Russia bans payments to unlicensed gaming operators

Disruption is expected in Russia’s gaming market as a new legislation comes into effect that will blacklist any foreign payment provider, telecoms firms or bank who processed payments to unlicensed .com companies.

The new restrictions were adopted through amendments to the existing Gambling Law. While no administrative liability has yet been for institutions that violate the new rules, a draft law covering potential penalties has already been submitted to the Duma.

This is the latest attempt by Russia to control the online market, having failed to individually block operators available to Russian citizens – many of whom use VPNs.

Currently all foreign banks and foreign payment service providers found to have violated the law will first be added to a blacklist. They will then have to renounce the incriminating activity and apply for their name to be withdrawn and continue to operate in the Russian market.

The legal team at Baker McKenzie advised firms to double check the addressees of all payments against a list of unlicensed and licensed entities compiled by the Federal Tax Service and to “track amendments to the legislation regarding imposing administrative responsibility for any violation of the restrictions.”

The restrictions are aimed principally at combating organised and illegal gambling and lotteries, including online. The country liberalised gambling for the first time as soon as the Soviet Union fell in 1989, but has more recently returned to a prohibited position especially when it comes to online gambling operating from abroad.