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Russian Sports Betting Tax is Bad News for Bookies

The looming specter of a massive new sports betting tax has Russian bookmakers preparing for the worst.
Late last month, the Russian Finance Ministry announced the imposition of a new 10% tax on their sports betting licensees. Poor performing bookmakers will be hit even harder as the tax includes a   $2.5 million (RUB) to $3 million (RUB) (  $36,600 to $43,900 USD).
According to a report on, the new tax will go into effect on December 16, 2016. Unfortunately for Russian bookmakers and their Russian-facing counterparts, that wasn’t the only bit of bad news coming out of the Finance Ministry.
In addition to the 10% tax, sports betting operators will also have to purchase individual licenses to operate in each of Russia’s 12 economic regions. Bookmakers without all 12 licenses will only be able to take wagers from the regions they’re actually licensed in.
Also, there hasn’t been much clarification from the Russian Government as whether the tax will be based on revenue or handle.
So what’s behind the sudden, and draconian, new interest in squeezing the Russian sports betting industry for more tax revenue? According to the Finance Ministry, they’re just looking to crack down on grey market activities and make certain sports betting operators aren’t slipping through the cracks.
Unfortunately, taxing legitimate and licensed operators to the brink of extinction is more likely to encourage grey market activity than it is to limit it.
A more likely explanation is a worldwide slump in oil prices that’s left the Russian Government searching for new revenue streams to replace their once endless river of oil revenue.
Whatever the reason behind the new tax, the Russian sports betting industry is in for some big changes by the end of the year.