Russia proposes further curbs to playing with international online gambling sites

russia-online-gambling-payment-blockingRussia is proposing further steps to choke off the flow of money to unauthorized international online gambling sites.

Last week, a Ministry of Finance representative told business daily Kommersant that amendments had been proposed to the country’s 115-FZ legislation, which prohibits financial institutions from processing transactions associated with illicit activities, including terrorism and non-approved gambling operators. Russia already has plans to process all transactions with licensed online sports betting operators through a central channel.

Konstantin Makarov, president of the Russian Bookmakers Association, told that the specifics of the proposal weren’t yet clear but appeared to apply only to Russia-based financial institutions. As such, Makarov believes the proposal would have little effect if punters chose to route funds through international online financial channels.

Oreg Zhuravsky, who heads up the First Self-Regulatory Organization of Russian Bookmakers, acknowledged that technical workarounds can usually be found to circumvent such obstructions. Regardless, Zhuravsky expressed a more positive view of the proposed changes, saying they could reduce business with international sites to just 5% or 10% of its current state, although he cautioned that the proposal was a long way from becoming law.

In February, Russia’s internet watchdog Roskomnadzor began investigating ways to block access to international online gambling sites. While the necessary legislation has yet to pass, the Ministry of Finance rep told Kommersant that payment blocking was a necessary complement to the IP-blocking strategy.

Russian-facing online gambling operators took hope from a report this summer that the government was considering adding online poker to its current sports betting-only regime. However, there’s been no further news on this matter, making it unclear whether these latest proposals represent a desire to purge the market ahead of some new formal licensing regime or just a continuation of the government’s traditional anti-gambling stance.

Meanwhile, Russia has reportedly backed off its plan to require licensed online bookies to pay a fee to organizers of sporting events for the right to use the official event names in promoting wagering options. Betting operators had voiced opposition to the plan after it was announced this summer, particularly because the proposal called for the state to collect an unspecified sum from operators in the event they didn’t strike individual deals with event organizers.

Kommersant also reported that Russia’s central bank was cracking down on binary options brokers who use retail terminals that the authorities claim are slot machines in disguise. These machines, which are labeled as exchange terminals and purport to offer trading on binary options and financial derivatives, also offer interactive games with decidedly non-financial names like ‘crazy monkey lottery.’

The financial firms claim the machines’ slot-like depictions are simply a ‘vivid illustration’ of the investor/punter’s financial wager but the central bank isn’t buying it. Binary options trading is not yet covered under Russia’s existing finance laws, but casino-style electronic gambling is illegal outside of Russia’s designated gaming zones, and the police have been asked to investigate.