Russia’s Online Sports Betting Tax Keeps Going Up

online-sports-betting-russiaSo, you’re a bookie in the European Union, and you think things are tough. It’s getting harder and harder to make a decent living, what with all of the licenses, taxes and fees that keep coming out of the woodwork. But that’s what socialist governments do, they constantly raise taxes, albeit in manageable increments so that you don’t really notice it so drastically. Kind of like the proverbial frog getting boiled on the stove. You don’t notice that you’re being boiled alive till it’s too late.

If this is your complaint, try Russia on for size. On April 20, 2016, the Russian Finance Minister Anton Siluanov announced that the government needed to capture some of the ‘grey’ market revenue that was currently going untaxed and that more taxes were in order. But why mess around with a puny increment when you can get a healthy tax increase with no real opposition? Online sports betting sales will be hit with a new 10 percent tax that goes into effect in December, 2016. As if that’s not enough, this new tax will be in addition to a recently announced sliding fee of $36,600 to $43,900. This fee is for a license to accept online wagers. But that doesn’t give a bookie license to have access to all of Russia. For that, a license must be acquired for each of Russia’s 12 economic regions. But wait, there’s more! In addition to the exorbitant license fees and the new 10 percent tax, every licensed bookie must pay $890,000 per year to Russian sports federations.

Just to make sure there’s room for more taxation revenue, the 10 percent tax seems to have been purposely written in an ambiguous manner. Since the tax doesn’t take effect until December, it gives the government plenty of time to up the ante. There’s plenty of confusion as to exactly what online betting sales means. Most observers are taking that to mean revenue while others are fearing that it will apply to online betting turnover, which would equate to a significantly larger amount of tax revenue for the government.

Most bookies in Russia feel the new tax will cause their online wagering operations to become unprofitable. They feel that the government, as is typical of most politicians everywhere, have crafted this tax with no input from the online gambling industry. Liga Stavok was the first online betting operator to receive an official sports betting license this year. The head of Liga Stavok, Oleg Zhuravsky, said that the governments’ tax demands were similar to an old Russian parable about a farmer who refused to feed his donkey but still demanded that the donkey perform labor. Zhuravsky thought that some of the larger bookmakers could get by with a 5 percent tax, but that a 2 percent tax would leave the online betting industry in a healthier condition.

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