BUSINESS

Russia cuts bookmakers another break on sports betting tax

TAGs: Russia

russia-sports-betting-taxRussia’s licensed sports betting operators are breathing a little easier after the government proposed further reductions to their mandatory contributions to the nation’s sports bodies.

In March, Russia announced that licensed bookmakers would be required to kick back 5% of their sports betting revenue to national sports federations, with a minimum quarterly payment of RUB 15m (US $232k). Last month, the Ministry of Finance announced that this requirement would be dialed back to 3%.

This week, the Ministry of Finance further reduced this mandatory contribution to 1% of online and land-based betting revenue. The reduction reportedly came following widespread appeals from betting operators, who are already struggling to absorb a host of new taxes and heightened regulatory fees.

Russian bookies celebrated the news in typically muted terms. Bingo Boom CEO Konstantin Makarov said the 1% sports tax was still a significant sum but believes the industry can absorb it.

Darina Denisov, president of the Bookmakers Self-Regulatory Organization (SRO), also welcomed the reduction but stressed that the government needs to consult with the bookmaking industry in the future before throwing out “extreme” tax proposals that cause such turmoil.

Nikolai Oganezov, the former president of the Bookmakers SRO, told Bookmaker Ratings that “you can, of course, to some extent, be happy that the Ministry of Finance took the side of reality,” but Oganezov said the 1% tax “must be viewed in the totality of all taxes.”

Those taxes include a new 10% slice of online sports betting revenue and a 100x rise in online betting duties in each region of Russia in which bookmakers choose to operate.

On November 2, the Russian Duma approved the first reading of the new sports legislation – which still contains the original 5% bookmaker tax. The Ministry of Finance’s revised rate is expected to be incorporated into future drafts of the legislation but Makarov wondered why the government couldn’t get on the same page instead of making bookies fight this battle on two fronts.

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