Kazakhstan gambling market: what’s legal?
In 2017, Kazakhstan gambling celebrated an anniversary, 10 years after becoming legal. In January 2007, the President of Kazakhstan signed the law aimed to legalize and regulate the gambling industry. Right after the “North” and the “South” gambling zones started functioning. One is located in the Shuchinskiy district (Akmola region) and the other is in the Kapchagai reservoir coast (Almaty region).
In October 2017, the draft law was created foreseeing the formation of the third gambling zone in the Mangystau region and the ICBC “Khorgos”.
The two working gambling zones currently unite 13 licensed land-based casinos. The slot machines, bets and bookmaker’s offices are also legal. However, the online casinos are banned.
At the same time, almost all the definitions listed in the law can be interpreted in two ways. For instance, the online casino definition is the following: “…the gambling venue using the hardware and software suite located in the Republic of Kazakhstan… ”. This basically means you may run an online casino if the server is located in another country.
How do local operators work?
Since the gambling market became officially legalized, every operator in Kazakhstan has two options: either to work obeying all the laws or to operate an online casino with the server in another country and work using the law contradictions in one’s favor.
Then again, the market players witness that almost all the land-based casinos in Kazakhstan belong to Russians and not the Kazakhstani. The major part of the “black market” is controlled by individuals from Uzbekistan. This is where the paradox rests: you can open a casino, it’s legal, but the market niche is already taken by the foreigners.
How do local gamblers play?
All the gamblers in Kazakhstan can be divided into two groups: the first one is prosperous middle-aged high rollers preferring to play in land-based casinos to get their adrenaline shots, and the second one is players preferring to spend/lose less in online casinos.
Considering the fact that online casinos aren’t restricted if the server is located in another country, local gamblers can choose basically any website they’d like to play on (and they obviously do).
One of the most popular games here is an online poker. From October 4th to October 15th 2017, Borovoe has hosted Eurasian Poker Tour. The largest poker tournament series guarantee in the history of Kazakhstan with the $850,000 in prize money confirmed.
What makes the Kazakhstan gambling market different?
- Bookmakers’ offices and totalizators can be located only in the non-residential premises. It’s prohibited to use the non-residential parts of the living accommodations, industrial premises, storages, and municipal premises. So, it’s very hard for the operator to find a proper business location.
- The hardware and software suite must be located in the Republic of Kazakhstan. If not, the operator will not get the license. All the financial transactions exceeding the ₸ 3,000,000 (a shade under $9,000) must be reported to the Financial Control Committee.
- Most of the casinos are bought out by foreign investors.
- The lottery business is super popular in Kazakhstan. Up to 2016, when the government passed the law regulating this part of the gambling industry, almost everyone could profit off of lotteries. Frequently operators converted lottery machines into illegal slot machines. Since the law was passed, the Kazakhstan government has been licensing lottery operators but depriving them of their right to run another type of business.
- The gambling zones in Kazakhstan never changed the location. This fact allows the operators to invest into the gambling industry without any fear. In other countries gambling zones could be closed or relocated (e.g. the “Azov-City” gambling zone in Russia is about to be closed).
- Unlike gambling zones in some other countries, the gambling zones in Kazakhstan are located not far away from the major cities Almaty and Astana. As a result, the land-based casinos are always full of players.
Kazakhstan gambling market prospects
The Kazakhstan government is not planning to give up on the plum money that gambling industry brings to the budget every year. That’s why the country may open the third gambling zone in the nearest future. Plus the famous Steve Wynn invested in the unique casino-resort called Tengri Resort (the construction has already started).
There’s a chance that more casinos will appear in Kenderly, as several Iranian companies are willing to invest in it. Such an enthusiasm is easy to explain: the flight from Teheran to Kenderly will take about an hour, so the Iranian tourists will definitely prefer a casino in Kazakhstan over the Turkish or UAE alternatives.
The other factors encouraging investors from all over the world to invest in gambling market in Kazakhstan include cheap licenses and the persistently high number of players.
At the same time, Kazakhstan is attractive for online casino operators. Considering the fact that online casinos in this country are beyond the pale, thousands of users are still looking for a trustworthy quality gambling provider. A perfect combo for the operators willing to drive extra business.
Has nothing changed?
It is May 2021, and as of today, according to Kazakhstan’s Ministry of Culture, more than 200 sportsbook operators have obtained a gaming license. There are thousands of betting offices operating in the country, and yet online casinos remain illegal, which causes Kazakh players to register on foreign platforms, where they can successfully deposit and withdraw funds.
Experts agree that the industry needs regulation. Some of the proposed examples include the USA, where banks are not allowed to process gambling-related transactions, Singapore, which punishes not only organizers but also players, and China with its radical solution in the form of the Great Firewall. Everyone understands that the market has to leave the gray zone, but nothing has been done so far.
Some hopes were raised by the Law No. 356-VI of 2 July 2020. However, its final version only contained numerous changes and amendments to the existing legislative acts and did not introduce new regulations.
Gambling activities are still regulated by the law adopted in 2007, which has more restrictive clauses than permissions. We can only hope that Kazakhstan will follow Ukraine’s path and Kazakh legislators will opt for liberalization rather than toughening penalties for illegal gambling operations.