Publication date: 13 Jun 2022
Kazakhstan is one of the largest gambling markets in Asia. Gambling regulation started here 15 years ago, since then gambling and betting have been actively developing. The main peculiarity of Kazakh casinos and betting offices’ activities can be called a low level of control over the informal sector.
Regulation of gambling and betting in Kazakhstan
In 2007, Kazakhstan adopted the Law “On Gambling Business”. According to it, casinos, bookmaker’s offices, slot machines, and sweepstakes are allowed in the republic. However, land-based organisation of gambling is limited to only two gambling zones: in Almaty region on the coast of Kapchagay reservoir and in Shchuchinskiy district of Akmola region.
At the same time, any activities of “electronic and online casinos” are officially banned in Kazakhstan.
On the other hand, bookmakers are entitled by law to operate through an “e-cashier”, i.e., to offer all betting services online legally in Kazakhstan. Kazakhstan’s gambling licence is unified with no distinction between online and land-based operations. Therefore, an online licence is only accessible to the availability of offline offices, but the document may specify an operating area of “the whole of Kazakhstan”. A bookmaker’s office and sweepstakes are two types of activities requiring different documents. There are certain requirements for payments via websites, but in general they are subject to minimal restrictions.
- Feel lazy to read?! Watch the video on our channel – How to drive traffic to gambling and betting for Kazakhstan?
What kind of gambling is allowed in Kazakhstan?
The regulatory body controlling Kazakh gambling is the Ministry of Culture and Sports of the Republic of Kazakhstan. The institution’s website contains registers of betting companies, sweepstakes and casinos that have received licenses. As of November 2021, 7 casinos (Mega Club, Astoria, Corrida Stile, Kapshagai Palace, RK Makao, Bestam Corporation, ESM Invest) and 11 gambling halls, all of which operate in the gambling zones of Kazakhstan, have received supporting documents to carry out offline activities.
State control in the field of gambling business is carried out in the form of inspection in accordance with the Law of the Republic of Kazakhstan “On State Control and Supervision in the Republic of Kazakhstan”. The Criminal Code of Kazakhstan provides for liability for organisation of illegal gambling business. Since 2011, Article 269-1 of the Criminal Code of the Republic of Kazakhstan has been in force, according to which it is not necessary to establish the amount of the illicit income derived for criminal liability.
- For example, in the summer of 2021, employees of a well-known bookmaker’s office were convicted. They were accused of violating the rules of organising gambling activities in Kazakhstan: transferring servers outside the country, introducing casino functionality on a betting site, withdrawing cash and converting the national currency. As a result, 11 defendants were found guilty and received from 5 to 8.5 years in prison. The property of the defendants was confiscated, and the state was paid 95 billion tenge in material damages.
How much can be made from gambling in Kazakhstan?
The Monthly Calculation Index (MCI) is an indicator used in Kazakhstan to calculate pensions, allowances and other social benefits and to apply penalties. MCI in 2020 will be 2,778 tenge, in 2021 it will be 2,917 tenge, and in 2022 it will be 3,063 tenge (approximately RUB 527, USD 7 or EUR 6).
All legal entities wishing to open a legal casino or betting office in Kazakhstan must obtain a licence according to the Law on Licensing. The cost of obtaining a license in 2022 is 3,845 MCI (approximately 24,000 EUR or 27,000 USD) for a casino and a slot machine hall and 640 MCI (approximately 3,970 EUR or 4,500 USD) for sweepstakes and bookmaker’s office.
Also, according to Article 66 of the Kazakh Tax Code, tax on gambling business is levied per unit per month:
- A gaming table – 1,660 MCI (by law – one casino must have at least thirty gaming tables);
- a slot machine – 60 MCI (at least 60 in one hall);
- totalizator cash desk – 300 MCIs, electronic totalizator cash desk – 4,000 MCIs;
- bookmaker’s office cash desk – 300 MCIs; electronic bookmaker’s office cash desk – 3,000 MCIs.
Kazakhstan is the only case worldwide in which a legal casino or betting shop is subject to value added tax (VAT). There is also a corporate imputed fixed tax on both the online and land-based platforms.
According to the Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, the gambling industry in the country grew more than 7 folds to 89.7bn tenge in 2020. During the first half of 2021, gambling entertainment services have grown more than 4-fold (as compared to the first half of 2020) and casino turnover exceeded 35 bln tenge.
And if we take into account the informal sector, the volume of gambling in Kazakhstan in 2020 increased 18-fold – a total revenue figure reaches 278 billion tenge.
Also, gamblers in Kazakhstan get taxed winnings, which exceed 50% of the minimum wage. Residents of the Republic must pay 10% of the cash remuneration to the state budget, non-residents – 20%. The tax is withheld by the organiser of the lottery or betting and the player will receive 10% or 20% less.
From January to March 2022, companies providing a variety of services in Kazakhstan earned a total of 1.78 trillion tenge. According to the data from the National Statistics Bureau, two sectors – betting business and sports, leisure and entertainment – showed the highest results in terms of both volume index and monetary growth. Casino owners and betting organizers earned over 138 billion tenge in the first quarter of this year. This is 7 times more than at the beginning of 2021. Almost half of this amount went to foreign companies. Total income of betting business owners is not evenly distributed among gambling reservations. Casinos and betting shops in Kapshagay earned 95% of the total amount – 132 billion tenge.
Features of the betting industry in Kazakhstan
All websites of licensed online bookmakers in Kazakhstan are located in the .kz domain zone.
As of 4 January 2021, land-based betting offices are prohibited in Kazakhstan, except those located in gambling zones.
Online bookmaker’s activities in Kazakhstan are legal. Pursuant to Law No. 356-VI of 2 July 2020 “cash and non-cash payments, including electronic money, between a betting participant and a bookmaker’s office or sweepstakes, including payment of winnings, are permitted only with the involvement of a Betting Accounting Centre (BAC).
- The Betting Centre in Kazakhstan is a counterpart of TSUPIS in Russia (until autumn 2021), as well as a new body to control Russian bookmakers – the Unified Gambling Regulator.
It is planned that the BAC of Kazakhstan will become operational in 2022. Players register with the BAC and undergo an identification procedure. A wallet is then created for each player and the BAC receives money from players (non-cash and cash). When a player wins, he receives the money according to the same scheme, only in reverse order. This scheme allows the best protection of the player’s interests, his personal data and guarantee the payment of winnings.
Bookmakers need to integrate with PayBox.money only to work with BAC. It is possible to accept payments and make payouts to customers in the following ways: by bank cards, from e-wallets and terminals, via mobile commerce, etc.
On 12 January 2022, President Kassym-Jomart Tokayev announced the establishment of the new fund “Қазақстан халқына” (“For the People of Kazakhstan”). In the near future, the country’s government should name the companies that will contribute to the fund, as well as agree on the amount of contributions. There are plans to raise money from big business, international organisations and government sources.
As soon as it became known, however, the Sports Betting Centre and the national lottery operator, as the market monopolists, would be among the contributors.
At the expense of the “Қазақстан халқына” fund, social problems will be solved: health care, education, culture and children’s mass sports. The money from this fund will be used to restore Almaty after the riots at the beginning of 2022, and to help the relatives of the deceased security officers.
The results of the “Choice of the Year” competition, which recognises the level of betting development in Kazakhstan and the trust consumers place in it, speak for themselves. It is held to find the best products, services and companies, and the winners are chosen by public opinion and a jury of experts. On December 21, 2021 the title “Online Bookmaker №1 in Kazakhstan” was awarded for the second time in a row to the international bookmaker company Parimatch.
How to attract an audience from Kazakhstan to casino and betting sites?
Kazakhstan is a large state in Asia with a population of around 20 million people. The state language is Kazakh, understood by more than 80% of the population. Russian is the official language of the republic; it is used in business communication. According to various sources, it is also spoken by about 80% of the people.
In 2019, during his retirement, President Nursultan Nazarbayev stated that “in the future, the people of Kazakhstan will speak three languages – Kazakh, Russian and English!” A state project on the trinity of languages was adopted at the time, and there were plans to introduce high school education in English, but the project turned out to be crude. English is slowly making its way into Kazakh life, but “naturally”, without much support from the state.
Also, in Kazakhstan there is a project of the new Kazakh alphabet and graphics: by 2025 the country will switch from Cyrillic to Latin alphabet.
Parimatch Middle Asia CEO Roman Boyko said there is still a strong prejudice against betting in Kazakhstan, which people confuse with casinos and gambling. Also, unfortunately, there is a misconception in society that bookmakers are interested in people who will come and lose everything they have.
“The attitude of Kazakh society to betting is certainly changing. Still, the business is becoming more transparent, more socially responsible, bookmakers are becoming better known. This cannot but affect society’s attitude: people are slowly, very hard, very grudgingly, but they are accepting this type of business.
We have to do a lot of work, in order for the population to accept bookmakers, not just as evil, but as a normal civilised form of business, a form of entertainment,” added Sergey Kazakov, deputy director of the renowned betting company Tennisi KZ.
Parimatch experts in Kazakhstan created a portrait of the most typical fan of sports betting: they are men over 25 years old who are interested in sports or lead a sporting lifestyle themselves. They also have a stable income. 80% of bookmakers’ audience bets on average about 2000 tenge (about 300 roubles). The main motivation is not to win big money, but to get bright emotions.
Football, basketball, tennis and ice hockey are the most popular sports among the Kazakhstan people. The most popular sport is eSports. Boxing and MMA are also popular, but there significant events are much less frequent.
Players in Kazakhstan have to pay 10% to 20% for winnings (if they exceed 50% of minimum wage). Some betting shops reimburse players with individual income tax from their income. Such an option can be used as an additional tool to attract players.
Betting and gambling in casinos in Kazakhstan are allowed from the age of 21. For non-residents of the country, a different rule applies – not before the age of 18.
How to advertise gambling in Kazakhstan in the right way?
The relevant law “On Gambling Business” does not contain a ban on gambling advertising in Kazakhstan.
However, the Republic of Kazakhstan Law “On Communications” and “On Advertising” regulate restrictions on the advertising of Kazakh betting and gambling. It is forbidden to advertise only illegal games: electronic casinos, online casinos, and activities without a Kazakh gambling licence. Otherwise, gambling advertising in Kazakhstan is not restricted in any way.
According to the Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, the growth of gambling services is facilitated by the massive marketing of bookmakers, especially advertising at football matches and other competitions, placed as part of the sponsorship contracts of the BCs and sports teams.
Gambling advertising is more widespread than other socially disapproved sectors of the economy – tobacco and alcohol, which are more strictly regulated in the country.
Protection of gamblers in Kazakhstan
In Kazakhstan, there is a problem of addiction to gambling, and it develops absolutely uncontrollably. Badri Shainidze, head of the Association for Protection of Gambling Industry Rights, said.
In his opinion gambling addicts are a time bomb. They are a potential threat to society: they commit robberies, assaults in order to get money for bets, to pay debts. This criminogenic situation seriously damages the reputation of the gambling business.
Officially, in accordance with the RK Law “On Gambling Business”, every person who wants to protect himself from the negative consequences of gambling and betting can set a restriction on participation in gambling and betting.
To do so, a free-form written application for a restriction (for a period of 6 months to 1 year) must be submitted to any gambling business operator. The submitted application cannot be returned or withdrawn.
A copy of the accepted and registered application is sent to the authorized body to the Committee of Tourism Industry of the Ministry of Culture and Sports in the Republic of Kazakhstan. After that, information on an individual is entered into the list of persons restricted from participation in gambling and (or) betting, and an updated list is sent to all organizers of gambling business in the country.
Also, in accordance with article 27, paragraph 1, of the Civil Code of the Republic of Kazakhstan, a citizen who through abuse of gambling, betting, alcohol or drugs puts his family in a difficult financial situation, may have his legal capacity restricted by the court. Close relatives and family members may apply to the Committee of Tourism Industry for inclusion of such a person in the list of persons restricted from participation in gambling and (or) betting.
However, as Badri Shainidze clarified, the Kazakh authorities have no exact information about the number of gambling addicts and their age, as no research has been conducted in this direction. The official list includes only those gambling addicts, who underwent treatment or fell under restriction of legal capacity. According to the Ministry of Healthcare of the Republic of Kazakhstan, there were only eight of such citizens in the country in 2020. However, analysts estimate that the number of gambling addicts may reach 100,000.
Badri Shainidze offers his own solution to the problem of addiction and protection of gamblers in Kazakhstan: introduction of limits. For example, limitation of monthly betting to 100-150 thousand tenge would not harm bookmakers, but have positive effect on the gambling market. This initiative was already put forward in 2019, but was not adopted.
How are casino and betting sites being blocked in Kazakhstan?
The Ministry of Digital Development, Innovation and Aerospace Industry regulates the domain space in Kazakhstan. It operates within the framework of the “Rules for Registration, Use and Allocation of Domain Names in the Space of the Kazakhstan Segment of the Internet” document from 2018.
A website can be blocked in Kazakhstan for several reasons:
- the server hosting the website is outside the territory of Kazakhstan. By law, the site must be connected to a local ISP and use a Kazakhstani ip address;
- the site has no SSL certificate;
- the site contains malicious software (including illegal collection of personal data, attempt of fraud, distribution of illegal information);
- when registering a domain in the zone .KZ or ҚАЗ specified invalid or incorrect data about the owner.
Websites of online casinos and bookmakers operating without a license from Kazakhstan may be blocked in accordance with the Republic of Kazakhstan Law on Advertising.
The Ministry “regularly carries out work” to identify sites that threaten the safe use of the Internet in Kazakhstan. Once a violation is identified, information (a letter) is sent to the Kazakh Network Information Centre (KazNIC), which is the sole manager of the top-level domain name support. The KazNIC staff issues a warning to the website owners demanding that they rectify the infringement. If no changes are made, use of the domain name is terminated and the site becomes unavailable.
Lists of blocked websites are not published in Kazakhstan. You can check whether a site is blocked or not at a private resource https://kazbt.com/.
Restrictions related to blocking “foreign” websites came into force in Kazakhstan on February 1, 2021. However, the procedure for identifying and prohibiting access to such sites is not specified in the law. As of early 2022, there are no systematic pinpoint blocking of websites. However, the National Security Committee of Kazakhstan has the ability to “manually” block access to the Internet itself, without the involvement of the operators themselves. This indicates that work in this direction is being done, the state is looking for opportunities and solutions.
Prospects for development and restriction of gambling in Kazakhstan
At the end of 2021, first proposals to toughen the penalties for the promotion of illegal online gambling sites in Kazakhstan were voiced. The country’s authorities are thinking of creating an effective mechanism in the complex fight against illegal online gambling. This is due to the fact that online casinos constitute a big problem, because access to land-based gambling establishments is limited and more controllable due to the creation of gambling zones. Despite ongoing government measures to block online gambling sites – with more than 2,000 such resources restricted in 2021 alone – there are no fewer of them.
First and foremost, to combat illegal gambling and betting in Kazakhstan, it is necessary to restrict access to underage citizens who hope to make easy money with the help of online casinos. Also, the younger generation of people in Kazakhstan is increasingly using the Internet not only for a variety of tasks, but also for entertainment.
In particular, Deputy Yelnur Beisenbayev demanded strict compliance with the legislation in force in Kazakhstan regulating gambling promotion. Let’s remind that according to the law ” On Advertising ” and the basic law on gambling business, activity of any unlicensed gambling platforms in the Internet and their advertising are forbidden.
Also, according to deputy Beisenbayev, an effective way would be keeping records of offenders involved in online gambling.
At the same time, Vice-Minister of Culture and Sports Yerzhan Yerkinbayev called to block transactions in favour of virtual casinos in December 2021. According to him, restricting advertising to services that are not registered in Kazakhstan, but attract Kazakhstani citizens to gamble, is not a sufficient measure to combat shadow gambling. Therefore, it is necessary to introduce a ban on money transfers to them, including the use of credit cards. It is planned that a special register of companies, to which the blocking will apply, will be created in the future.
Dauren Abayev was appointed Minister of Culture and Sports of Kazakhstan on 11 January 2022. Previously, he headed the Ministry of Information, Communication and Public Opinion. Since the Committee of Culture and Sports is a profile and responsible for the development of all gambling in Kazakhstan, with the arrival of the new head we can expect some changes in the industry.
How to deal with gambling in Kazakhstan: experts’ opinions
Galymzhan Duambekov, head of the Bookmakers’ Association of Kazakhstan, said, “We envy the work of the Russian agencies, which quickly block and fight against illegal online gambling. Nothing similar happens in the Republic of Kazakhstan! Meanwhile, online casinos are one of the main informal sectors sucking money into offshore zones,” he said.
Head of the Association for Protection of Gambling Industry Rights Badri Shainidze commented: “In order to solve current situation the authorities and businessmen have to join together. However, in Kazakhstan’s gambling industry there is no effective dialogue between the different representatives of the market. Therefore, it is unlikely that in the near future companies will be able to unite their efforts for the benefit of players”.
Political scientist Talgat Kaliyev said, “The 18-fold increase in unlicensed gambling is only the beginning, as gaming fans will play regardless of the regulations. Popularity of offshore casinos in Kazakhstan will only continue to grow. A large number of small casinos in different hotels would increase the number of tourists in specialised areas and make the gambling business more attractive. There is also demand from players of more modest means who want cheaper hotels and inexpensive gambling entertainment.”
Roman Boiko, CEO of Parimatch Middle Asia: “The law regulating betting appeared in Kazakhstan in 2007. This is not enough time for the market, legislation and processes to form into an effectively working mechanism. I think we can say that all market participants are still in search of the optimal solution. The market has long needed more transparent and clear rules of the game, and we are confident that with time the best option will be found.
Sergey Kazakov, Deputy Director of Tennisi KZ: “Of course, it is not easy to run a gambling business in Kazakhstan. The fact is that the legislation changes almost every year and there is a lack of stability in the regulatory and tax framework as well as in the control of betting companies. Monitoring and taxation of Kazakhstan’s gambling business is increasing tremendously almost every year.
What’s happening in Kazakhstan 2022: latest news and trends
Due to the unrest in Kazakhstan that broke out at the beginning of 2022, the internet was completely cut off in the country and mobile communication stopped working. This resulted in incorrect functioning of casino and betting sites, shutdown of payment systems and, as a consequence, a huge drop in traffic. As a result, many casino and bookmaker affiliate programs in Kazakhstan suspended their work until the situation stabilises.
In the middle of January, the Internet partially resumed its work in some regions of the country.
Within 6 working days (from 5 to 10 January inclusive) the Kazakh online betting market dropped by 95%. On January 11, Kazakhstan’s betting market began to pick up after the fall. “Activity is quite high, which gives hope for a speedy recovery. Considering the lack of game availability, it seems that active customers will be more than usual,” said Dmitry Sergeev, chairman of the Parimatch Russia board of directors.
What conclusions can be made after the riots in Kazakhstan in 2022?
- a total blockage of all types of communication, messengers, VPN services and websites in the country is possible;
- one should always be ready to redirect traffic to another GEO, as well as to bring it back if demand increases. The 3Snet network has prepared Top Offers from casinos and bookmakers willing to accept traffic to Kazakhstan!
- CPA-net is keeping an eye on the situation – subscribe to our Telegram to stay updated on breaking news!
Gambling business is one of the most profitable in the world, and Kazakhstan is no exception. But at the moment there is a situation here, where official bans are stifling licensed companies. At the same time, the control over informal gambling sector is so low, that the profit of illegal business during the last couple of years increased almost 20 times. Virtual casinos are flourishing despite a legal ban! This means that there is money and desire to have fun at online casinos and betting shops among Kazakhs, and the state of Kazakhstan could earn good income in the form of taxes from the market participants, having created comfortable conditions.