Following suit – Russia’s ban on Online gaming becomes counterproductive

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Despite Russia’s ban on online poker, some 16 percent of its citizens are regular players. As

enforcing the ban becomes increasingly counterproductive, lawmakers are poised to classify the

game as more skill than chance.

 

The distinction between ‘skill’ and ‘chance’ is commonly tossed around by policy makers as the

reason for regulatory changes, and just as often used to justify a far less arbitrary decision.

We’ve seen it across the US in recent months, as state legislators seek fiscal gains from the

booming daily fantasy sports sector. This month, Russians lawmakers have adopted the same

approach, with hints that poker might be deemed more a game of skill, and therefore fit for

public consumption.

While Kremlin officials are hardly famed for a strict correlation between words and deeds, there

a number of reasons these gestures should be believed. As whimsical as the skill-chance

distinction may appear to an outsider, the realpolitik it stands in for should give the poker

industry more optimism.

In one sense the Kremlin is merely joining a global trend towards considering poker more skill

than chance. As former New York Senator Alfonse D’Amato wrote in 2011: “Congress knows

that poker is a game of skill. And Congress knows that, since poker is a game of skill that is

legal in the home, it should be legal to play it online.”

This hasn’t been acknowledged across the board, but as statesmen mull over the holes in their

spending plans, several are now using the distinction to justify the legalisation of poker. The

need for the Russian government to supplement its revenue streams in this way could not be

more pronounced. Already in the throes of economic recession, plummeting oil prices have hit

Russia especially hard.

“In my opinion, conceptually the decision to legalize online poker has been already made by the

Russian government,” Alexander Zakondyrin, a Moscow politician and lawyer told Business

Insider. “In the crisis situation, low oil prices and sanctions against Russia, which excludes the

use of foreign debt markets, Russia’s budget needs additional income. Russians play poker, but

their money goes abroad.”

Throwing money at a crusade against online poker appears more futile by the day. A recent poll

by the All-Russia Public Opinion Research Center, suggests as much as 16 percent of the adult

population – some 20 million citizens – regularly play the game online. Despite online poker

being legal in Canada, UK, Germany, France, Spain and several US states, PokerStars reports

that 8.4 percent of its players are Russians, playing illegally.

As Pavel Sychyov, a member of Russia’s Kremlin-appointed Civic Chamber, said recently: “We

are trying to counteract the illegal online gambling, but we understand that it is very difficult to

control the Internet in principle,” adding that Russia’s current ban on poker was merely pushing

that activity underground.

It seems the state is fighting a losing battle against poker. Not only missing out on much needed

tax receipts, but also failing to quash the industry and pushing it proceeds further abroad and

deeper underground. It may become of a case of ‘if you can’t beat ‘em, join ‘em.’

Analysis

Banning online poker is hardly deterring players, indeed the legislation criminalises huge

swathes of the population, encouraging them to adopt the same internet cloaking devices that

someone might use to buy drugs or weapons. In recent months the Kremlin has moved to ban

the use of these too, but will continue to struggle to keep up with the fluidity of online innovation.

As with prohibition in 1920s America, pushing industries underground has the side effect of

making illegal organisations extremely wealthy, and in some cases dangerously powerful. The

economic realities of the Great Depression put an end to that policy, and now tax on alcohol

contributes around $10bn a year to the state coffers. The parallels with Russia’s position need

not be laboured and it is likely the Kremlin will soon follow suit.


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