Russia Continues Cracks Down On iGambling Payment Processors

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Friday, August 12th, 2016 | Written by Stephen Smith

It’s not a good time to be an online poker or sports betting fan in Russia. While for years black market sites managed to scrape by without coming under fire from the Russian government, the situation has changed dramatically since October 2015, and the country’s authorities have now moved their attention beyond just the operators of illegal sites to those processors who willingly accept payments from gamblers.

Status of Online Gambling in Russia

In October 2015, the Kremlin ordered Russia’s media regulator, Roskaomnadzor (technically known as the Federal Service for Supervision in the Sphere of Telecom, Information Technologies, and Mass Communications), to take action against sites offering illegal online poker, casino games and sports books within Russia’s borders.

Since the orders were handed down, Roskaomnadzor has blocked 6,000 gambling and gaming sites, preventing ISPs located in Russia from accessing them. In June 2016, Roskaomnadzor added another 118 sports book sites and online casinos to the black list. The move to limit access to illegal gambling has also resulted in 50 gaming apps from iTunes and Google Play being made inaccessible to individuals located in Russia. Sites and apps are reportedly being evaluated by the Russian Federal Tax Service in order to determine if they are providing illegal gambling.

Even before the official order to focus on curbing online gambling, Roskaomnadzor had been known to enforce the country’s gambling laws when flagrant violations were found. In 2014, PokerStars, William Hill and SportingBet then all voluntarily closed their sites to avoid coming under fire.

Interestingly, PokerStars eventually began allowing Russian players to sign up again, but in mid-July, Roskaomnadzor blocked their site. Undeterred, PokerStars subsequently provided new links to Russian players to allow them to access its site. These types of actions are notably adding fuel to the fiery controversy about whether or not PokerStars should be permitted to operate in California if and when online poker legislation is passed.

Blacklist Extends to Payment Processors

Roskaomnadzor has now put payment processors with links to online gambling in their cross hairs in an effort to further limit Russians’ access to gaming sites. The rationale is that if processors accepting transactions from illegal gambling operators are blocked, individuals who are continuing to use workarounds like the ones provided by PokerStars would find it more difficult to continue playing.

In mid June, Roskaomnadzor blacklisted Skrill and Qiwi, two e-wallet services. Both sites were accused of offering links to illegal gambling sites for promotional purposes and for processing payments out of Russia for the sites. Qiwi was given 24 hours to remove the links from their sites and quickly issued a statement saying that they intended to make things right, and discontinue processing payments for illegal sites.

The situation is only likely to get bleaker for online gambling in Russia. Roskaomnadzor is requesting that the government draft legislation that would expand their authority and provide them new, more powerful methods of enforcing anti-gambling laws.

Ordered To Remove Operators From Customer-base

This week, Russia has gone a step further in its efforts to clampdown on illegal online gambling, with news agency, Izvestia, reporting that Roskomnadzor has ordered Russia’s largest bank, Sherbank, to remove unlicensed online gambling operators from their customer-base. A similar letter was apparently also sent out to payment processors Yandex and Skrill.

As a result of its efforts to stamp out the grey market ahead of its plan to legalize and regulate sports betting in the country, the sole payment processor currently allowed to handle iGambling transactions is the government-backed TSUPIS. Commenting on the development, Anton Rozhkovsky, Chairman of the TSUPIS Board of Directors, stated:

“This is the first case in Russia, where not just the operators of gambling sites have been blocked but also the domain names of well-known payment systems, which freely give Russian citizens the opportunity to transfer funds to participate in gambling. This is a very important step in the fight against illegal gambling on the Internet, which we in TSUPIS certainly welcome.”