Russia mulls legalisation of online casinos in desperate search for fresh tax revenue to fund war

Russian Finance Minister Anton Siluanov has proposed the legalisation of online casinos to Vladimir Putin as his ministry seeks new sources of revenue to plug a growing hole in the federal budget, state-affiliated business daily Kommersant reported on Tuesday.

With the Kremlin facing a massive budget deficit due to the low cost of Russian crude oil on the international market, it is thought that revenue from online gambling could add approximately 100 billion rubles (€1.1 billion) annually to state coffers, Kommersant said.

According to Siluanov, Russia would need to set up a special operator to work with online casinos and accept bets from adults over 21 through a single centralised system. The proposal also envisages a tax of at least 30% on all gambling revenue earned by licensed gambling companies, Kommersant continued. 

Online casinos are currently banned in Russia, and online gambling can only be conducted via bookmakers or betting shops. Licensed casinos can currently only be found in four specialised gambling zones in the Siberian republic of Altai, the Baltic exclave of Kaliningrad, Krasnaya Polyana outside Sochi on the Black Sea, and Artyom in the Russian Far East.

The Finance Ministry has now been under pressure for some time to create new revenue streams as the war in Ukraine enters its fifth year and Russia’s vast military expenditure proves ever harder to fund. 

As Novaya Europe reported earlier this month, options are limited to borrowing money, taking it from the dwindling National Welfare Fund or raising taxes. However, a VAT raise would raise inflation and further slow an economy already teetering on the brink of recession, potentially decreasing budget revenue even further.