Gaming Law 2020

Last Updated November 24, 2020

Belarus

Law and Practice

Authors



4H Agency is a boutique consulting firm fully dedicated to serving members of the gambling business ecosystem in their quest to open up new opportunities, be it a new market, a new vertical, or a new product. The firm's team members, who work in offices in Cyprus, Ukraine and Russia, have experience at the top international law firms as well as international gambling operators and service providers. Moreover, 4H Agency has an established network of various regional service providers and agents (local law firms, HR agencies and seasoned experts in different fields, including marketing and PR, payments and business analytics), which have been carefully chosen in order that 4H is able to act as a “one-stop shop” for international gambling operators entering certain jurisdictions.

According to available information, no significant developments are going to be introduced into gaming law and regulation in Belarus in the near future.

The main development that is excepted, as of now, is the large-scale launch of the online gambling market. This is owing to the upcoming entering into force of the ban on offshore gambling companies starting from April 2021, which might lead to an increase in the numbers of licensed online operators in spite of the existing limitation that only holders of land-based licences – which have operated for at least two years – are eligible to obtain online licences.

Nevertheless, the Belarusian gambling market might be considered as more developed than markets in neighbouring jurisdictions due to the rather comprehensive gambling regulations.

As a final note, the authors would like to add that, owing to the current political instability, it might not be the best time to enter the Belarusian gambling market.

The most significant change recently introduced into the Belarusian gambling market was the establishing of the Online Gambling Regulation in 2018. Upon adoption of the respective regulation, all known sectors became regulated. However, the new regulation provided for a lot of localisation requirements that have to be considered when entering the online gambling market in the Republic of Belarus.

More recently, in January 2020, Belarusian authorities amended the provisions regarding the administrative liability of gambling operators. Namely, the list of offences which constitute administrative liability was reduced; however, sanctions for certain offences were increased.

In addition, in August 2020, Belarusian authorities introduced a unified registry with all types of licences that can be obtained within the territory of Belarus (including gambling licences).

In 2018 Belarusian authorities introduced substantive regulation of online gambling, namely the president of the Republic of Belarus issued the Decree “On the Improvement of Existing Regulation of the Gambling Business”.

This decree provided for the regulation of online betting, online bingo, online casino games (including roulette, dice games, card games (poker) and slot-machine games) and online totalisator under one overarching licence.

Moreover, it is crucial to mention that such verticals can be organised only by the holders of a land-based licences that have operated in the Belarusian gambling market for at least two years prior to obtaining an online licence.

To add to that, Belarusian law explicitly states that only mentioned types of verticals can be conducted within the territory of the Republic of Belarus.

Lotteries are not considered as a type of gambling and are regulated by a separate act. According to this act, the exclusive right to organise a lottery is given to the Belarusian government or to its authorities. Nevertheless, lotteries can be organised online.

It should be additionally noted that, as the regulation of online gambling was introduced only in 2018, Belarusian authorities have decided to establish a certain “grace period” for offshore gambling operators without a local licence until 1 April 2021.

Starting from 1 April 2021, all websites related to offshore gambling operators without the respective local licence will be blocked by the authorities.

Summarising the above, according to the Gambling Law, the following online gambling sectors are permitted and regulated under one overarching online licence:

  • betting;
  • totalisator;
  • bingo; and
  • casino games (roulette, dice games, card games (including poker), slot game).

The following types of land-based offerings are permitted and regulated under different licences:

  • betting;
  • totalisator;
  • casino games (including roulette, dice games, card games (including poker); and
  • slot-machine halls.

As mentioned in 2.1 Online, lotteries are not considered as a form of gambling and are regulated by a separate law, which provides that lotteries could be offered in the land-based format.

The following licences cover the land-based sectors:

  • betting;
  • totalisator;
  • casino; and
  • slot-machine halls.

One of the key gambling frameworks that regulates the organisation of gambling in Belarus is the Decree of the President of the Republic of Belarus “On Approval of the Regulations in Respect of the Implementation of Activities in the Sphere of Gaming Business” (the Gambling Law).

In addition, as in the vast majority of ex-USSR countries (which are usually countries with a civil law system), the Belarusian gambling sector is also affected by the general laws which cover all spheres of business, for instance:

  • the Advertising Law;
  • the Tax Code;
  • the Criminal Code;
  • the AML Law; and
  • the Code of Administrative Offences.

It is very important to note that a crucial aspect of gambling regulation is outlined in legislation covering payment transactions.

More specifically, in the Republic of Belarus, most payments (including gambling ones) should be processed via the automated information system of the unified settlement and information space for individuals and legal entities (ERIP settlement and information space) and the “Raschet” (calculation, payment or settlement) system.

In other words, such special payment features and the regulations outlining respective requirements should be seriously taken into consideration, along with the gambling regulations and other related laws.

According to the Gambling Law, gambling is defined as “a risk-based agreement on winnings entered into by the participants in a gambling game, either among themselves or with a gambling operator”.

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).

Betting

The definition used is “betting office”, which is defined as “an organiser of a gambling business that makes a bet with participants”.

To add to that, a “betting game” is defined as “a game of chance in which its participant places a bet in a betting shop on the outcome of an event (makes a bet with the organiser of the gambling game), and the amount of the winnings is determined before the start of this game and depends on the partial or complete coincidence of the forecast with the documented facts.”

Totalisator

A totalisator is defined as “gambling establishment where the organiser of a gambling game organises the conclusion of a bet between the participants of this type of gambling”.

Casinos

A casino is defined as “a gambling establishment where activities in the field of gambling business are carried out using slot machines, gaming tables, and other gaming equipment”.

Slot-Machine Halls

A slot-machine hall is defined as “a gambling establishment in which activities in the gambling business are carried out using slot-machines and other gaming equipment, with the exception of gaming tables”.

As the regulation of online gambling has been only recently introduced, the Belarusian authorities decided to implement online offerings by creation of the “virtual gambling venue” concept, which covers all online sectors.

According to the Gambling Law, a “virtual gambling venue” is understood to be “an information system, consisting of a website that allows use of the internet to organise and conduct gambling, to take part in games of chance, as well as software and hardware that ensure the collection, processing, storage and transmission, protection of information, audio-visual images and other results, the production of calculations related to the organisation and/or the carrying out of gambling using the internet”.

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 provided by the Code of Administrative Offences.

Criminal Code Offences

The Criminal Code provides for one key offence: business activity carried out without a special licence – this offence is also applicable to unlicensed gambling.

Offences of the Code of Administrative Offences

The Code of Administrative Offences provides, inter alia, for the following key offences:

  • organisation of gambling without the respective licence or organisation of gambling in violation of the conditions for carrying out such activities;
  • organisation of types of gambling that are prohibited;
  • use of the gambling equipment that is not connected to the special computer cash system – this system is intended to control the operators’ turnover (akin to the system of online monitoring in Ukraine discussed in the Ukraine Law and Practice chapter in this guide);
  • violations of the responsible gambling requirements (eg, admission of excluded individuals to the gambling venues); and
  • violations of AML requirements (eg, committing actions that do not allow the identification of individuals who receive funds from the gambling operator).

Possible penalties for gambling-related offences include imprisonment, confiscation of property, fines and revocation of licence.

In cases of imposition of criminal liability towards the gambling operator, key possible penalties include imprisonment for up to seven years.

As for administrative liability, penalties include fines of up to EUR11,000.

There is no information about any pending legislation in the gambling sector in Belarus.

According to the Gambling Law, the authority which is responsible for the regulation of gambling matters is the Ministry of Taxes and Duties of the Republic of Belarus or its regional units (the Regulator).

The general regulatory approach of the Regulator is rather strict due to the fact that the gambling regulation contains a number of strict requirements that apply to gambling operators. The Regulator conducts uncompromising actions in respect of the prevention of possible unlawful actions by gambling operators.

The list of licences is matched to the list of regulated activities under the Gambling Law:

  • land-based betting;
  • land-based slot-machine halls;
  • land-based casinos;
  • land-based totalisator; and
  • online gambling.

It should be additionally noted that the only legal entities that are eligible for obtaining an online gambling licence are the holders of land-based licences which have operated in the Belarusian gambling market for at least two years prior to obtaining the online licence.

Licences are readily available.

All types of licences are issued for an indefinite period of time.

Due to the fact that in order to obtain an online gambling licence the applicant should already have operated in the Belarusian gambling market for at least two years, the applicant for an online gambling licence has to comply with both sets of requirements: land-based and online.

Land-Based Licence Requirements

Key requirements to obtain any land-based licence are that:

  • the legal entity applying for a licence should be incorporated and act under the laws of Belarus;
  • the CEO or deputy CEO of the applicant should have at least three years of gambling industry experience as the CEO or deputy CEO of a legal entity in Belarus; and
  • the applicant should have premises that will be used as a gambling venue – such premises should either be owned or leased by the applicant and their compliance with the requirements applicable to the premises should be confirmed by the state prior to the application.

Online Licence Requirements

Key requirements to obtain any online licence are that:

  • the applicant should have had a land-based licence for two years already – please note that this licence should be “active” (ie, the relevant operator should conduct gambling business under that licence);
  • the applicant should deposit in a “special account” (one opened in a bank or non-bank credit and financial organisation of the Republic of Belarus) either EUR220,000 (for betting and totalisator) or EUR1 million (for other types of online gambling activities); and
  • the applicant should have a domain name registered under the Belarusian top-level domain (.by/.бел).

The online operators can operate under an international commercial domain (.com) provided that it is subject to the collection and storage of information by servers physically located in the Republic of Belarus.

This information must include gamblers’ logins, and gamblers’ personal identification as well the gambler’s IP address retrieved from the device used by the gambler for the online gambling, or other gambling actions.

Provided that the applicant submits all the required documents for the respective licence, the Regulator will issue the licence within the 25 business days from the moment of application.

Please also note that the licence fee is the same for each licence and amounts to EUR5,500. It is payable once upon application for a respective licence.

Belarusian law does not provide for any ongoing annual fees.

The Gambling Law prohibits the location of gambling venues:

  • at facilities the construction of which is not completed, in temporary buildings, under sheds and in other similar structures;
  • in capital structures (buildings, structures) in which educational institutions, state healthcare organisations, religious organisations are located;
  • in residential buildings, premises of state bodies, banks and non-bank credit and financial organisations, postal and telecommunications facilities, sanatoriums and health resorts, and cultural organisations; and
  • in physical culture and sports facilities (except for bookmakers and sweepstakes).

In addition, the Gambling Law also provides the special requirements for the minimum area of a premises where a casino or slot-machine hall can be located: 100 square metres for slot-machine halls and 250 square metres for casino premises.

The compliance of the premises with this set of requirements should be confirmed by the authorities. Upon inspection of the premises, the authorities issue a report regarding compliance of the premises with the provisions of the Belarusian regulations.

No recent changes have been introduced to the regulation of the land-based gaming sector. Furthermore, there is no information on any forthcoming changes to the land-based sector.

The Gambling Law establishes the only type of online B2C licence, which is an online gambling licence.

This licence covers all the gambling sectors mentioned in 2.1 Online.

This type of licence can be obtained only by licensed land-based operators who have already been operating for at least two years in the Belarusian gambling market.

To add more context, as of October 2020, only three gambling operators have obtained such a licence.

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.

A key development in the online gambling sector was introduced in 2018 by the Decree of the President of the Republic of Belarus. This Decree provided for the full-scale regulation of the online gambling sector.

Along with the introduction of the regulation of online gambling mentioned in 6.5 Recent or Forthcoming Changes, the Belarusian authorities have introduced a mechanism for blocking the websites of offshore gambling operators.

Starting from 1 April 2021, the websites of offshore gambling operators without respective local licences will be blocked by the authorities.

To add to that, current Belarusian law does not provide for any blocking of websites or financial blocking of transactions.

Belarusian 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.

Most of these measures should be taken by the gambling operators and have to be introduced into their terms and conditions. It is crucial to note that such terms and conditions are subject to approval by the Regulator.

Such measures may include:

  • mechanisms of self-exclusion; and
  • mechanisms of judicial exclusion.

The Gambling Law provides for the following main tools for responsible gambling.

  • Self-exclusion, which can be established for a term (from three months to three years); the excluded individual is included in a special register which is accessible by all licensed gambling operators.
  • Judicial exclusion is applied if an individual, as a result of participation in gambling, puts him or herself and/or his or her family in a “difficult financial situation”.

A judicially excluded individual can be excluded for a term of three months to three years. In addition, a petition for the judicial exclusion of an individual can be filed by their relatives.

Just as in self-exclusion, an individual who has been recognised as judicially excluded should be put in the special register accessible by all licensed gambling operators.

Judicial exclusion is also possible in cases where the individual is deemed to be a debtor and the court has issued injunctive measures in respect of that individual.

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).

As of October 2020, there are talks regarding amendment of the current AML legislative framework, which is aimed at establishing more strict regulation of the AML activities of gambling operators.

According to the AML Law, gambling operators should ensure that they do the following.

  • Implement a system of internal controls, which should include:
    1. policies regarding minimisation of risks associated with legalisation of the proceeds of crime, the financing of terrorist activities and financing the proliferation of weapons of mass destruction;
    2. policies regarding identification, documentary recording of suspicious financial transactions, financial transactions subject to special control, and timely submission of information and documents to the financial monitoring body (the threshold for all transactions of legal entities is set at EUR180000, the threshold for individuals is set at EUR18,000); and
    3. policies regarding the preparation and transmission of reports of financial transactions subject to special control and suspicious financial transactions by employees carrying out financial transactions.
  • Implement procedures for AML risk-handling, which should include:
    1. identification and assessment of risks associated with AML requirements, including the risk of working with a client;
    2. monitoring and control of risks associated with AML requirements; and
    3. limitation (reduction) of risks associated with AML requirements.
  • Identify players, which includes the gathering and storage of information in respect of suspicious transactions.

The Ministry of Anti-monopoly Regulation and Trade of the Republic of Belarus is responsible for the regulation of matters related to the advertising of gambling activities.

According to the Advertising Law, advertising is defined as “information about the advertised object, disseminated in any form by any means, aimed at drawing attention to the advertised object, generating or maintaining interest in it and (or) promoting it on the market”.

Belarusian 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 these restrictions, please see 9.4 Restrictions on Advertising.

Advertising law establishes certain requirements for the advertising of gambling, according to which it is prohibited to:

  • advertise gambling on TV and radio from 7am to 10pm;
  • place advertising in mass media targeted at people under the age of 18 or focused on ecology, education or healthcare;
  • place advertising in the buildings (premises, structures) of institutions/organisations involved in education healthcare, culture, physical education or sports (with the exception of the premises of betting shops and totalisators located on their territory);
  • create the impression that winnings are guaranteed for each participant in these events;
  • create the impression that participation in gambling is a way of earning a livelihood; and
  • involve underage persons (under 18) in the advertising materials.

Violation of the advertising regulations is punished by fines of up to EUR4,500.

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:

  • issuing gambling licences (including maintenance of the list of licensees);
  • establishing regulations regarding gambling activities;
  • conducting various inspections regarding the activities of gambling operators; and
  • control over the activities of gambling operators and ensuring their compliance with the Gambling Law.

The Regulator conducts inspections of licensed gambling operators. Such inspections are aimed to check the compliance of the gambling operators with the established licensing requirements or (and) the provisions of the gambling regulation.

In cases of breach of these 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. Moreover, if the gambling operator continues violating gambling regulations, the Regulator is entitled to revoke the issued licence.

In addition, the officers of gambling operators operating within the territory of the Republic of Belarus can hypothetically be subject to criminal liability, as it is forbidden to operate without the respective licence. Such activity may result in fines or imprisonment for up to two years.

Taking into account that financial penalties are considered as the result of the imposition of administrative or criminal liability, the method of enforcement is the same as for the sanctions mentioned in 11.2 Sanctions.

The concept of “social gaming” is not recognised by the Gambling Law and there are not any specific regulations for this activity.

The first substantive regulation of esports in the Republic of Belarus occurred at the end of 2017.

The president of the Republic of Belarus issued the Decree of the President of the Republic of Belarus No 8, dated 21 December 2017, "On the development of the digital economy", according to which residents of the Belarus Hi-Tech Park (which is a Belarusian analogue of Silicon Valley where the Belarusian authorities have established a more favourable tax and legal regime) are additionally granted the right to carry out activities in the field of esports in accordance with the established procedure, including:

  • preparation of esports teams;
  • organisation and implementation of competitions;
  • organising their broadcast; and
  • providing advertising services in the implementation of such activities.

The concept of “fantasy sports” is not recognised by the Gambling Law and there are not any specific regulations for this activity.

The concept of “skill gaming” is not recognised by the Gambling Law and there are not any specific regulations for this activity.

The president of the Republic of Belarus has issued the Decree of the President of the Republic of Belarus No 8, dated 21 December 2017, "On the development of the digital economy", which put Belarus in front in terms of blockchain regulations compared to other ex-USSR countries.

This Decree outlined the legal basis of concepts (and their regulation), such as blockchain, cryptocurrencies, tokens, mining and smart contracts.

Please see 1.2 Recent Changes.

Three main tax frameworks apply to online gambling operators in Belarus.

Gambling Tax

The rate for this tax is 4%. It is calculated on the basis of gross gaming revenue (GGR) and the number of gambling tables, slot machines and bookmaker’s offices.

Gambling Business Tax

The rate for this tax is 4% of "positive difference" minus "fixed tax", plus fixed tax, where:

  • positive difference is deemed to be the difference between all deposits made by the players (all money that came from the player to the operator’s bank account) and all withdrawals (all money that was taken out of the operator’s bank account and transferred to the players); and
  • fixed tax is calculated on the basis of the tax rates established for each piece of gambling equipment (eg, slot machines (fixed tax rate is approximately EUR100), bookmaker’s offices (fixed tax rate is approximately EUR700) or tote (fixed tax rate is approximately EUR1,000 per cashier).

Player Winnings Tax

The rate for this tax is 4%, the income tax base is winnings received by the player from the operator; the operator is responsible for withholding this tax.

E-VAT (Google Tax)

The rate for this tax is 20%. This tax is applicable where there are any goods imported to the territory of Belarus – for instance, if the parent company provides certain services to a Belarusian company (eg, platform, brand).

4H Agency

Georgiou Katsounotou 6
3036, Limassol
Cyprus

+7 915 353 34 08

im@4h.agency www.4h.agency
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Law and Practice

Authors



4H Agency is a boutique consulting firm fully dedicated to serving members of the gambling business ecosystem in their quest to open up new opportunities, be it a new market, a new vertical, or a new product. The firm's team members, who work in offices in Cyprus, Ukraine and Russia, have experience at the top international law firms as well as international gambling operators and service providers. Moreover, 4H Agency has an established network of various regional service providers and agents (local law firms, HR agencies and seasoned experts in different fields, including marketing and PR, payments and business analytics), which have been carefully chosen in order that 4H is able to act as a “one-stop shop” for international gambling operators entering certain jurisdictions.

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