Russia Gets Tough On Unauthorized Foreign Gambling Sites

When the Russian government rolled out new rules prohibiting local banks to deal with offshore gambling sites operating without a Russian license, some banks and payment processors were hesitant to comply. Banks were told in late May that they should stop processing payments with unauthorized online gambling operators as the government tightens its gambling rules.

In late October, state-owned Sberbank had started implementing the new measure, and local punters who wanted to deposit money to their international online gambling accounts were not allowed to do so.

Russian daily newspaper Kommersant later revealed that among Russia’s major banking and financial institutions, only three were adhering to the new rules namely Tinkoff Bank, Sberbank and VTB. However, it is important to note that the three institutions did not begin to comply until the Ministry of Finance issued a reminder.

Blame Placed On FTS

Media reports claim that the banks were not really acting in bold disobedience of the new rules but were actually waiting for the Federal Tax Service (FTS) to provide them with a list of unlicensed foreign gambling sites. Apparently, the FTS wasn’t prepared enough to supply banks with the necessary records, including an official list of affiliated payment partners.

Russian Watchdog Threatens Google

Last month, Russia’s telecommunications watchdog Roscomnadzor intensified its crackdown on unapproved online gambling domains, blocking around 14,000 of them, bringing the total number of blocked domains to more than 100,000 – a significant increase from last year which saw just less than 63,000 domains being blocked.

Search engine giant Google may face a RUB700k (US$10,600) fine for failing to deal with blocked domains. Roscomnadzor issued the legal threat against Google as the blocked domains are still appearing in search results on local computers.

Google had previously refused to remove Russian-language online casino ads from YouTube, despite repeated calls from Roskomnadzor. Foreign online casino operators such as the Curacao-licensed Azino777 have been promoting itself though YouTube videos that feature Russian hip-hop stars. Some international online gambling sites are also making themselves known by placing ads on other file-sharing sites.

This prompted a number of Russian politicians to call for legislation that would penalize entertainers who allow themselves to get paid for promoting online casino sites. Duma member Edward Isakov is reportedly drafting a bill which would punish such entertainers. Russia’s central bank will instruct agents and managers to carefully verify and confirm if a certain gambling operator has local license before they decide to sign the deal.