Russian Poker Heavyweight Urges State To Put Players Over Profits

A Russian poker executive has called on lawmakers mulling reform in his homeland to give equal consideration to player protection and potentially large tax benefits.

The former head of the Russian Poker Federation and International Federation of Poker (IFP) board member Dmitry Lesnoy said he feared regulation would focus entirely on reaping cash over promoting fair play.

Russia’s Ministry of Finance has confirmed it is weighing up the benefits of legalising online poker, and with two new gambling zones announced players believe poker rooms, outlawed since 2009, could also return.

Lesnoy, who now runs poker schools in Cyprus and writes about gambling, told GamblingCompliance: “The government estimated that the income from this activity could amount to hundreds of millions of dollars a year.

“And it really could, considering that according to the largest poker operators, Russia ranks second after the US in the number of customers playing online.
“But it is important that this regulation takes care of its citizens, and not only of the treasury.”

The Russian Poker Federation was abolished in 2010 following a 2009 court order which removed the game from the list of activities operating under licence by sports regulators.

Five years after the ban, President Vladimir Putin’s government is considering legalising online poker again, amid estimates it could earn 5bn rubles ($146m) a year for the federal budget.

A new bookmakers association was recently formed to oversee betting and bookmaking in the country as Putin’s hard-line stance appears to be mellowing.

First Deputy Prime Minister Igor Shuvalov asked the finance, economic development and justice ministries to research the possibility, but despite a deadline of July 21 reported in Russian media, there has been no update.

Deputy finance minister Alexei Moiseev confirmed that his ministry is looking into the issue but declined to comment on its position.

In 2007 poker was officially recognised as a sport in Russia, in a vain attempt to stave off restrictions on casino gambling.

However, Lesnoy said the activity was driven underground and into the arms of criminal gangs following the 2009 ban, and unregulated online operators began to exploit the space and target Russian custom.

He said several years of research and a software package developed by the poker federation aimed at bringing order to a complex system was “instantly” wiped out.

“It is no secret that since the ban poker in Russia went into hiding,” he said.
“But in clandestine places it is impossible to check on the honesty of those hosting games, and affected players have nowhere to complain.
“It’s the same with online poker.
“The players cannot understand it; regulation of an activity is to protect them from harm, but the state seemingly does not have any other way to act than to prohibit.”

He also called on the government to not freeze out players or professionals and to bring them back into the fold to help draw up safe legislation.

“You’ve got to make note that the Russian law (as opposed to European) does not distinguish between games of skill and games of chance,” he said.
“We need to create an expert group and carefully study this issue to take into account the interests of all stakeholders and I very much hope that the government is wise in this matter and the new law will be better than the previous.”

Russian Deputy Prime Minister Dmitry Kozak, currently the subject of sanctions from the US and Europe over his role in developing the annexed region of Crimea, said he expected Sochi to open as a gambling zone in the spring or early summer of 2015.

Kozak said at a news conference in Moscow: “This zone may start working at the beginning of next year, or to be more precise, at the start of the next resort season, in May or June.

“The Krasnodar territorial administration is currently preparing the necessary proposals.
“The infrastructure necessary for the organisation of such a zone was built during the preparations for the Olympic Games, and everything can be arranged quickly enough. There is no need to build anything new.”

Lesnoy said the recognition of Sochi and Crimea as gambling zones would be a “major step” towards widespread acceptance of gambling, and help clean up the reputation of the activity.

Sergey Naumkin, a Russian gambling lawyer, told GamblingCompliance the speed at which the government was moving had surprised many, but he did not expect any legislative changes or announcements regarding Russia to appear until September when the parliament resumed.