Russian Lawmakers Propose a New Blacklist for Online Gambling Websites
Russian lawmakers are reconsidering legislation to require banks and financial institutions to block transactions involving blacklisted online gambling websites. According to the RBC.ru news website, the new law would create a register of banned sites.
Under the auspices of the Federal Task Service, the register would be distributed to all Russian local payment processors. These processors then would be ordered to block transactions from those online domains.
Enforcement Similar to the UIGEA
The system being proposed is quite similar to that used by authorities in the United States to enforce provisions of its Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. The UIGEA targeted payment processors and others who supported online gambling.
Using that system, payment processors like Neteller and Skrill (Moneybookers at the time) left the United States online gambling market. Software developers like Microgaming, Playtech, Cryptologic, and IGT also left the US market.
Illegal Online Gambling Sites
Not everyone stopped operations. Publicly-traded companies on the London Stock Exchange chose to leave US operations, because they were easier to target and had to maintain legal operations. Private companies which could be headquartered in tiny Caribbean islands or in Central America chose to remain in the United States market.
In certain instances, those who thought they were safe were not. PokerStars and FullTilt Poker continued US operations, only to have their domains seized in 2011. Bodog had periodic troubles with US authorities, until eventually the Bodog domain was seized (giving rise to its replacement, Bovada).
Online Gambling in the Russian Federation
If the new laws go into effect in the Russian Federation, one can expect a similar cat-and-mouse game between the unlicensed operators and government officials. Those who wish to be considered legitimate business ventures in Russia would have to toe the line, while bankers and financial institutions would be caught in the middle.
Those familiar with Russian politics say the new proposed crackdown is being masterminded by Vladimir Putin, who wants to drive Russian gamblers away from online gambling and in the direction of his new brick-and-mortar casino industry, especially the Socchi-area land-based casinos.
2009 Ban on Land Casinos
In 2009, Vladimir Putin banned the Moscow casinos, as well as land-based casinos throughout most of the rest of the Russian Federation. Four far-flung special administrative gaming zone were set up where gambling resorts could be developed. This would make casino gambling a luxury for the rich and well-traveled.
Because of that ban on brick-and-mortar casino gambling, Russians in the big cities turned to online gambling. Operators in the online casino, poker, and sports betting arenas often changed domains or used proxy servers to fool government officials. Domains had to be changed frequently, to stay ahead of law enforcement.
Using Financial Institutions to End Online Gambling
Enforcing anti-online gambling laws is hard for regulators and law enforcement, which is why the Russian officials want to use financial institutions to do the heavy lifting. If the customers of illegal operators cannot deposit and withdraw money from banks, their business model dries up.
Another reason for the crackdown is the desire of Russian officials to bar illegal international online gambling operators. Top UK and Gibraltar-based companies have seen their names appear on previous blacklists. The names often seem arbitrary, because some top legit online casinos are banned, while others are not.
$3 Billion Spent on Non-Russian Websites
According to government agencies, Russian players spend approximately $3 billion on international gambling websites. The Putin administration would like to see that $3 billion spent inside Russia, one way or the other.
The latest proposed laws are like those proposed by the Russian Duma in 2015. That set of proposals eventually failed to carry a vote in the Duma, after a variety of Russian governmental agencies expressed displeasure with the measures.