Home Features 4H Agency: Gambling Regulation in Eastern Europe: Recent Developments and New Perspectives

4H Agency: Gambling Regulation in Eastern Europe: Recent Developments and New Perspectives

Recently, more countries in Eastern Europe have started to regulate gambling, especially when it comes to its online aspect that has been growing very fast. At the same time, the size and potential of the region promises operators big opportunities, both due to the population and economic indicators.

In this article, Gennady Novikov, Head of Consulting at 4H Agency, focused on reviewing the latest regulatory news in the Balkan countries and the post-soviet region. The chosen approach makes it possible to assess the attitude of state authorities to the regulation of the gambling business, to understand the chosen approach and, as a result, to highlight the trends in the development of the gambling business in the region.

ALBANIA 

Summary: 

Gambling was legal in Albania till January 2019, but, since then, many forms of gambling and mostly all of the online gambling verticals are banned (except bingo, lottery and licensed Albanian casinos). The operators are quite limited in their marketing opportunities while enforcement agencies are relentless in their attempts to control illegal gambling operations.

Updates: 

In the spring of this year, a bill was submitted for discussion that regulates online betting, which was completely banned in 2019. The government recognized that thoughtful regulation reduces social risks and generates revenue for the state, while the ban on such activities encourages illegal operations. Taxation potential of the market may be measured in EUR tens of millions, according to some estimations.

GEORGIA 

Summary: 

There is no separate online gambling license, but online gambling is regulated through land-based licenses. The lottery is a state monopoly, and all other forms of 

gambling are regulated and legal.

Updates: 

The ban on gambling advertising introduced in 2022 showed negative results for the protection of players and state budget revenues due to a decrease in the share of legal operations. Another important update is the introduction of online-only licenses, separate from land-based operations. They will be available since June 2024. 

KAZAKHSTAN

Summary: 

Gambling has been legal in Kazakhstan since 1991, online gambling is also legal since 2007 (except for online casinos). Though the market is very restricted, e.g., in 2007 the country restricted all casino operations to two designated gambling zones.

Updates: 

Government is considering reform of the market that should address the following pain points of the market: 

  • gambling addiction, introduction of new tools for responsible gambling;
  • revision of the approach to taxation as there is a discussion about the inapplicability of VAT to the gambling business; more to that Kazakhstan government understands that current taxation / licensing system is outdated and requires revision to be on par with the international practice;
  • creation of the effective model of control over the payment of taxes;
  • gambling advertising.

It is expected that a draft law with a proposal for reforms will be introduced in Q3-Q4 this year, which will initiate a process of broad discussion of the future of the gambling market in Kazakhstan.

KYRGYZSTAN

Summary: 

Gambling was almost fully banned in Kyrgyzstan since 2012, but legalized in 2022 and now is open for online and land-based betting and only for foreign players.

Updates: 

Kyrgyzstan has introduced a strange regulatory model, allowing operators to accept only bets from non-residents. This approach is due, on the one hand, to religious preferences (most of the population are Muslims) and the simultaneous desire of the government to attract additional investment in the economy.

Also, because the economy of Kyrgyzstan needs to raise funds, the National Bank of Kyrgyzstan recently proposed to allow the online sector to accept payments in both national and foreign currencies, which may be an interesting solution in the region. 

MONTENEGRO 

Summary: 

Gambling has been legal in Montenegro since 2006, and online gambling was legalized in 2011 – though, regulations were comparatively light and fairly limited.

Updates: 

On February 13, 2023, the Montenegrin government tabled gambling law amendments in parliament that would introduce a blacklist of online gambling operators targeting the country without a local license along with website and payment blocking measures.

ROMANIA

Summary: 

Gambling both land-based and online is regulated in Romania (except for lottery with state monopoly). The market is known as strong and liberal for its licensing processes for foreign operators and players.

Updates: 

In the early spring of 2023, the government began discussing a ban on gambling advertising.

Amendments include banning gambling ads between 6am and 11pm, except during live sports broadcasts, as long as they include the warnings to “Be responsible” and that gambling is illegal for those under 18 years of age.

The public discussion indicates that the parliamentarians understood the risks of such changes and, most likely, the draft will not be adopted.

UKRAINE

Summary: 

After an 11-year ban, Ukraine re-legalised gambling in August 2020 through a comprehensive new gambling law. An extensive licensing system is currently in place, regulating all gambling verticals (except for lottery with state monopoly).

Updates: 

In the spring, the government proposed to eliminate the gambling commission, as well as to make the licensing process online, but the draft law was not supported by parliament.

In parallel, despite the incompleteness of the legalization of gambling in Ukraine (initially it was assumed that after legalization the tax legislation would be changed in the second stage), the activity of state bodies is observed on the market: the fight against tax evasion, the recent annulment of a number of licenses and the application of sanctions against operators, as well as the resumption of discussions on the adoption of tax amendments, indicate the desire of the state to obtain a positive result of the reform.

UZBEKISTAN

Summary: 

Online and land-based gambling has been illegal in Uzbekistan since 2002, and betting has been banned since 2007 (except lottery).

Updates: 

On April 7, 2023, the President signed a decree “On additional measures for the comprehensive development of grassroots and professional football». 

This decree orders the Ministry of Youth Policy and Sports to create a special working and expert group with the goal to submit proposals to the Cabinet of Ministers on the implementation of sports betting activities in expanding the football financing system based on best foreign 

experience.

There is no exact date when sports betting will be legalized, but it seems that the legalization is imminent.

4H Agency opinion.

The general trend in the countries described:

  •  Legislators and regulators have realized the benefits of legalizing and controlling gambling as opposed to prohibiting it, especially in the online sector
  •  Laws that introduced special local conditions of regulation over time prove their inoperability, the region began to actively explore the experience of Western jurisdictions, which is trying to implement
  • Very often politicians try to speculate on the topic of potential problems from the uncontrolled spread of gambling, which, in turn, creates non-competitive conditions for legal operators in front of offshore

We at the 4H agency quite often communicate with various government agencies, including in this region, and we can say that in the past few years, we have seen a growing request from the authorities for the best global practices in the field of gambling regulation to create balanced regulation conditions.

The countries of Eastern Europe and the post-soviet region are very promising for operations because many of them have a large population, powerful economic indicators, and the level of regulatory requirements is quite low due to the recency of the history of regulation of these markets.

Don’t forget to subscribe to our Telegram channel!

Exit mobile version