Renewed Optimism for Regulated Online Poker in Russia

Reports coming out of Russia suggest that the authorities could re-classify poker as a game of skill and regulate online poker to generate tax revenues.

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RussiaReports coming out of Russia suggest that the authorities could re-classify poker as a game of skill and regulate online poker to generate tax revenues.

A strict interpretation of Bill 478806-6 introduced last December implies that it is illegal for any non-state sanctioned operator to provide an online service, and players caught engaging in the odd game of NL Texas Hold´em outside of Russia´s six designated gambling zones can be sentenced to up to 240 hours of community service.

Because the law is impractical and impossible to police, further laws have been introduced that stipulate gaming servers must be located within Russia, and the Russian Supreme Court recently ruled that Internet Service Providers can be held liable if their subscribers use the service to access “offshore” gambling sites such as PokerStars, 888Poker and Party Poker.

A Wind of Change Driven by Revenues

Prior to 2009, the authorities in Russia had a pretty liberal opinion of poker. In 2007, the Russian Federal Sports Agency declared that not only should poker be considered a game of skill, but also a sport. Casinos started using poker as front for their illegal activities and a crackdown ensued – limiting “legal” games of live poker to remote designated gambling zones.

However, with a crumbling economy and players continuing to play online poker through proxy servers, President Putin commissioned a study last month to examine how much money the state could raise if it were to regulate online poker in Russia and tax it. The study found that a regulated online poker market would generate between 2 and 3 billion rubles ($30 million to $45 million).

Poker Back as a Game of Skill

In order to regulate online poker in Russia, poker would have to be reclassified as a game of skill and it looks as though Russian political thinking is heading in that direction. According to the Russian news, Russian Deputy Prime Minister Igor Shuvalov agreed in principle at a meeting discussing poker regulation that poker is not gambling and that the law prohibiting it should be amended.

Another Russian news agency – Itar-Tass – has reported that Shuvalov has been discussing the issue of poker regulation with the relevant government departments, but is still to make a decision on poker regulation one way or the other. The agency claims that the Deputy Prime Minister has given no instructions beyond ordering the government departments to submit their legal assessments of what is gambling and what is not.

Haven´t We Been Here Before?

Regular readers of would be justified in having a sense of déjà vu. Last September we reported that proposals for the regulation of online poker in Russia were being considered by the Russian Finance Ministry that would re-classify online poker as an intellectual and commercial game, enabling the ministry to tax operators 20% on their Gross Gaming Revenues and tax players 13% on their withdrawals.

Sadly, nothing ever came of these proposals – in fact subsequent events made it more difficult for players to get online. However, with the state´s decreasing tax revenues and pressure being put on the government to relax the laws relating to all forms of gambling, there is renewed optimism for regulated online poker in Russia.

Hopefully this time around the authorities will see the sense in regulation and eliminate years of uncertainty and unenforceable laws.