The Russian authorities are fighting online casinos and lotteries that are not conducted in accordance with Russian law: banks and payment agents will be prohibited from transferring money from Russians to their organizers under threat of punishment. The corresponding bill of the Ministry of Finance was approved by the government commission on legislative activity, two participants in the meeting told RBK (the government did not announce this). Although gambling on the Internet was prohibited by federal law back in 2006, and since 2014 Roskomnadzor has been adding online casinos to the register of prohibited sites, users cannot be punished for playing, and it is impossible to close many of these sites - their operators are registered in offshore zones. The shadow turnover of the online casino market in Russia can be estimated at at least $3 billion, according to Alexey Antonov, an analyst at Alor Group of Companies, to RBK. Money of dubious origin is often laundered through virtual casinos, employees of the compliance services of several Russian banks told RBK. Russian and foreign companies, as well as sole proprietors and individuals, including foreigners, to whom Russians have transferred, are transferring or may transfer money for gambling, will be included in special blacklists — they will be maintained by the Federal Tax Service (FTS), follows from the draft law and its explanatory note (RBK has a copy). The blacklists will be published and communicated to banks and all payment agents. They will have to refuse Russians money transfers to people and companies from these lists. It will be impossible to transfer money to companies and individuals from the blacklist of online casino operators either in cash or using bank cards or virtual wallets: according to the draft law, each payment system operator (Visa, MasterCard, Western Union, etc. — 43 names in total, as follows from the Central Bank register) will have to set a special code for such transactions, which will indicate that the recipients of the transfer are illegally organizing and conducting gambling. Following Norway's example In 2010, the Norwegian government, in an effort to combat gambling addiction, banned the country's banks from processing payments from Norwegian citizens using bank cards to physical and online casinos outside of Norway. However, foreign sites licensed in Gibraltar, Malta, Curacao, the UK, the Isle of Man, etc., are still available to most Norwegian players, accept Norwegian kroner, and allow online payment options from Norway, according to World Gambling Review. The Central Bank and the Ministry of Economic Development were against The ban on transfers will not affect licensed Russian bookmakers, which are allowed to accept sports bets online (there are only two such offices in Russia, Izvestia reported in July 2016, citing a representative of the Federal Tax Service), as well as companies involved in organizing state or international lotteries (there cannot be any others in Russia by law; international lotteries are held only on the basis of international treaties of Russia). Self-regulatory organizations of Russian bookmakers can report illegal online casinos and lotteries to the authorities so that information about them can be included in the register of prohibited ones. The bill was developed on the instructions of President Vladimir Putin dated August 12, 2015, according to the explanatory note to it. RBC was unable to find this instruction in the public domain, including on the Kremlin website. However, several public draft regulations contain references to these instructions of the president “on issues of increasing responsibility” for the illegal organization of gambling. According to the materials on the Finance Ministry website, this bill was submitted to the government at the end of 2015, but in mid-2016 it was returned for revision and re-coordinated with the Central Bank, the Federal Tax Service, the Ministry of Economic Development and the Ministry of Internal Affairs. The bill received a negative review from the Central Bank and a negative assessment from the Ministry of Economic Development, as noted in the reference to the bill, which RBC has reviewed. The arguments of the Central Bank and the Ministry of Economic Development are not made public in the reference. "The Bank of Russia has approved the bill for adoption in the first reading, while expressing a number of comments that may be taken into account when preparing the bill for the second reading," the Central Bank's press service told RBC, without explaining what these comments were. The Bank of Russia "really does not like such blanket bans" - banks already have a lot of work to control payments, the regulator should check all this work and be responsible for it, says an employee of the compliance service of a Russian bank from the top 30. The Ministry of Economic Development did indeed initially give a negative opinion on the project, confirms a source close to the ministry, but during the discussion of the document, the Ministry of Finance explained its position, and its arguments were accepted - now, according to the source, there are no disagreements on the bill. A representative of the Ministry of Economic Development and the press service of the Federal Tax Service did not respond to RBC's request. Roskomnadzor against casinos Roskomnadzor blocks online casino sites at the request of the Federal Tax Service. Since November 2015, more than 22.2 thousand sites or page pointers have been added to the Unified Register of Prohibited Gambling Sites, of which 16.9 thousand have restricted access in Russia, while the rest have had illegal information removed or restricted access by the hosting provider, the press service of Roskomnadzor told RBK. In July 2016, the QIWI and Skrill payment services were added to the Unified Register. “Links to prohibited online casinos are posted on individual pages of the QIWI and Skrill payment systems. In addition, the ability to accept payments for gambling has been implemented,” a representative of the regulator explained. The services promptly complied with all the requirements and were removed from the register a few days later. Money Laundering Scheme A server for an online casino can be placed anywhere and remain out of reach of the authorities — as a result, many such sites have appeared, one of the businessmen, who was previously involved in the gambling business, told RBK. In Russia, online casinos are mostly closely linked to bookmakers, poker rooms, gambling sites, pawnshops and online sports betting resources, where they may offer to try gambling in a veiled form, says Alexey Antonov, an analyst at Alor Group. Such sites are actively advertised, for example, through file-sharing resources, as well as through sites for watching movies online. “It is also widely known to own an online casino through an offshore license from such countries and territories as Curacao, Malta, and Gibraltar,” says Antonov. Lavrenty Gubin, Marketing and PR Director at Storm International (which develops offline casinos in several countries around the world), believes that the large number of online gambling sites is due to the fact that minimal investment is required to open them. “But it is incorrect to call such sites casinos, because they do not have the appropriate license and are often scammers,” he says. For example, to obtain a license to operate in the European Union, an online casino must pay a fee of several tens of thousands of euros and obtain permission from a commission that takes into account sources of funding, the owner's criminal past, the software that the site intends to use, etc. The same commission monitors whether the online casino pays out winnings and does not launder money, Gubin said. For banks, a ban on making payments to online casinos will be an additional burden, two employees of the compliance services of Russian banks from the top 50 by asset size told RBK. At the same time, the authorities' desire is understandable: money laundering with the help of casinos is a classic scheme, they admit. Dubious money is easily put into circulation and turns into either "winnings" (in collusion with the owners of the site) or into casino revenue. If before the development of computer technology, you had to go to a casino and deposit cash into the cashier, now you can pay for participation in a virtual game via the Internet, a terminal or a bank. Volcanic Fame Until 2009, the most famous brand on the Russian gambling market was the Vulcan chain of gaming clubs (owned by Oleg Boyko’s Ritzio Entertainment Group), and although the chain left the market after the casino ban in Russia, dozens of gaming platforms still operate on the Internet exploiting this brand. In recent years, the Cypriot Ritzio Purchase Limited has filed and won several complaints with the Arbitration and Mediation Center of the World Intellectual Property Organization (WIPO), challenging domain names that are confusingly similar to Ritzio’s trademarks. For example, in November 2016, WIPO arbitrators found that a certain Ukrainian, Berendey Kutko, registered the disputed domain names “for the purpose of subsequently operating an online business to profit from the reputation and popularity of the business” of Ritzio. In December 2016, Ritzio won a similar dispute at WIPO against three individuals (citizens of Ukraine, Seychelles and France) — the arbitrators ruled to transfer 13 domain names in the .com zone, referring to the Vulkan brand, to the applicant. Ritzio International currently operates physical gaming clubs in Germany, Italy, Croatia and Romania.
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