Russia to hike bookmakers’ sports kickbacks by ‘at least twice’


Russia’s sports betting operators are bracing for another tax hike that could squeeze some smaller bookmakers out of the picture.

On Tuesday, Interfax reported on a discussion between Russian President Vladimir Putin and Finance Minister Anton Siluanov during a recent meeting of the presidential council for the development of physical culture and sports.

Siluanov reportedly detailed the financial performances of Russian-licensed bookmakers in 2019, during which the minister claimed the bookies had collectively generated profits of RUB30b (US$383.2m).

The bookmakers reportedly kicked back RUB1.2b in required payments to Russian sports – at a current rate of 5% of revenue generated from each sport, payable on a quarterly basis to that sport’s federation – while paying taxes to the state of just RUB770m.

Siluanov then suggested bookmakers could be further squeezed to provide “additional resources” to fund local sports, possibly boosting the current contribution rate by “at least twice.” To which Putin reportedly replied, “I completely agree with your proposals. Please arrange them accordingly.”

While some Russian-licensed bookies are reportedly okay with Putin’s view of the field, others are suggesting any increase in sports kickbacks would unfairly punish smaller operators, many of which didn’t enjoy the stellar gains the big boys reported last year.

As of last week, Russia has 21 licensed online bookmakers, but the market is dominated by a handful at the top, including Fonbet, which Interfax claims generated a profit of RUB19.4b last year – nearly two-thirds of the overall market tally.

The situation is further compounded by the fact that the COVID-19 suspension of major sports did serious damage to Russian bookmakers’ bottom lines, a hole from which they are only beginning to emerge. Some smaller operators, such as (no affiliation with the UK-listed 888 Holdings), halted operations entirely during the pandemic and have yet to return.

Ironically, the bookmakers’ post-pandemic eagerness to get back into the game may have convinced their government to squeeze them harder. This summer saw a sports sponsorship bidding war, while bookmakers just signed around RUB4b worth of advertising contracts with sports broadcaster Match TV. Hard to cry poor while spending like drunken sailors.