Russia Introduces Bill to Ban International iGaming Transactions

As the ongoing cyberwar waged by Russia on various Western democracies rages on in the shadows, the country’s government has made the iGaming industry an explicit target.

Per reporting published by the Russian news service RBC.ru and industry outlet iGamingBusiness.com last week, the country’s Ministry of Finance has introduced a bill which would ban financial transactions made between Russian citizens and international online gambling operators.

Officially known as Bill 1113576-6, this anti-iGaming legislation was first submitted to the State Duma – a legislative body loosely akin to the U.K. parliament or U.S. Congress – back in 2015. That initial draft proved to be contentious, however, with several government ministries and Russian financial institutions objecting to its strict limitations.

Even so, the original version of the bill did receive support from Russia’s autocratic ruler, as President Vladimir Putin expressed his approval for tighter iGaming regulations.

After several rounds of revision and amendment, the bill has returned – largely intact on the fundamental level – to the forefront of the Duma’s legislative agenda.

Having recently been passed through a second reading, the consensus among Russian political experts is that the bill’s passage is a foregone conclusion.

If and when that passage occurs, the Federal Task Force would begin compiling a so-called “blacklist” of internationally licensed online gambling operators which currently serve Russian customers. From there, any attempt to deposit money to one of these banned sites would be blocked by the facilitating bank, credit card company, or online payment processor.

Alexander Zakondyrin, a politician and lawyer based in Moscow, described the financial impetus for such a blacklist to Business Insider in January of 2016:

“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.”

As Russia continues its attempts to enter the modern world of regulated online gaming – and reap the tax benefits therein – the country’s conservative government has made incremental progress. Online sports betting is now offered on a legal basis by licensed domestic operators, although online poker and casino games remain illegal.

Accordingly, one of the blacklisted operators that would be targeted by this bill’s passage would be PokerStars. Currently, the global leader in online poker reports more than 8 percent of its worldwide player base accessing the site from Russian IP addresses.

Online poker in Russia isn’t limited to PokerStars either, as a 2016 article published by PokerNews quoted academic researcher Roberto Carmona-Borjas’ estimate that 16 percent – or 20 million Russians – currently play on one platform or another.

In light of that and similar reporting, and taking the lucrative nature of online poker among iGaming enterprises, certain insiders believe that the Russian government’s new bill is designed to effect regulation rather than prohibition.

Kirsan Ilyumzhinov, president of the World Chess Federation, offered the following appraisal of the online poker debate last year:

“It should be legalized; too many people are involved and are playing online. There are no reasons that it should be hidden and illegal.

I am working together with the government in order to allow online poker to become an intellectual sport in Russia.”

Zakondryin went one step further, expressing his belief that legal online poker would soon follow sports betting:

“In my opinion, conceptually the decision to legalize online poker has been already made by the Russian government. As early as June 2014, Shuvalov instructed the Ministry of Economic Development and the Ministry of Justice to prepare a report on such a project’s prospects.”