New variant of gambling business

While the authorities fight with gambling business former participants are trying to find the loopholes in the law and continue to “reap the fruits” turning into slot machines to lottery.        

       
We’ve asked to comment the situation the Chairman of board of directors (Alsart group) Lyubov Loginova and know if it is really effective decision at present.

News4Amuse (N4A): Lyubov, what is your attitude to stimulating lotteries?
Lyubov Loginova (L.L.): As any kind of business it has right for life and I attitude to them positively. National lotteries were always clear. People played them all the times. But government took the lottery under control not long ago. The law “About lotteries” was taken a year ago. Abroad business works only within the law and payments to the budget are serious non-budget source for financing of social sphere. And now thanks to the legislation in Russia payments to the budget are equal to 10%.

Another question is private stimulating lotteries which start to appear nearly year ago as a new decision for screen of gambling business. The name was changes, essence is the same. In fact, now is going the “signboard’s change” of gambling to lottery.   


It’s very easy: bill validator is moved off, make jailbreak of gambling board and put the word “loto” near the game’s name, after the meters’ name is changed and the documents are prepared for getting the certificate confirming that now it is a lottery equipment. Everything is easy.
 
N4A:  Is it lawfully?
L.L.: Illegally. Any clever person understands that it is only screen.  Automat, terminal, anything which has the central block of control and containing gambling programme (even without bill validators and etc.) is a slot machine!

Federal law of Russian Federation dated to December 29, 2006, 244-FA “About government regulation of gambling activity”, article 4, clause 18
Slot machine is a gambling equipment (mechanical, electrical, electronic or another technical equipment) using for holding 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 of Ministry of Finance dated to April 7, 2008 № 05-03-08/19  “Activity for gambling organization” is said that “any attempts to perform gambling equipment as lottery with the aim of resignation from governmental control by modification of slot machines is illegal”.   
 
Great amount of equipment which is suitable for operation is on the warehouses. The most simple decision for operators is to make from it lottery equipment.  


But to remake is not enough, you also should have a certificate confirming absence of UO (undeclared opportunities) for using lottery equipment. Presenting the old certificate carries determination 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”.

N4A: Is there any control from the state for complains with lottery and lottery equipment to the set standards?  
L.L.:  Yes, sure. There is already the Decree of Federal Tax Service dated to May 8, 2009 № ММ-7-2/280 “About strengthening of control for observing by organizers of gaming demands for gambling establishments”.  


Also I know about existing of Decree to control agencies in the shortest terms to work out regulations of lottery equipment’s certification.


Requirements for certification will be so that let separate  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.    
   
N4A: What recommendation can you give to operators of gambling business?
L.L.: First of all I’d like to warn against remake slot halls to lottery one like a stimulating lottery.  It prima facie seems the most simple and eefective solution but it threatens with penalties, evacuation of equipment and charge with tax evasion.  


The Tax Code of Russian Federation, article 264 clause 4    
 
 N4A: Which perspectives the lottery business has?  
L.L.: Lotteries it is a part of everyday life of people. In spite of lottery business today in Russia practically is not developed (nearly 1% play lotteries) many experts predict that in future this segment can reach 6%. It is necessary to improve system of state control. 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 realization of social programme.
 
News4Amuse