Russian Republic Legalizes Internet Gaming

16 March 1999
A Russian law firm called John Tiner & Partners reports that it has drafted a law legalizing Internet gaming in the Republic of Kalmykia, a member republic of the Russian Federation. According to the firm, the legislation was passed on March 9, 1999 by the parliament of Kalmykia and is the first known law in Russia to recognize Internet casinos.

Within the framework of the federal legislation of the Russian Federation on regulation of gambling business, the Kalmykian law provides "favorable conditions for gambling business emanating from the Republic, in particular, guaranteeing low tax rates for local gambling businesses (maybe as low as 3.33 percent of gross earnings)."

Internet gambling licenses are reportedly already available to both Russian and foreign companies. The law provides that the licenses are valid worldwide, mindful of the international character of global computer networks. It is specifically pointed out in the law that, to obtain the license, the licensee need not maintain the gambling site with a Russian Internet provider--it can be maintained with any provider.

Those looking for Internet gambling licenses can obtain one by ad-hoc registration (and since they carry out activity outside Russia, thereby not entailing any Russian tax liability) or pay the Russian tax and enjoy the low rates available in Kalmykia. Either way, the cost of the service will not exceed US$10,000.

Established as republic in 1935, Kalmykia is located in southwestern Russia on the Caspian sea.

John Tiner & Partners has been a legal consultant to the Government of Kalmykia for over three years.