After a decade-long ban, Kyrgyzstan legalized gambling for foreigners in 2022, expecting significant growth in state revenues.
The government permitted the reopening of casinos but with strict restrictions. The main changes focused on land-based premises, with casinos allowed to operate only in designated zones. Additionally, while casinos were allowed to open, the government imposed additional tough regulations, limiting access exclusively to foreign visitors.
At the same time, the government also began to focus on online gambling, aiming to establish regulations for this new expanding segment.
Kyrgyzstan’s new legislation highlights the government’s intent to balance economic growth with social responsibility. While the reopening of casinos is viewed as a potential driver for tourism and foreign investment, the new regulations are also designed to curb the negative effects of the gambling industry and limit its impact on local citizens.
4H Agency provides a brief overview of the current gambling legislation in Kyrgyzstan, shares the latest updates, and offers perspective on the industry’s future development.
Legal Framework:
- Law of the Kyrgyz Republic dated June 30, 2022, No. 50 “On Gambling Activities in the Kyrgyz Republic”;
- Law of the Kyrgyz Republic dated May 10, 2017, No. 78 “On Lotteries”;
- The Tax Code of Kyrgyzstan – defines tax rates and obligations for gambling operators.
The Service for Regulation and Supervision of the Financial Market is responsible for issuing licenses and overseeing the activities of gambling operators.
Available Verticals:
- Online casinos (Online casinos include the organization of real-time gambling in single-player and multiplayer modes using a hardware-software complex adapted for conducting gambling via the Internet);
- Land-based casinos (Defined as an entertainment venue where gambling with cash winnings is organized using gaming tables);
- Bookmakers and totalizators (Betting on sports and other events);
- Lotteries (State, professional, and promotional lotteries).
Licensing:
A license for an online casino, land-based casino, or bookmaker is issued for a period of 10 years.
Cost:
- For online casinos – 8.4 million soms (~€93,000) and 1.26 million soms (~€14,000) for the administration of an online casino.
- A casino license in cities of republican significance, such as Bishkek and Osh, costs 84 million soms (~€931,000). This is a one-time payment for ten years. In other regions, the cost of a license is lower and ranges from 25.2 to 42 million soms (~ from €279,000 to €465,000), depending on the area.
- For bookmakers and totalizators – 10.5 million soms (~€116,000).
According to the website of the Service for Regulation and Supervision of the Financial Market, the current number of licenses is as follows:
- Online casinos – 5
- Land-based casinos – 3
- Bookmakers – 2
- Lotteries – 12 (all held by the State Lottery Company)
Tax Regime:
- For online casino operators, the tax is 4% of gross gaming revenue.
- Casinos are subject to a fixed tax: 600,000 soms (~€6,650) per gaming table and 15,000 soms (~€170) per slot machine.
- Bookmakers pay 500,000 soms (~€5,500) per betting shop.
Technical and Other Requirements:
- Certification is mandatory: Gaming equipment and specialized software can only be used if they pass a certification procedure and have a document confirming compliance with established standards. Gaming equipment and specialized software certified outside Kyrgyzstan must be verified by the authorized state standardization body.
- Casinos must be located in a hotel complex with a restaurant. The restaurant must have at least 100 seats, and the hotel must have at least 20 properly equipped rooms.
- Gambling establishments must form a mandatory reserve fund, which serves to cover potential losses and protect against possible risks. The fund size is specified in the Gambling Activities Law.
- Other requirements for officials include background checks on key individuals: possession of higher professional education, absence of a criminal record or a properly expunged record, and at least five years of overall work experience, among others.
Recent Changes:
- Permission to open casinos in hotels that are fully or partially state-owned. Even buildings that are not currently hotels but are state-owned can be converted into hotel facilities.
- Stricter ban on Kyrgyz citizens visiting casinos. If it is discovered that a citizen entered a casino or was allowed access, the casino’s license is automatically revoked. To ensure compliance, every visitor will be checked upon entry through the “Tunduk” system. This online system will determine whether a person is a Kyrgyz citizen. If they are, access is automatically denied.
Ivan Kurochkin, Partner and Head of Consulting Department at 4H Agency:
Along with legalization authorities projected billions of Kyrgyz soms in revenue from casinos, bookmakers, and slot machines. However, actual contributions to the state budget turned out to be much more modest and the actual market growth has been lower than projected.
In 2023, tax revenues from casinos, bookmakers, and totalizators amounted to only 97 million soms (~€1 mln), significantly below the initial expectations of 3 billion soms (~€33 mln). In 2024, the situation improved slightly: in the first ten months, revenues reached 232.6 million soms (~€2,5 mln), which is only 23.3% of the planned 1 billion soms (~€11 mln).
The disappointing results have drawn criticism from legislators. Last year, members of parliament expressed dissatisfaction with the minimal revenues. Concerns were raised that the casino industry brings little to no benefit to the state, is controlled by a small group of individuals, and causes significant harm. Some questioned whether the initiative had justified itself and whether casinos should be shut down altogether.
Despite the existence of a legal framework and efforts to develop the industry, the gambling market in Kyrgyzstan remains young and is developing more slowly than anticipated. Currently, the number of licensed casinos in the country remains quite limited. Kyrgyzstan may see a loosening of regulations and an increase in both local and international operators to generate higher tax revenues. How these reforms will be implemented in practice remains to be seen, but gambling in Kyrgyzstan is already undergoing significant changes, making it an intriguing market to watch.
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