Contributed By 4H Agency
Taking into account that a huge reform of the gambling sector in Kazakhstan took place in July 2020, there are no significant changes which are expected to be introduced to the regulation of gambling.
Summer 2020 brought a lot of new provisions to Kazakhstan's gambling regulation, which seriously changed the gambling business ecosystem.
The main changes are the following.
Overall, changes that were introduced into the Gambling Law and related regulations demonstrate a paternalistic approach on the part of the authorities to the gambling business.
According to the Gambling Law, betting and the totalisator are permitted, and are regulated under specific licences.
Any online casino games and online slot games are strictly prohibited by the Gambling Law. It should be noted that by "casino games", the Gambling Law means any games that are conducted by means of gambling tables. Ultimately, gambling tables are considered as the gambling equipment that is used for the organisation of gambling.
In order to clearly address the prohibition against any forms of online casinos, the Gambling Law provides definitions of “internet casino” and “electronic casino”:
Lotteries are not considered to be a form of gambling and are regulated by a separate law, which provides that lotteries may be offered in an online format.
The Gambling Law does not provide for any separate licences for the online sector. In other words, the online betting and online totalisator sectors are covered by the respective land-based licences mentioned in 2.2 Land-Based.
The following types of land-based offerings are permitted and regulated under different licences:
As mentioned in 2.1 Online, lotteries are not considered to be a form of gambling and are regulated by a separate law, which provides that lotteries may be offered in a land-based format.
As mentioned in 2.1 Online, the Kazakhstan Gambling Law determines any games that are conducted by means of gambling tables as casino games. In other words, mostly all known casino games can be conducted by land-based gambling operators.
The Gambling Law
One of the key pieces of legislation regulating the organisation of gambling in Kazakhstan is the Kazakhstan law “On the Gambling Business” (the Gambling Law).
The Gambling Law outlines:
As well as the Gambling Law there are also a number of key pieces of secondary legislation that apply to gambling activities.
General Business Law
In addition, as in the vast majority of ex-USSR countries (which are usually countries with a civil law system), the Kazakh gambling sector will also be affected by general laws which cover all spheres of business, for instance:
The Gambling Law defines gambling as “a risk-based agreement on winnings entered into by the participants of gambling among themselves or with a gambling operator, in respect of the event participants take part in”.
The Gambling Law does not provide for a definition of “land-based gambling”.
Instead, there is a set of definitions outlining the status of “gambling organisers” within different regulated sectors (which are outlined in 2.2 Land-Based).
The Gambling Law does not provide for any overarching definition of online gambling.
Instead, the Gambling Law provides only for a definition of the “electronic cashier of the betting and totalisator”, defining it as “an information system through which bets are accepted (recorded) and winnings are paid using information and communication networks”. Virtually, this definition allows for online offerings to be in place.
Offences are provided by the Criminal Code as well as the Code of Administrative Offences.
In terms of the description of the key offences, it is practical to divide them into two groups: offences provided by the Criminal Code and offences that are provided by the Code of Administrative Offences.
Criminal Code Offences
The Criminal Code provides, inter alia, for the following key offences:
Offences of the Code of Administrative Offences
The Code of Administrative Offence provides, inter alia, for the following key offences:
Possible penalties for gambling-related offences include correctional labour or community service, imprisonment, confiscation of properties, fines and revocation of licence.
In cases of criminal liability of the gambling operator, key penalties include:
In cases of administrative liability, key penalties include:
Taking into account the substantive change of the gambling regulations in July 2020, there is no information of any pending legislation at this point.
According to the Kazakh laws, the government authority which is responsible for the regulation of gambling matters is the Ministry of Culture and Sports of the Republic of Kazakhstan (the Regulator).
Kazakhstan, being a rather police-ridden state, strictly monitors the compliance of gambling operators with the established gambling regulations.
The enforcement of the penalties provided by the laws is aimed at all participants in the gambling market and there are many cases of the enforcement of these penalties.
At the beginning of 2020, the Kazakh authorities initiated criminal proceedings against one of the largest betting operators in the county due to their suspicion that this betting operator organised an “electronic casino”, which is strictly prohibited by the Gambling Law.
To add to that, Kazakh authorities acknowledge the existence of offshore gambling operators and have established measures to eliminate their activities within the territory of Kazakhstan. More details regarding these measures can be found in 6.6 Technical Measures.
The available licences are matched to the list of regulated activities under the Gambling Law:
As mentioned in 2.1 Online, online casinos and online slots are prohibited.
It should be noted that there are no separate licences for online offerings. In other words, it is impossible to conduct online activities without a land-based presence.
Licences are readily available.
All types of licence are issued for a period of ten years.
An entity wishing to obtain a licence should apply for it, provided that the applicant (ie, the entity that will be the gambling operator upon obtaining a licence) is in compliance with the requirements that are established for gambling operators by the Gambling Law.
In this regard, the applicant should meet, inter alia, the following conditions.
Management and Shareholders of the Gambling Operator
The shareholders of a gambling operator cannot be:
In addition, the Gambling Law also prohibits such individuals from being involved in the management of a gambling operator.
It takes ten working days, from the moment of application, to receive a licence.
Depending on the type of licence being applied for, the licence fee will be:
It should be noted that such fees are payable only once upon application for a licence.
Along with application licence fees, Kazakh law also provides for the following annual licence fees (in the Tax Code such fees are determined as “fees for the usage of a licence”):
It should be noted that such fees are payable annually in equal portions not later than March 25th, June 25th, September 26th and December 25th of each year.
For instance, annual payment for the usage of a casino licence would be calculated in the following way:
According to the Gambling Law there are two types of requirements regarding the location of gambling premises (buildings):
All gambling venues should be located in non-residential premises. To add to that, the Gambling Law establishes certain prohibitions regarding the location of such premises. It is forbidden to locate gambling venues in:
The Gambling Law also establishes an additional requirement for the location of casinos and slot-machine halls. Namely, casinos and slot-machine halls can be located only within the specially designated zones.
Moreover, casino and slot-machine halls can be located only in at least three-star hotels.
According to the changes introduced into the Gambling Law, which become effective starting from 4 January 2021, betting shops and totalisators can be located only in specially designated zones (see 5.1 Premises Licensing).
The only possible online verticals are betting and totalisators. It also should be noted that the Gambling Law does not provide for any separate licences for online activities.
In other words, such verticals as online betting and totalisators cannot be conducted without a land-based presence.
In addition, the Gambling Law does not define any differences between the online activity of betting operators and totalisators and land-based activity, except for several provisions regarding the “electronic cashier of the betting or totalisator”, which is defined as the “information system through which rates are accepted (accounted for) and winnings are paid out using information and communication networks”.
The Gambling Law does not provide for any explicit regulation of B2B licences.
The Gambling Law does not provide for any explicit regulation of the use of affiliates.
The Gambling Law does not provide for any explicit regulation of the use of white-label providers.
According to the changes introduced into the Gambling Law, which become effective from 4 January 2021, online betting operators and online totalisators will be obliged to provide information about all their bets to the special system called the centre for the accounting of bets. It should be separately noted that the required infrastructure is yet to be created.
Kazakhstan law provides for mechanisms for the blocking of websites of illegal offshore gambling operators. Such blocking is made by the authority which is responsible for telecommunication services on the basis of an order from the prosecution authorities.
It should also be mentioned that the blocking mentioned above was enacted only in July 2020; however, previously government authorities were also conducting website blocking by the means of court decisions. According to such court decisions, these websites were considered as products of foreign media, which violated the advertising ban on online casinos.
Kazakh laws do not regulate the concept of “responsible gambling”. Nevertheless, the Gambling Law provides for the implementation of certain measures that are aimed at addressing the problem of excessive gambling.
Such measures include:
It should be noted that the basic mechanisms related to responsible gambling were introduced into the Gambling Law only in July 2020. According to the authors' information, the required infrastructure (eg, a register of self-excluded individuals) is still to be created.
The Gambling Law provides for the following main tools that should enact measures for responsible gambling.
Upon the decision of the court, such an individual is deemed partially incapacitated for an indefinite period of time. This exclusion can be lifted only upon a subsequent decision of the court.
According to the Gambling Law, the key AML legislation applicable to gambling operators is the Law “On Preventing and Countering the Legalisation (Laundering) of the Proceeds of Crime, and the Financing of Terrorism” (AML Law).
According to the AML Law, gambling operators should ensure that they do the following.
The Ministry of Information and Social Development of Kazakhstan, and its regional units, are responsible for the regulation of matters related to the advertising of gambling activities.
According to Kazakh law, advertising is defined as “information disseminated and (or) posted in any form by any means, intended for an indefinite circle of persons and designed to form or maintain interest in an individual or legal entity, goods, trademarks, works, services and promote their implementation”.
Kazakh regulations with regard to advertising are of a restrictive nature (the same approach is employed by other ex-USSR countries). For a detailed description of such restrictions, please see 9.4 Restrictions on Advertising.
According to the Gambling Law, it is strictly prohibited to advertise online casinos.
In addition, according to the Advertising Law, it is also prohibited to advertise activities that are deemed unlawful in Kazakhstan.
This leads to the prohibition of advertising for any gambling activities that are not licensed and (or) prohibited.
Violation of the advertising regulations is penalised by:
The Kazakh authorities regularly check websites of non-locally licensed operators and block access to them. There are a large number of judicial cases which have imposed such website blocking.
The Gambling Law does not provide for any definitive requirements with regard to acquisitions and changes of control of gaming and gambling companies.
Please see 10.1 Disclosure Requirements.
Please see 10.1 Disclosure Requirements.
According to the Gambling Law, the Regulator has, inter alia, the following powers:
The Regulator conducts inspections of licensed gambling operators on a regular basis. These inspections are aimed to check the compliance of the gambling operators with the established licensing requirements and/or the provisions of the gambling regulation.
In cases of breach of the established licensing requirements and/or the provisions of the gambling regulation, the gambling operator may be held administratively liable, which can result in the imposition of fines, confiscation of properties or suspension or revocation of the gambling licence.
Furthermore, officers of offshore gambling operators operating within the territory of Kazakhstan may be subject to criminal liability as it is forbidden to operate without the respective licence.
The general approach of the Regulator is rather strict and, as evidence of this, there have been many judicial cases where either licensed gambling operators or offshore gambling operators have been subject to various types of liability.
Taking into account that financial penalties are considered to be the result of the imposition of administrative or criminal liability, the means of their enforcement do not differ from the sanctions described in 11.2 Sanctions.
The concept of “social gaming” is not recognised by the Gambling Law and there are no specific regulations for this activity.
In accordance with the order of the Committee for Sports and Physical Culture of the Ministry of Sports and Culture of the Republic of Kazakhstan No 180, dated 25 June 2018, esports are recognised in Kazakhstan as an official sport.
To add to that, there is also an official organisation: the Qazaq Cybersport Federation registered in accordance with the laws of Kazakhstan.
The concept of “fantasy sports” is not recognised by the Gambling Law and there are no specific regulations for this activity.
The concept of “skill gaming” is not recognised by the Gambling Law and there are no specific regulations for this activity.
At the end of June 2020, the president of Kazakhstan adopted a law which amended various laws in the sphere of digital technology regulation.
This law provided for the basic regulation of, inter alia, blockchain, cryptocurrency mining and decentralised data platforms.
Please see 1.2 Recent Changes.
Gambling tax is calculated on the basis of taxable items per month (payable per month):