Report on Internet Gambling in Russia
 

Development of the Internet Gambling in Russia can end, not having begun: the State Duma of Russia has approved in the first reading the bill, along with stationary gambling institutions forbidding  use of the Internet for the organization of a gaming. However, participants of the market are not afraid for the future, believing, that the legislative imperative will turn out badly first of all to the state, instead of Internet - casino which will simply move to offshore.
But what will be with this business now?
Now in Russia operates up to one and a half tens large on-line casinos and about fifty small players. Several years ago interest to the Russian market of Gambling was shown by some western players armed with modern technologies, experience and volumetric budgets.
Today, when deputies discuss an interdiction on gambling in the Network, this segment of the Russian market still stays in embryo. According to the president of Association of a gaming in the Internet and the co-owner of “Chance” Oleg Zhuravsky, the share of the Russian Internet - casinos does not exceed 2-3 % of the world market.
Nevertheless, the Internet Gambling in the country grows rather dynamically.
The factors constraining development on-line Gambling in Russia, are: a low level of penetration of the Internet in the country, low user qualification (the significant part of visitors of a Runet simply is not able to carry out even elementary financial operations in the Network), and also mistrust of potential players to services of virtual casinos. However in due course the barrier constraining development of a gaming in the Russian segment of the Internet, became ever less.
The increasing popularity in the country various payment systems and « cybernetic money » began to use, and the degree of trust to such form of remote payment of the goods and services has appreciablly increased.
All spoke that the Russian market of on-line Gambling was ready to enter awkward age and a phase of confident growth already in all respects.
Not having thought up as the roulette in the Internet looks and how to tax it, officials have decided to forbid online Gambling.
                In Russia the market of an Internet - casino for the present is right at the beginning of a long way. Leading positions are occupied with foreign operators, but the niche was found also with domestic projects.
The main trouble of Russian online Gambling consists that in our country this business is (at least while - before coming into force of the bill forbidding gambling in the Network as a class) outside of a legal field, but not outside of the law. Anyway, activity of an Internet - casino till now is not regulated. That is de jure the online - casino in Russia simply is not present. In the legislation there is a concept of a game table or the game automatic device, but there is no game server. Officials yet have not thought up how to tax roulette in the Internet.
Attempts to adjust a gaming in the Internet and to enter it into frameworks of the current legislation already were undertaken. In 2003 the State Duma has considered and even has approved in the first reading the bill « About a gaming in the Russian Federation » in which the status of an online - casino for the first time has been determined. However the bill has failed: legislators simply could not take into account all aspects of regulation of a gaming in the Network. As it was marked in the letter of the Ministry of Finance of the Russian Federation signed by deputy head of department of a tax and customs - tariff policy of the ministry of Alexander Ivaneev, at realization of enterprise activity in a computer network the Internet at the gambling organization (including the online - casino) are absent objects of the taxation which would get under action of chapter 29 of the Tax code « the Tax to a gaming ».
However, many owners of an Internet - casino have decided to not search for superfluous problems to themselves on a head and have registered the projects in the countries with the clear and worked legislative base regulating activity on-line gambling at home. Basically it is the island states nearby to Northern America where the lion’s share of all world Internet casinos is registered. Accordingly, taxes are paid in a place of registration.
So, persecutions on a gaming have touched also the Internet Gambling. Still before it began known about plans of legislators to forbid network gambling in Russia, the president of group of companies IBS Anatoly Karachinsky predicted: « After the Internet Gambling has been practically forbidden in the USA, similar acts in Europe and in Russia will be accepted. I do not see prospects of the further development of this business at us».
In the bill which has been brought in the State Duma by the president, it is spoken, that use of Internet - space for the organization of a gaming is forbidden (an item of 5 items 3). However while in the project of the document a word it is not told about the one who and how will supervise observance of an interdiction. But even if this question would be adjusted, any essential changes would not take place. Such methods to forbid a gaming in the Network will fail. The form, but not the maintenance will change only.
Large Internet - casinos simply will replace jurisdiction, most likely, having gone in offshore. For players will not change anything. Really, to forbid to players to visit websites of an Internet - casino it is impossible, as it is impossible to forbid activity (availability, accommodation of advertising, etc.) in the Russian segment of the Network of those casinos which are registered in offshore and consequently, have no relation to the Russian legislation.
It is not the bill, only a declaration. The probability of the next failure in system of state regulation is great. Instead of achieving objects  the state will simply force out business in a shadow.
The Internet - casino have casually got under disgrace. An ultimate goal of acceptance of the bill is repartition of the game market, instead of its regulation. Not pressing thoroughly in essence of process, our legislators as it is usual have cut from a shoulder: all casinos in special zones, and the rest to forbid. Taking into account an insignificant share of the market, a falling share of an online - casino, than anything is sillier, than this bill to think up, probably, it was impossible. While many countries (for example, the Great Britain), facilitate a condition of existence of gambling Internet - business, involving that money which now departure from the USA where the similar law has been accepted, Russia has decided to refuse these incomes. As a result of acceptance of this bill of money which brought the Russian Internet - casinos, will leave together with them to Ukraine, to Baltic or in general in offshore.
Under forecasts of many experts, the first from coming into force of the bill the state will suffer whereas large business, on the contrary, will receive additional profits.
Internet - casinos will pay less taxes, having registered in offshore.
How it would be possible to adjust this business? At the order of legislators there is an experience of many countries where the Internet Gambling is adjusted very well, and this branch brings the considerable income in the budget. Simply enough to copy the legislation and to adapt it under the Russian realities. The interdiction on the Internet Gambling, in opinion of the majority of experts, strongly gives populism. Some deputies cannot, and even do not want to understand a difference between the game automatic device in a bakery and the specialized game service in the Internet.
Representatives of the industry still hope for a celebration of common sense. The Russian gaming in the Internet dies, and not having had time to be born.
To achieve the termination of games in the Internet it is possible only with the help of financial tools, as in America, or blocking of IP-addresses, as in China. Today the Russian payment systems willingly cooperate with an Internet - casino. But whether they will continue to work with them after coming into force of the law - the big question.
In absence of payment systems work of an Internet - casino is hardly possible, as own network of distribution of payment cards is rather expensive structure so incomes of an Internet - casino hardly will justify its maintenance.
If to payment systems directly will not forbid to carry out transaction with participation of an Internet - casino, the status quo will be kept. In fact any bank or the company is the commercial enterprise which main task is generation of the profit for shareholders.
All depends on with what hearings of the bill will end.
Despite of condensed clouds, the market the Internet Gambling in Russia, apparently, remains quite perspective for an investment.
There are bases to believe, that wishing to try itself on this path still much - whatever deputies of the State Duma have decided.

Besides some experts connect development of Russian Gambling  in the nearest years with activity of the foreign companies. After acceptance of anti-Gambling law in the USA and a collapse of shares of the large companies in the share market, and also in connection with refusal of these companies of service of Americans expansion of the large companies on the Russian-speaking markets is rather probable in the next year.