Russians to Block Online Gambling Payment Processors

A new online gambling payment portal is being established in Russia which will make it impossible for players to fund accounts with illegal operators.

At the end of 2013, Russian authorities introduced tough new penalties for those organising or engaged in illegal gambling. Any form of gambling is illegal outside of four (soon to be six) designated areas in Russia, although a new regulated sports betting market will be place by the summer.

The regulated market will require that operators are licensed in order to eliminate fraud and protect players´ funds. Licensed operators will be required to deposit 30 million roubles ($460,000) in a safety fund and undergo regular licensing compliance checks.

To protect the interests of the licensed operators – and to eliminate illegal gambling in Russia – measures are being put in place to channel payments to licensed operators through an exclusive online portal, with payments to and from all other illegal operations being blocked by Russia´s digital watchdogs.

The Self-Regulatory Organisation of Russian Bookmakers

In preparation for the regulated sport betting market, the Self-Regulatory Organisation of Russian Bookmakers was established in December. The organisation intends to fight against illegal betting websites by applying international law and the organisation´s president – Oleg Zhuravsky – expects the first lawsuits to be filed in the next few months.

Zhuravsky says that the organisation will be going after large, publicly traded firms rather than smaller operators and is relying on the decisions of foreign courts to stop illegal online gambling in Russia. This could have serious consequences for online poker sites such as PokerStars, 888Poker and Party Poker who have a significant database of Russian players.

Zhuravsky claims that eleven of the twenty-seven companies currently authorised in Russia to operate as sports betting bookmakers are represented in the organisation – each of who have fulfilled the licensing requirements to offer online sports betting when the regulated market goes live in June. He expects the others to join once the licensing regulations are met.

How Russia will Block Payments to Illegal Sites

According to Yury Fedorov – the president of Russia´s National Association of Bookmakers – once the regulated sports betting market goes live, all payments to and from the licensed operators will be channelled through the Self-Regulatory Organisation of Russian Bookmakers via an online portal.

By centralising payment processing through one legal portal, the Roskomnadzor will be able to identify any transactions with unsanctioned operators and block them. Russian banks and other payment processors would also be ordered to stop facilitating payments to online gambling sites that are not included in the Self-Regulatory Organisation of Russian Bookmakers.

The consequence of this channelled payment processing method is that it should stop all transactions between players and online gambling sites that are not licensed. It is not yet clear how this new payment system would be applied in the six areas of Russia that allow gambling, or whether it will be applied at all and all unregulated online gambling would be prohibited.

No Comment (yet) from PokerStars

PokerStars is likely to be the largest online gambling site to hit by the block on online gambling payments but is yet to make a comment on the new developments in Russia. According to a statement made by the company after the Roskomnadzor ordered Russia ISPs to block access to the site last year;

We are aware of the recent situation in Russia. At this time we do not believe this changes our ability to offer services to Russian players. As such our operations continue as usual….Our terms and conditions make it clear that our services are not for use in jurisdictions where it is illegal to do so, but the measures taken by Roskomnadzor, and the resulting action with the Common Registry of Banned Websites that prevents access to our PokerStars.com website, does not affect [the] ability to continue playing at PokerStars.

We wait for further news from the world´s largest online poker site.