Is Russia Considering Online Poker Legislation?

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Wednesday, February 10th, 2016 | Written by Adam Brown

Gaming analysts predict that the full legalization of online poker may soon be on the way in one of the biggest countries in the world, namely Russia. While players are not celebrating quite yet, there is certainly plenty of room for optimism that the nation of 143.5 million could soon embrace regulating its multi-million-dollar online gambling industry.

Why Russia Would Legalize iPoker

Currently, there are an estimated 20 million people in Russia who regularly play poker through illegal websites. There are signs, however, that Russia may soon classify online poker as a game of skill and begin allowing site operators to register for a license to do business in the country. In order to obtain a license, operators would need to pay an initial fee, adhere to regulations established by Moscow and pay taxes to the government. While there are no clear cut timelines confirmed, some experts believe that the change could come as soon as in the next few months.

Many Russian politicians, including Civic Chamber member Pavel Sychyov, feel that banning online poker hasn’t done anything to stop people from playing poker online. Instead, players have just resorted to using illegal websites. As Sychyov explains:

“We are trying to counteract the illegal online gambling, but we understand that it is very difficult to control the Internet in principle.”

The All-Russia Public Opinion Research Center estimates that 16 percent of all adults in Russia are currently using these illegal sites. Legalizing online poker would allow these individuals to continue to play and for Russia to receive revenue in the process.

Extra Tax Revenues

If passed, online poker legislation would require international operators to keep their data servers within Russia, whilst prohibiting the companies from sending the data they receive to servers based outside of the country. In this way, operators will be more easily monitored by the Russian Federal Tax Service, and any unregistered sites can be classified as illegal.

In addition, the government is expected to require players to submit information on their financial and tax status so as to gamble online, although a number of factors will have to first be ironed out before an action plan is formulated. Assessing the overall situation thus far, Moscow politician Alexander Zakondyrin said:

“Russians play poker, but their money goes abroad. In the crisis situation, low oil prices and sanctions against Russia, which excludes the use of foreign debt markets, Russia’s budget needs additional income.”

Other Benefits

Legalizing online poker could have other benefits for Russia as well. Currently, the Russian government is working to ban technologies like TOR and VPNs that allow people to use the Internet anonymously. By making it legal for people to play online poker, the government will eliminate the need for many people to use these technologies, making the Russian people possibly more willing to accept a ban on their use.

Effect on the Rest of the World

If Russia does ultimately succeed in legalizing online poker, there could be ramifications elsewhere in the world. As more countries classify poker as a game of skill rather than one of chance, it becomes harder for other nations to argue that the game should be banned. It’s possible that regulation of iGaming in Russia could further the fight for legalization of online poker in the U.S., at least in some states that are currently open to the matter, if not nationwide. As former New York Senator Alfonse D’Amato stated in the Washington Post back in 2011:

“Congress knows that poker is a game of skill. Congress knows that playing games of skill in American homes needn’t be outlawed. And Congress knows that, since poker is a game of skill that is legal in the home, it should be legal to play it online.”

The Road Ahead

Many industry insiders feel that the Russian government is no longer debating whether or not they should legalize online poker, but rather how they should do it. Nearly 6 months ago, word came that Moscow was seriously considering regulation, but since then, there has been little progress made toward actually passing the legislation needed to make it a reality. The biggest issue is that some lawmakers do not want foreign operators to profit off of online gaming in Russia and wish to find a way to require profits made on Russian poker sites to remain in the country.