Kazakhstan gambling market: regulation, prospects, and special aspects

Oct 24, 2017 Artyom Ustinov

Being the second largest and the 4th most populated CIS country, Kazakhstan is a dreamland for all the gambling market industry players. If you’re thinking of this country as a potential market for your business, read this post to the very end: we’ll talk about all the special aspects it currently has.

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.

Artyom Ustinov

Artyom is Head of White Label & Turnkey Solutions and has been working in complex B2B/B2C sales, as well as business development and management consulting in iGaming for more than 10 years.

Together with the Key Account Management Team, he has helped over 100 start-ups and experienced gaming companies to launch their projects with SoftGamings.

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