Russian bookmakers against tax measure
The Finance Ministry seeks new tax that would support the development of sports.
Russia.- As Russia seeks new gambling amendment to increase the amount of revenues received by the licensed sports betting industry, bookmakers have threatened to leave the market. Since earlier this year, the Finance Ministry has debated on several projects to increase sports betting’s contribution in the development of sports industry.
Recently, the government has introduced new amendments to set the sports betting tax in 3 percent once a quarter. Although the first proposal was of 5 percent, bookmakers have expressed their opposition to the project. Under the new legislation, Russian government sought to receive an annual contribution of, at least, US$1 million per company.
The original amendment would force bookmakers to contribute with no less than US$241,000 to local sports bodies. However, the new proposal drops the tax to 3 percent and the revenues would be destined to the federal budget, according to the Russian Finance Ministry. Bookmakers are worried that the tax measures would not generate profits for the companies.
The chairman of the First Self-Regulatory Organization of Betting Companies, Oleg Zhuravsky, commented that as an average profitability of a bookmaker amounts to 5 to 7 percent of bets it takes, the tax would reduce their profits to half. “This tax may be considered burdensome, I would even call it oppressive. If the Finance Ministry proposals remain in their current form, many companies with low profitability will leave the market,” added the Chairman of the Self-Regulatory Organization Association of bookmakers Nikolai Oganezov.