Russia mired in illegal gambling ahead of World Cup

Business News

At least a billion dollars a year are believed to be pouring into offshore accounts of Russian shell companies linked to just one semi-legal but blossoming industry: online gambling.

This poses a new challenge for Russia as it prepares to host the World Cup in June and July – the country has already been plagued for decades by allegations of match-fixing in its domestic football.

No one expects illicit betting to play a role on the pitch when football’s most celebrated competition kicks off in 100 days.

But it represents another dark corner of Russia’s economy that the authorities have struggled to police.

“The total turnover volume of the legal and offshore online bookmaking market is more than two billion dollars (1.6 billion euros) a year,” Anton Rozhkovsky, the director of the government-mandated TsUPIS online betting payment system, told AFP.

“We do not pretend to know if the actual figure is $2.5 billion or $4 billion,” said Rozhkovsky.

“Around 70 percent of that is illegal, offshore business.”

Pent-up demand for organized gambling was unleashed with the collapse of the Soviet Union and led to glitzy casinos and seedy slot machine halls opening across Russia.

They skirted paying taxes but were not strictly illegal.

The government tried to impose order by shutting them all down in 2009 and allowing bookies to open sport betting shops that instantly gravitated toward football. improved internet access pushed most of these punters online and produced a legal vacuum filled by scores of anonymous websites with no licenses but burgeoning business.

Russia’s Bookmakers Rating gambling analysis centre pegged the entire industry’s annual turnover at $11.8 billion in May 2017, 65 percent of it made in illegal online bets. It also expected the market to triple in the next five years thanks to high-profile events such as the World Cup.

“We expect colossal interest in the World Cup,” Alena Sheyanova, spokeswoman for the legally registered bookmaker Leon, told AFP.

“The legal online betting industry is developing at phenomenal rates.”

TsUPIS took its first registered bet in February 2016 and is servicing 15 authorized bookmakers.

One of these is an established Austrian brand that jumped through the hoops to obtain a license last year.But popular Irish and British bookies do not take Russian bets and the other 14 bookmakers are local start-ups.