Russia Planning Gaming Tax Increase

November 4, 2017 by

Gambling Tax Hike Set For Russian Budget 

News has emerged that Russia will soon be looking at some serious gambling reform. The country has not altered their gambling regulations for the last 13 years. Russia’s recent involvement in a variety of international hot button issue, not least of which is accusations of meddling in the US election, has allowed their planned gambling reforms to fly relatively under the radar but their proposed new legislation as many operators in the country very worried, and rightly so.

The proposed review of the gambling taxation system in the country was raised by the Finance Ministry and is set to be tabled on the 10th of November. Currently gambling operators do not pay any taxes on slots, table games and other betting activities. Instead operators pay fixed fees, or levies per machine or table.

At the moment, tables are taxed an $863 levy while electronic betting machines are taxed at a $51 levy. The new taxation proposal will raise table game levies to $4300 while slot levies will be raised to $250. Online betting will also not be exempt. Currently “online betting processing centres” pay a fee of $41 000 but this is set to be raised to $51 000. These increases are planned for the 2018 to 2020 budget period.

Hard Sanctions Drive Need For Revenue

Rumours abound on why these steep increases are to be implemented. Some critics of the Kremlin say that the government is hoping to drive smaller operators out of business so that the oligarchs can consolidate businesses and create a gaming empire in service of the government. Others however point to the fact that Russia has recently been through a spate of international diplomacy disasters.

What has hurt the country most was their annexation of the Crimean peninsula from the Ukraine following heavy political unrest in the country, started in part by Russia meddling in the country’s politics. The escalating rhetoric and the continued role that Russian paramilitary groups played in the Ukraine lead to numerous sanctions imposed on Russia.

No matter how much political support president Vladimir Putin has, it doesn’t change the fact that the economy is suffering badly form sanctions and the state needs to find serious alternative sources of financing to keep the economy stable. Since the international economic sanctions have only been ratcheted up in recent months, the situation will not improve anytime soon and it seems that now the local gaming industry will be the President’s next target for takeover.

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