Internet casinos relocated to Europe
Since the year began, some Internet payment systems have refused to process transactions of Russia-based Interned casinos. Such actions result from the legislative prohibition of online gambling effective from January 1st. However, market participants found a way to keep their business going by relocating it from RuNet to the .com area.
As of late 2006, market participants claim, there were 10-15 Internet casinos registered in Russia, which paid taxes. But all in all there were about 1.5 thousand gambling websites, 40% of which provided services for the Russian-speaking population. Experts estimate that the turnover of online gambling in Russia constituted about $1bn a year. On winning in an online casino, a gambler may gain quite a real amount: the money will be transferred to the gambler’s credit card or to their personal bank account.
The provision banning gambling in the Russian sector of the Internet appeared in the presidential version of the legislation on regulating gaming business. Whereas online gambling is not banned in most countries, the majority of Internet casinos are registered in offshore areas with the special jurisdiction for online gaming which lets the state get revenues and secures gamblers.
Since the law “On state regulation of activities involved in gambling organization and arrangement and on amending some of the RF legislative regulations” came into effect on January 1st, it has been forbidden to arrange gambling in RuNet. Though the law does not provide for punitive sanctions against payment systems via which gamblers used to pay for their activities. Evgeniya Zavalishina, general director of “YandexMoney”, says that “Yandex” stopped accepting payments for Internet casinos as soon as the law came into effect. “The law unambiguously states that any kind of gambling in the Russian Internet is forbidden from January 1st. As this activity is illegal now, we have ceased processing transactions for such companies,” she declares.
However, market participants found a way to keep their business going. Oleg Zhuravski, a co-owner of “Shans.Ru” Internet casino, says that his company stopped operating in Russia, in the .ru zone, on relocating to the .com zone and organizing a new European company. “We have our own customer base which accompanied us to the new domain of shans777.com. For the five years, we have paid $1mln 20 thousand to our country. Now we will pay taxes not in Russia,” states Mr Zhuravski. According to him, all major online casinos did the same.
RBC Daily