How to promote online betting and gambling in Kyrgyzstan?

Kyrgyzstan How to promote online betting and gambling 3snet en

Publication date: 04 Sep 2023

In 2022, gambling regulation in the Kyrgyz Republic has reached a new level: a law allowing casinos and betting companies has been adopted. Certainly, things are still not very smooth, but the market is developing rapidly. The new 3SNET review takes a closer look at how to promote online betting and gambling in Kyrgyzstan.

!!! Information updated on 4 September 2023! Read more!

How online betting and gambling is regulated in Kyrgyzstan

In June 2022, Law No. 50 “On Gambling Activities in the Kyrgyz Republic” was adopted.

The law permits all types of gambling and betting: a license is required to establish any type of gambling activity.

What gambling is allowed in Kyrgyzstan?

Kyrgyzstan How to promote online betting and gambling 3snet games en

The Law on Gambling Activity provides a detailed description of all terms and market participants, regulatory procedures and requirements for gambling establishments.

In particular, the law clarifies two terms:

Online casino is the organization and conduct of gambling in real-time mode, both in single-user and multi-user mode, by using hardware and software systems adapted for gambling in a gambling establishment or other premises, or communication facilities via the Internet (regardless of the premises of use).
Electronic (virtual) casino is a website or a program providing access to gambling on the Internet.

For betting in Kyrgyzstan, there is only a definition of a betting company (“a gambling establishment in which bets are conducted between all participants and the gambling establishment on the outcome of an event, the result of which is not known in advance;”). There are no specific clarifications on online activities.

A separate resolution appoints regulators:

The State Service for Regulation and Supervision over the Financial Market (Gosfinnadzor) under the Ministry of Economy is the authorized government agency to regulate gambling activities, except for online and virtual casinos.
The State Service for Regulation and Supervision of the Communications Industry (Gossvyaz) under the Ministry of Digital Development (Minsitry) is responsible for the regulation of gambling activities in relation to online and virtual casinos.

How to obtain a gambling license in Kyrgyzstan?

Only resident legal entities (LLC or CJSC) can obtain a gambling or betting license in Kyrgyzstan.

It is necessary to have the reserve fund to cover losses and risks of 10,000 to 80,000 calculation indices* (approximately from 1.1 thousand to 9.1 thousand US dollars).
The license is issued for 10 years.
A license for a casino would cost 84m KGS (US $965,000); for a slot machine hall, 42m KGS (US $483,000); and for sweepstakes and a betting company, 10.5m KGS (US $120,000).
“The license is issued for a certain location of a gambling establishment indicated in the licensee’s application.” Thus, a gambling license is tied to a specific physical address.

The conditions for the issuance of licenses for the operation of online casinos or bookmakers in Kyrgyzstan are not outlined.

For violation or non-compliance with the legislation on gambling activities, the Kyrgyz Code of Offences provides for a fine of 2,000 calculation indices* (approximately 230 USD) for legal entities.

*1 calculation index = 10 KGS = 0.011 USD (data as of April 2023).

Difficulties of gambling regulation in Kyrgyzstan

A very important restriction for casinos or betting offices in Kyrgyzstan is the prohibition on attracting local audiences. Residents of Kyrgyzstan are not allowed to visit land-based establishments and gamble online! Apart from severely limiting the pool of potential visitors*, this prohibition is very challenging to enforce. There is no guarantee of entry using passports, as many Kyrgyz nationals hold passports of other countries, and no other control mechanisms have been devised. As for gambling organizers, violation of this clause will result in the deprivation of their license. * Tourists are expected to play in Kyrgyz casinos and make bets in local betting shops. According to the department of tourism of the republic, about 5 million guests visited the country in 2022. That’s a lot, but by law, “the casino must be located in a private restaurant, hotel complex”. But most of the country’s visited attractions are natural sites (lakes, mountains, walnut forests) located away from cities, restaurants and hotels.
From the first point follows the second. What is the point of opening an online casino or a betting shop in Kyrgyzstan if you cannot attract users from that country? Register a legal entity in the country, pay for a license and regularly pay taxes so that only foreigners (who are already doing so successfully) can play?

As of April 2023, the Kyrgyz authorities had issued licenses to 4 betting companies. Ainura Usenbekova, the Kyrgyz deputy minister of economy and commerce, said that by the end of 2022, the budget added KGS 42m / USD 482,900 (meaning four companies got a license).

Finanadzor’s website has published documents showing the license applications of Olimpbet and Ringobet bookmakers (Trust Game Ltd.). According to local media, another license has been granted to BC 1xBet (Sports Entertainment LLP). There is no data on a fourth licensed bookmaker.

On 1 May 2023, the website of the Gosfinnadzor of the Republic of Kazakhstan published information on the issuance of the first license to open a land-based casino: the documents were issued to “Grand Casino” LLC. The state budget received KGS 84 million / USD 914 thousand for the issuance of the license.

How are gambling and betting sites blocked in Kyrgyzstan?

In 2022, a decree “On Measures to Curb Illegal Gambling Activities” was signed. The Ministry of Internal Affairs (MIA) of Kyrgyzstan is responsible for finding and stopping operation of illegal casinos, sweepstakes, and betting offices.

At the moment, there is no information about the verification of websites or their blocking either on the website of the Ministry of Internal Affairs of Kyrgyzstan or on the website of Gosfinnadzor.

Previously, during the prohibition of gambling and betting, communications operators (internet providers) were required to block access to casino and bookmaker websites at the behest of the Kyrgyz State Communications Agency. Currently, the website of the State Communications Agency of the Republic of Kyrgyzstan does not provide any information on blocked gambling or betting sites.

Therefore, the blocking of online gambling sites is on a common level with the rest of the industry. Regulation in the country has only just begun, with the authorities focusing on the land-based shadow sector. Online gambling in Kyrgyzstan is not only poorly regulated, but also minimally controlled.

How much money is made on gambling in Kyrgyzstan?

The Tax Code of the Kyrgyz Republic details the tax rates for the land-based sector. The tax must be paid every month.

The rate is based on the taxable unit (gaming table or betting shop), and increases over the years. So far rates are fixed only till the end of 2024: for one casino game table from 2024 year, the rate is 1250000 soms, for one slot machine from 2024 year, it is 100000 soms, for one betting shop and sweepstakes from 2024 year, the rate is 500000 soms.

The tax rate for online casinos and electronic (virtual) casinos is set at 8% per month of net profit.

Previously the Ministry of Economy of Kyrgyzstan estimated that after the legalization, gambling business will bring revenue to the budget from KGS 3 to 5 billion per year (up to $60 million). Besides, about 5 thousand people would have jobs: about $1 million of income tax and $2.5 million of insurance premiums a year.

The budget payments are still only hypothetical, because legal betting companies have just started operating in Kyrgyzstan. However, illegal gambling has been in existence for all the years of the ban, with the people of Kyrgyzstan betting and gambling on various offshore sites. In January 2023, the deputies of the Zhogorku Kengesh (Supreme Council of Kyrgyzstan) declared that the amount of money withdrawn from the Kyrgyz economy as a result of unregulated online betting activities is more than $100 million a year.

In particular, this data is confirmed by a high-profile criminal case. In 2019, when any gambling activity was still prohibited, the State Committee for National Security of Kyrgyzstan published information about a curb on the operation of an illegal bookmaker’s office. The company operated online and accepted bets on various sports. Eventually, they seized funds of KGS 35.7 million and USD 31.1 thousand (about USD 471,000 in total). And over three years of operation (since 2016), the BC had withdrawn more than KGS 1 billion (USD 11.5 million) to foreign bank accounts.

New! On 1 August 2023, the budget of Kyrgyzstan received the first taxes! The Ministry of Finance has published data on the receipt of tax on gambling activities. Although gambling has been legalized in the country for more than a year – since June 2022 – the first payments from gambling and betting have only arrived now. In May and June, bookmakers and casinos in Kyrgyzstan transferred KGS 25.5 million (about $290,000) to the budget. At the same time, it was casinos that transferred most of it – KGS 24.8 million.

On 1 September 2023, the Ministry of Finance published new figures: for 7 months (and actually since May 2023), the Kyrgyz budget received 32 million 550 thousand soms (approximately USD 368,804.52) in the form of tax on gambling activities. The largest contribution was made by casinos with KGS 31.5 million in taxes. Bookmakers and sweepstakes paid KGS 1.05 million; they started paying taxes only in June. The provided statistics shows that gambling and betting operates in Kyrgyzstan in a stable manner, bringing profit to operators and taxes to the state budget.

How to advertise betting and gambling properly in Kyrgyzstan

On 30 June 2022, the Kyrgyz Republic Law “On Advertising” removed an explicit ban on advertising of any gambling activity.

However, advertising of gambling and betting in Kyrgyzstan must comply with the general rules:

Article 5, paragraph 8: “Advertising must not encourage actions that violate the legislation of the Kyrgyz Republic.” And as residents of the country are banned from visiting gambling establishments, advertising of casinos and betting companies cannot be targeted in any way at the population of Kyrgyzstan.

The Kyrgyz Contravention Code provides for a fine of 450 calculation indices for legal entities for violating the rules on gambling advertising.

How to attract Kyrgyz residents to casino and bookmaker websites?

The Kyrgyz Republic is located in Central Asia. The population is 6.7 million and is made up of mainly Kyrgyz, Uzbek and Russian nationals.

Gambling in other CIS countries:

Turkmenistan is a very closed country with a huge number of prohibitions. Officially, gambling is allowed in Turkmenistan, but the legislation is weak and almost non-existent.
Many years ago, the Tajik authorities banned all casinos, but betting companies are legal and have been operating successfully for more than 10 years.
Uzbekistan’s gambling market is an ambiguous phenomenon. On the one hand, all casinos and betting shops are forbidden by law. On the other hand, there is demand from active and solvent audience.

Major cities are the capital Bishkek (more than 1 million people), Osh, Jalal-Abad, Karakol.

The state language is Kyrgyz, with Russian as the official language. Nonetheless, Russian is the most widely spoken language in the country, followed by Kyrgyz, Uzbek and English.

The national currency is the Kyrgyzstani Som (KGS). Interestingly, banknotes issued in 2009-2010 (valid for 2023) were recognized as one of the most beautiful currencies in the world!

The standard of living in Kyrgyzstan is low. In April 2023, the average salary in Kyrgyzstan (according to the National Statistics Committee) was only 30093 soms (approximately USD 344). However, statistics shows a 42.4% year-on-year increase in wages.

The Kyrgyz State Communication Agency reported in 2021 that 88% of the country’s population has internet access. 62.19% access it from their mobile devices and 37.27% from their computer.

What sports are popular in Kyrgyzstan?

In Kyrgyzstan, as in many Central Asian countries, national sports are common:

The popular folk game of “azyk” (shagai/ chükö/asyk/ashyk/oshuq) is an analogue of the Russian knucklebones, but with the use of camel, horse and ram bones. There is a monument in Osh in the form of a game bone.
The horse racing “baigue”, which used to take place on rough terrain, now takes place on hippodromes. Likewise, “buzkashi”, an equestrian sports game for a prize (an analogue of horse polo), is widespread. The Kyrgyz buzkashi team has repeatedly won the World Nomad Games, the Asian Championship and the World Championship in kokpar (a variant of the game).
Salbuurun is a hunting game with hunting birds and dogs. The national festival of this game is held every year on the shores of Lake Issyk-Kul and includes an archery competition, falconry and hunting with golden eagles, as well as wolf hunting with Taigans (of Kyrgyz breed). The next festival events will take place in August 2023.
Special mention should be made of the Kyrgyz folk logic game “Toguz Korgool”. Athletes from Kyrgyzstan are regular medalists in the Toguz Korgool World Championship.
An exciting event will take place in October 2023: the “Autumn Marathon during the Walnut Harvest”. The competition includes not only an 8-kilometre marathon but also donkey rides.
Teams from Kyrgyzstan actively participate in the World Nomad Games, which are held every two years. The next event, which includes competitions in 40 national sports, will be held in Kazakhstan in 2024.

Traditional sports are also popular in Kyrgyzstan:

The national football team participates in all international competitions. The Kyrgyz National Football League is held annually. The most famous football clubs in the country are Dordoi Bishkek and Ysyk-Kol Muras.
In martial arts (Greco-Roman wrestling, judo, boxing) Kyrgyz athletes win prizes in world and Asian championships.
The modern Kyrgyz have moved from horses to bicycles, while the Kyrgyz landscape makes it possible to create interesting cycling routes. Kyrgyzstan has one of the world’s most challenging bicycle races, the “Silk Road”.
Kyrgyz athletes are very successful in Russian billiards. Kanybek Sagynbaev is the most successful player in the world in this sport, he is a three-time world champion and three-time world vice-champion.

What means of payment are available in Kyrgyzstan?

The national payment system of the Kyrgyz Republic is represented by the Elcart card. All major local banks are connected to the system such as Optima, Capital Bank, RSK Bank, Commercial Bank KYRGYZSTAN, Kompanion Bank, Dos Credobank, EcoIslamicBank, Bank Asia, Halyk Bank Kyrgyzstan, KICB, FinanceCreditBank, Bai-Tushum, DemirBank, Tolubay Bank.

UnionPay cards (local banks Halyk Bank, Bakai, Optima are connected), Visa and MasterCard cards are available for deposit and withdrawal in Kyrgyzstan.

Local e-wallets are in operation in Kyrgyzstan: Elsom, Umai.kg, Kompanion, Ilbirs, Balance, Megapay, O! Dengi, Amanat, Mbank Online, Namba One and Freedom Pay.

International systems WebMoney, Qiwi, Wallet One also operate in the country.

Neteller and Skrill do not work in Kyrgyzstan.

Creatives for Kyrgyzstan: cultural peculiarities

The Kyrgyz are ancient people who respect their own traditions. Anything related to their history and customs evokes a sense of pride. The use of recognizable elements in advertising (carpets, a yurt, horses, national costumes) will increase trust in the brand, while jokes on the subject will cause rejection and a negative reaction.
Due to national traditions, Kyrgyz people have a special attitude towards horses. It is still a symbol of wealth and success. And the art of making yurts (“boz ui”) is on the UNESCO list of cultural heritage. Till now yurts are used as dwellings, public facilities, sales points. The value of a yurt can be up to tens of thousands of dollars, making it a coveted prize.
National epic Manas is the longest epic work in the world. Its characters – the warrior Manas, his son and grandson – are recognizable characters representing wisdom and national unity.
Social status in Kyrgyzstan is determined by the height of the national hat called bakai kalpak. The higher the white hat with a black trim, the higher the person is respected. Another attribute of high status is different parts of a ram: during traditional celebrations, the head, tail and pelvic bone are given to the most honoured guests.

What sources of traffic are popular in Kyrgyzstan?

There are no blocked social networks and services in Kyrgyzstan, several sites with inaccurate or extremist information are banned by court order.

According to StatCounter service for the last year (March 2022 – March 2023):

Google Chrome is the most popular browser in Kyrgyzstan, with 79.85% of the country’s residents using it. Next comes Safari at 11.41%, Samsung Internet at 2.62%, Opera and Yandex (about 2%).
the most popular search engine is Google (89.23%), Yandex (9.89%), Bing, DuckDuckGo and Yahoo (less than 1%).
among social networks, Instagram* and Facebook*, Pinterest (17.07%), Twitter (13.93%), YouTube (10.43%) and Vkontakte (1.37%) are popular.

*Instagram and Facebook are blocked in Russia by court order.

Prospects for the development of betting and gambling in Kyrgyzstan

Kyrgyzstan’s gambling market is not perfect but continues to actively develop. New bills aim to make the country’s gambling market more profitable and efficient.

In March 2023, the Ministry of Economy of Kyrgyzstan drafted a bill that proposes to lower the tax rates for the gambling industry. The main reason is the lack of investors and interest in developing the industry in the country.

As the head of the Ministry of Economy Daniyar Amangeldiev clarified, the authorities understand that gambling is an essential opportunity for the development of tourism business and requires creation of favourable conditions for investors. In particular, it is planned to reduce the tax for land-based establishments several times: for instance, from KGS 1.25m to KGS 600,000 per gambling table in 2024.

“Let’s first attract investors, and if they do well and are able to pay more taxes, then the cabinet will be able to increase the tax rate on their own,” Amangeldiev said.

However, as various experts point out, the biggest problem for opening a casino in Kyrgyzstan is the ban on locals visiting the establishment. This not only narrows the target audience as much as possible, but is also a very difficult condition to fulfill.

In April 2023, the National Bank of Kyrgyzstan proposed to allow online gambling establishments to accept payments in foreign currencies. By law, in Kyrgyzstan all payments are made in the national currency of soms. But the customers of Kyrgyz online casinos are only foreigners who find it inconvenient.

On 1 May 2023, deputies of the Zhogorku Kengesh (Supreme Council) released a discussion paper proposing permission for the operation of betting shops for the residents of Kyrgyzstan. In the justification they named sports betting as an intellectual betting and not a game of chance. They also noted that “the introduced ban … has deprived the country of billions of KGS and thousands of jobs, while bookmakers have simply gone underground.
In the same document, lawmakers propose to support sports from bookmakers’ profits. A special fund where the betting companies are to contribute 2% of their incomes would help to develop various kinds of sports in Kyrgyzstan.

Kyrgyzstan’s gambling market has only taken the first step towards legalization. All types of betting and gambling, including online casinos, are officially allowed. Nevertheless, the legislation is still imperfect, with many important issues in the pipeline. The attention of the authorities is focused on the land-based sector, while bookmakers and casinos on the Internet are still completely free to operate with users from Kyrgyzstan. The 3SNET network provides a list of offers where quality traffic for online casinos and bookmakers in Kyrgyzstan is expected. It’s time to connect and make money!

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