial for mobilizing its Red Army, and the UK’s horse racing became significant in symbolizing royalty and the class system in the country.

In 2006, 6,300 licensed gambling establishments and 3,000 lotteries were run by 300 companies. 

While the gambling market thrived in the late 1900s and early 2000s, betting regulations became a significant problem for operators and players.

The collected government revenue only amounted to $5 to $7 million. In comparison, illegal gambling establishments evaded $300 to $340 million in tax revenue. 

In 2006, Pres. Vladimir Putin’s regime enforced new restrictive legal measures to thwart illegal gambling operations called Federal Law No. 244-FZ, which became Russia’s betting act. 

The Gambling Law of 2007: Russia’s Betting Regulation

Due to the rising number of illegal gambling establishments and tax evasion, the Russian government enacted Federal Law No. 244-FZ on December 29, 2006.

The law regulates all gambling operations with revised individual legislative acts of the Russian Federation.

The 2007 Gambling Law prohibited casinos and EGM operations in Russia, except in designated gambling zones, which the country acknowledged as official gaming zones in 2009.

The law gives the State the power to control and enact the following line of action:

• Initiate arrangements, procedures, and restrictions concerning gambling’s operation and organization. 
• Assign geographical restrictions where the gambling industry is only permitted to operate.
• Authorized government institutions issue licenses and permits. 
• Banning, revealing, and putting down businesses that violate the law.

As of 2009, this law includes banning casinos outside designated areas and enforcing bookmakers and betting. The Russian government also amended the act to prohibit all private lotteries.

The overall purpose of Federal Law No. 244-FZ is to manage the gambling industry and its operations. 

This move gained the support of media commentators for several reasons: 

• To protect the youth from gambling problems,
• Minimize the social costs of gambling-related problems,
• Cut the connection between organized crimes and gambling,
• Secure Russian identity,
• Improve taxation.

Among the most crucial reasons why Russia needed to develop a comprehensive gambling act was to manage the taxation issues the government had experienced with illegal gambling activities.

In 2004, to combat the taxation problem, the Russian government constituted a more stringent gambling taxation law, which became the country’s most complicated taxation phase.

Russian Gambling Tax: Law #142-FZ

While Russia’s Law #142-FZ was in its sixth year, Chapter 29 of the Russian Federation’s Tax Code was enacted in 2004. The Russian gambling tax allowed each region to determine the gambling tax rates independently.

Quick Tip

Operators will give you IRS tax forms when a person wins more than $600 in gambling. These forms will verify your total income when your tax return is processed.

If your winnings are around $5,000 or more, your money might be taxed by 31% for federal income tax.

Under Law #142-FZ, the Russian government has different methods of taxing its casino operators and bookmakers.

For inland casinos, the regime requires gambling operators to pay taxes depending on the number of games, while sports betting taxes depend on how many machines and licenses they own. 

The tax rates are also assigned depending on which region the establishment operates. However, most of the federal government applies the highest rate.

The lotteries and the bookmakers are required to give contributions to professional and youth sports. Sports betting operators are significant sponsors of Russian sports leagues.

The table below summarizes the beneficiaries and stakeholders of each type of gambling in Russia.

With Russia’s comprehensive gambling laws and purposive taxation, there have been significant improvements in the country’s betting scene, especially in its five legal gambling zones.

Helpful Articles

Each country has its method of taxing gamblers on their winnings.

Read this article on taxing your gambling winnings to learn whether or not you should report your betting prizes and how much should be reported.

Legal Gambling in Russia’s Five Zones

The Russian government widened the scope of Federal Law No. 244-FZ in 2009, prohibiting the operation of all casinos in the country except in five areas called “Gambling Zones.” 

All casinos in Russia’s gambling zones acquired their operating licenses from the Ministry of Finance, and their line of operations must stay within the allowed betting areas.

Did You Know?

To own a brick-and-mortar casino, people should have at least $500,000 – $4 billion in their bank accounts.

Although it is costly, the potential income of casinos can double your investment.

Two main reasons for establishing the five zones are to boost tourism and attract foreign investors. The government wishes to mimic a Las Vegas-type gambling destination for interested gamblers.

Learn more about the special zones in Russia where gambling is legal.

Altai Republic (Siberian Coin)

The Altai Republic is known as the “Siberian Coin” since it’s the only area in Siberia where gambling is legal and documented. The first and only casino in the zone is the Altai Palace Casino. 

Altai Palace Casino has operated since 2014 and is the smallest casino in the Russian gambling zones. The establishment is also a hotel and resort offering many types of entertainment.

The casino offers gambling facilities such as:

• 50 gaming machines,
• A poker room,
• 15 table games.

In 2020, Russian media reported the country’s plan to build a ₽3.5 billion casino and hotel, which they project to open in 2024. The media added that the casino will have around 300 slots and 100 gaming tables.

Kaliningrad (Yantarnaya)

Kaliningrad stands in Russia’s mainland Europe region. The area saw its first big gambling activity in 2016 with the introduction of the Magic Crystal slot hall, which was initially unlicensed.

In 2017, developers constructed Sobranie, Kaliningrad’s first legal casino, which cost ₽3.5 billion to build. The casino spans 5.5 hectares on the coast of the Baltic Sea, among the biggest casinos in Europe.

Casino operators envision Sobranie as Kaliningrad’s glorious gambling hub, with 14 gaming tables, 350 slot machines, a VIP section, luxurious food and drinks, and premium entertainment.

Krasnaya Polyana (Sochi)

The most bustling area in Krasnaya Polyana is Sochi, with its Sochi Casino & Resort. The city hosted the 2014 Winter Olympics, the most expensive Olympic event in history, costing $21. billion.

Sochi Casino & Resort, with an area of 16.54 hectares, hosts a complex that includes:

• 70 gambling tables,
• 569 slot machines,
• Two restaurants,
• A lounge,
• A bar,
• An event hall.

Sochi’s operations offer over 1,000 workplaces, which benefits its citizens. Apart from Sochi Casino & Resort, the area has two other gambling establishments: Boomerang Casino and Bonus Slots Machine Hall. 

Boomerang Casino offers a variety of games for their guests. Their 20 table games host Blackjack, American Roulette, and Russian Poker activities. The casino also holds about 200 gaming machines.

Meanwhile, Bonus Slots Machine Hall served as Sochi’s more affordable casino alternative to attract tourists and visitors through an easy and cheaper gambling experience.

Artyom-Vladivostok (Primorye)

Primorye was considered Russia’s most significant gambling property. The zone is supposed to have 11 casinos. In fact, the country’s largest casino is located in Vladivostok, at 620 hectares.

The first casino in Primorye was Tigris de Cristal, over half of which is owned by the Hong Kong company Summit Ascent. This casino is said to be China’s biggest investment in the Russian region.

The area has had a number of unsuccessful foreign projects, including five-star Hyatt hotels. Factors for the failed ventures in developing Primorye include:

• Transportation,
• Logistics,
• Slow development of visa-free travel for Chinese visitors.

The gambling zone features entertainment centers, casinos, hotels, villas, yacht clubs, and other tourist sites.

Crimea (The Golden Coast)

In 2014, Pres. Putin planned for Crimea to become its fifth gambling zone, only hindered by political disputes. This came to fruition in 2019 through assisted lobbying from PM Medvedev.

Gambling facilities in Crimea were already being developed as early as 2017 in anticipation of its approval, with a total gambling area of 16.8 hectares located on Russia’s Black Sea coast.

The gambling zone was the latest addition, with the Head of the Republic, Sergey Aksyonov, still asking for more investors to build the new gambling complexes.

The State expressed its plan for a gambling and entertainment center on the Crimean Peninsula in Katsiveli in 2022. Developments started early in 2021 but were halted due to COVID-19.

Quick Tip

For gambling enthusiasts who prefer the fun side of gambling more than the prizes, there are games called Social Casino games, which are free-to-play gambling games.

People in Crimea waiting for casinos to become legal can try Social Casino games to test their skills, master their favorite games, and experience the betting life without breaking the law and their banks.

Russia’s Abolished Gambling Zone: Krasnodar (Azov City)

Azov City, located in the Krasnodar region, was previously Russia’s largest gambling zone. The place featured three casinos:

• Oracle
• Nirvana
• Shambala

However, the Krasnodar Region government moved the zone to Anapa in 2010, with many residents and investors supporting the decision. 

The National Administration approved the law amendment by The Russian State of Duma. With this, the region of Rostov was removed from the list of allowed gambling zones in Russia.

The decision sparked conflicts between the regional authorities and landowners of the existing casinos in Rostov. However, in 2012, Pres. Putin canceled the plan and called for Azov City’s expansion.

Did You Know?

A significant leak was spread in 2021, stating that Pres. Putin allegedly owns the Black Sea Palace. The $1.4 billion property contains casino slots and arcade machines.

This news was published by the Russian opposition leader Alexei Navalny. 

The prime years of Azov City were seen after that year; developers and investors reacted swiftly to the announcement of expansion made by the Prime Minister.

Most of the casino-goers in Azov City were amazed by the developments of the gambling activities offered by the establishments. The most popular games were:

• Poker
• Blackjack
• Roulette
• Slots

Fun Fact

The popularity of roulette in Russia is well documented, to the point that the country has its own version of the game, Russian Roulette.

Although the game is a vastly different “game” from regular Roulette, the odds of winning are far worse.

Azov City flourished with the help of poker tournaments, exciting offers from casinos, and many musical concerts held in the casinos.

Unfortunately, PM Dimitri Medvedev signed an order to support the gambling zone in Sochi, dissolving Azov City as one of the gambling spots in the country.  

On December 31, 2018, the gambling zone was liquidated. All of the casinos and gambling establishments were shut down.

The State of the Russian Gambling Industry in 2023

Despite Russia’s strict gambling laws, it is still listed among the biggest gambling countries. Russia was ranked #14 in top gambling countries and boasted a total GGR of $4 billion in 2022. 

Here is a list of the top gambling countries worldwide: 

Side Note

As the 4th biggest gambling country in 2023, Italy credits much of its betting industry’s success and stability to the stringent gambling rules and regulations that its government has created for its citizens.

In 2022, sports betting companies in Russia earned a total revenue of ₽879 billion.

The sports betting scene is expected to grow by over 173% between 2018 – 2026. It is anticipated to yield $613 million or around ₽55.96 billion at the end of the forecast. 

The most beloved sports that Russians bet on are:

• Soccer
• Horse Racing
• Ice Skiing

Russian bookmakers launched their first operations in 2016. Currently, it is becoming the fastest-growing gambling sector.

The bookmaking industry’s estimated legal and illegal revenue amounted to around ₽677 billion. However, 40% of this was estimated to come from the illegal market. 

The government has monopolized lotteries. As of 2014, private lotteries were banned, and only state lotteries were allowed in the market. 

Fun Fact

The value of the global lottery market reached $10.3 billion in 2022, with Europe holding the largest share with 43.2% in 2021.

Two Ministries oversee its operations: 

• Ministry of Finance (named Sportloto)
• Ministry of Sports (named State Sports Lotteries)

In 2015, Russia’s lotteries totaled ₽13.6 billion. In 2016, it made ₽24.8 billion, and ₽37 billion in 2017.

Russia issued its gambling tax law to secure the mutual benefits between the state and operators. The tax law charges duties on gambling business activities, which go to the budget of Russian regions. 

Gambling Forms Available in Russia

The Russian government bans various gambling products. However, amendments in their gambling laws have allowed people to participate in betting games under strict supervision. 

Russia’s legal gambling market consists of three primary categories/sectors: 

• State Lotteries
• Casinos and EGMs
• Bookmakers

Online gambling is strictly illegal in the country, except for online sports betting through bookmakers.

Sports Betting

Sports betting is Russia’s most in-demand activity. The revenue of Fonbet’s betting company reached ₽220.78 billion, making it Russia’s highest-earning betting company in 2022.

Football is the most popular sport in the country and was consequently its most bet-on activity in 2022, with around 16% of Russians aged 18-24 wagering on the sport. 

Below are the specific years when sports betting was legalized in Russia.

The Ministry of Finance requires sports betting shops and outlets to obtain a license.

Unlike casinos, which can only operate in special gambling zones, land-based bookmaker outlets are scattered all over Russia.

Did You Know?

The cheapest online gambling licenses in the world are Curacao and Anjouan, which only cost operators  $21,000 – $25,000 to apply.

Russian bettors can access online sportsbooks. Both foreign and domestic sports betting companies can apply for a license. The operators of virtual sportsbooks must get a license from the Federal Tax Service. 

Although cryptocurrencies such as Bitcoin, Litecoin, and Ether are legal in the country, the current gambling law in Russia does not directly state whether cryptos can be used for gambling transactions.

Casinos

Brick-and-mortar casinos in Russia have operated legally since 1987. Casinos must get a license from the Ministry of Finance and should only operate in the designated gaming zones.

Helpful Article

Casinos have long existed worldwide as early as the 1600s.

Explore the history of the world’s oldest active casinos to learn how embedded gambling is in every country’s culture and lifestyle.

Casinos were allowed to operate nationwide in Russia until 2006, when Federal Law No. 244-FZ banned betting infrastructures except in its special gambling zones.

Gambling games in Russia have reached a revenue of $9.61 million in 2022, and experts predict it will grow to $19.59 million by 2027. 

Lotteries

Lotteries, specifically Sweepstakes lotteries, remain large in Russia and even all over the world. Sweepstakes made $10.3 billion in the global online lottery market. 

In Russia, a single operator, Stoloto, monopolizes the lottery in the red country. The company has paid over ₽17.6 billion worth of tax for sports programs and culture through its daily sales. 

The Ministry of Finance secures funds from the lottery to enhance Russia’s physical activities:

• Support for Professional Sports
• Sports equipment at schools and gyms
• Sporting events

Russians are hooked on lotteries due to their jaw-dropping jackpot reward of ₽167 billion. Bettors can place their bets via the online application of Stoloto.

Offshore operators and other online lotteries are illegal in Russia.

Bingo

With Bingo being around for almost 500 years, it’s no surprise that the game has reached the Red Country. If you’re a Bingo fan, Russia may be a good fit for you, as the game is legal in the country.

Stoloto is the sole operator contracted by the State to facilitate Bingo with real money rewards. It is legal as it is considered to be a form of lottery. Bingo is also available in online social casinos.

Online Bingo is also allowed in Russia. Stoloto manages an online Bingo game called Bingo-75. However, foreign operators for Bingo are outlawed as it is a game controlled by the State.

Fun Fact

75-Bingo, there is a 0% chance to win with a “Blackout” on the 15th draw. When the caller draws the 60th ball, there is a 0.00140 chance that a blackout card will win, which means there may still be no chance someone will win.

Blackouts, or Full House, is a sweet jackpot and one of the most satisfying wins any Bingo player can achieve. This win involves all numbers being called on a player’s card.

Achieving a blackout usually takes 50 to 60 calls out of 75.

The Russian-Ukraine War: Its Effect on the Gambling Industry

Aside from the societal effects of the Russian-Ukraine War, it also had economic consequences, affecting both countries’ gambling industries.

Among the most affected segmentations is online gambling. Since 2020, when Ukraine legalized online gambling, foreign investors have taken part in the country’s gambling operations.

Side Note

Among the few segmentations barely affected by the Russo-Ukranian war was the global online sports industry market.

The global sports industry has an increase in economic value of $25.55 billion, with an average CAGR of 5.2% from 2022 to 2023.

In actuality, Russia heavily influences Ukraine’s gambling industry. Ukrainian policies for gambling used to be limited. With Russian influence, Ukraine has developed better gambling.

As the conflict worsened, the Ukrainian Commission for the Regulation of Gambling and Lotteries (KRAIL) called off the licenses of three online gaming operators headed by Russian nationals. 

Betting Age Restriction in Russia 

Like most countries, Russia’s legal age to participate in gambling is 18 years old and above. These include lottery, sports betting, and land-based casinos. 

Warning

Statistics show that two-thirds of adult gamblers are exposed to betting early, and 15% of players admitted that online gambling is more addictive than in physical casinos.

Gambling Penalties in Russia 

Russia imposes a fine on its citizens when caught participating in illegal gambling activities. However, the government does not severely punish the players. 

Side Note

The Criminal Code of the Russian Federation lays out the punishment for perpetrators who commit illegal gambling activities.

Under Federal Law No. 38-FZ, all gambling advertisements should adhere to the marketing and ad standards, such as:

• Marketing materials must not target individuals under 18.
• Ads displayed outside the designated special gambling zones must not include any images of animals or people.
• Marketing paraphernalia must refrain from encouraging betting as a primary source of income.
• The ads must only air between 10 pm and 7 am in the specified gambling zones. 

The Anti-Monopoly Service punishes operators who violate the restrictions. Penalties are in the form of fines.

Offshore gambling operators that offer gambling services to the locals are considered a criminal offense. Violators must pay ₽800,000 to ₽1.5 million as a first warning and ₽2 million for the second offense. 

If an organization or a person runs a gambling operation without a license, they are punishable by imprisonment of four years. They can also sanctioned with a fine of ₽800,000 to ₽1.5 million.

Side Note

Some of Russia’s policies on gambling regulations and views mirror China’s, especially on utilizing State Lotteries to fund the country’s regions and communities.

Read about the state of China’s gambling regulations in 2023 to learn about the similarities and differences in gambling laws of various countries worldwide.

Well-Known Russian Personalities Who Violated the Gambling Law

Due to their financial implications, gambling and sports are among the most exploitable activities worldwide. Sports corruption and betting rings are prominent, attracting top officials and personalities.

Some high-profile individuals have been caught violating Russia’s gambling laws. They were public officials who had power and status in the Russian society. 

Below are some of the famous people who faced penalties for such crimes.

Former Russian Prosecutors: Dmitry Urumov and Vladimir Glebov

Police officers detained two former Russian prosecutors in Basman District on May 6, 2011. Dmitry Uromov and Vladimir Glebov were allegedly linked to illegal gambling activity in Moscow. 

The investigators claim that local prosecutors of the region and senior police officers were protecting the illegal gambling ring.

Moscow is not a part of Russia’s gambling zone. Hence, it is considered outlawed. Other known officials involved were former Moscow region prosecutors Alexander Ignatenko and Eduard Kaplun.

Head of St. Petersburg Municipal Precinct: Oleg Kalyadin

The internet went wild when video footage showed that the apartment of Oleg Kalyadin, the Head of Municipal Precinct in St. Petersburg, was used to house a lot of casino equipment.

The police recovered slot machines, roulette, poker, and other table games inside the property of Kalyadin. After the incident, the politician stepped down from his post and was removed from the ruling of the United Russia Party.

To rent out your apartment, where a criminal business starts to take off, is absolutely incompatible with being a member of our party,

Vyacheslav Makarov (Speaker of the City’s Legislative Assembly)

Bottomline

Russia’s gambling industry has undergone various significant transformations in recent years due to various global factors, such as the pandemic, the Russo-Ukranian War, and modern technologies.

With the success of illegal gambling markets in the past, it is a commendable act that their state government enforced proper regulatory frameworks that ensure the safety of their citizens. 

By placing itself as one of the biggest gambling countries in the world, even with stringent legal measures, the Russian gambling industry shows so much promise. Undoubtedly, through time, it will become bigger and more open.