International edition
September 18, 2020

Interview to Lyubov Loginova, Alsart’s Chairman of the board of directors

New ways of gambling business in Russia

(Russia).- While Russian authorities fight with gambling business, former participants are trying to find loopholes in the law and continue to “reap the fruits”, turning slots into lottery. News4Amuse interviewed Lyubov Loginova, Chairman of board of directors of Alsart group, who comments the current situation in the country.

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hat is your attitude towards stimulating lotteries?
As any kind of business, it has the right to exist, and I think it is positive. National lotteries were always clear. People have played them all times. But government took the lottery under control not long ago. The lottery law was taken a year ago. Business abroad works only within the law and budget payments are a serious non-budget source to finance the social sphere. And now, thanks to the legislation in Russia, payments to the budget are equal to 10%.

Private lotteries, which started to appear nearly a year ago, changed their name, but the essence is the same. It’s very easy: the bill validator is moved off, a jailbreak of gambling board is made and the word “loto” is put near the game’s name; then, the meters’ name is changed and the documents are prepared in order to get the certificate confirming that now it is a lottery equipment. Everything is easy.
 
Is it legal?
No, it is illegal. Any clever person understands that it is only a screen. Automat, terminal, anything with a central block of control that contains a gambling programme (even without bill validators and etc.) is a slot machine.

Federal law of Russian Federation, dated December 29, 2006, 244-FA “About government regulation of gambling activity”, article 4, clause 18, points that a slot machine is a gambling equipment (mechanical, electrical, electronic or another technical equipment) used to hold gaming with material win, which is determined at random by device inside the body of such gambling equipment without organizer of gaming or employees.  
 
There is a letter by the Ministry of Finance dated April 7, 2008, called “Activity for gambling organization”, that says that “any attempts to perform gambling equipment as lottery with the aim of resignation from governmental control by modification of slot machines is illegal”.  
 
A great amount of equipment which is suitable for operation is on the warehouses. The simplest decision for operators is to make it from a lottery equipment. But it is not enough, because you also should have a certificate confirming the absence of UO (undeclared opportunities) for using lottery equipment. Presenting the old certificate carries the determination of this equipment as gambling (according to the Decree of Ministry of Finance of Russian Federation dated to August 9, 2004 N 66n, "About forms and terms of audit’s presenting about lotteries and methodology of lotteries’ holding”.

Is there any state control of the lottery and the equipment to set the standards? 
Yes, sure. There is already a Decree of Federal Tax Service, dated May 8, 2009: “About strengthening of control for observing by organizers of gaming demands for gambling establishments”.  I also know the existence of a decree to control agencies in the shortest terms to work out regulations of lottery equipment’s certification. Requirements for certification will allow the separation of real lottery equipment from attempts to draw a veil over gambling business at once. It will quickly nip in the bud all the attemps to earn money on existing park of automats and make lottery business clear and gambling move to the zones.   
  
What recommendation can you give to operators of gambling business?
First of all, I’d like to warn them against the change of slot halls into lottery, as a stimulating lottery.  It first seems the simplest and most efective solution, but you are in risk to have penalties, seizure of equipment and a charge on tax evasion, according to the Tax Code of the Russian Federation, article 264, clause 4   
 
Which perspectives does the lottery business have? 
Lottery is part of peoples’ everyday life. Lottery business in Russia today is practically not developed (nearly 1% play lotteries), but despite that, many experts predict that, in future, this segment can reach 6%. It is necessary to improve a state control system. At the same time, regulation must provide control with market turnover. Then, the state can practically collect taxes entirely and get non-budget sources for financing and the management of a social program.

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