Extension control over the lottery and gambling companies

article 16/09/2020

The significant changes to the Laws «On Lotteries» and «On State regulation of activities to organize and conduct gambling, and amending certain legislative acts of the Russian Federation» were made by two Laws No. 242-FZ of 20.07.2020 and No. 270-FZ of 31.07.2020.

In general, the amendments reinforce the requirements to the lottery and gambling companies.

Thus, the lottery companies are now obligated to disclose information not only to the lottery organizers, but also to the State supervisory authorities. Among such information is data on:

  • beneficial owners,
  • individuals and legal entities, which are shareholders or members of the lottery and gambling companies,
  • members of the board of directors or the supervisory board,
  • executive board members,
  • persons serving as single executive body,
  • persons who have significant, direct or indirect influence on the decisions of corporate bodies

and also the documents confirming the above information.

The term «beneficial owners» corresponds to the relevant description defined by the Federal Law No. 115-FZ of 07.08.2001 «On Countering money laundering and the financing of terrorism». Thus, the beneficial owners of the lottery and gambling companies are understood to be individuals who ultimately, directly or indirectly, or through third parties, own (i.e. have more than 25% of share capital) a legal entity or have the ability to control its activities.

The ban on acting as a shareholder, member, beneficial owner, member of the board of directors or the supervisory board, executive board member, single executive body of the lottery and gambling companies is set for persons who have outstanding criminal records for financial crimes, crimes against the state authorities or for intentional crimes of medium gravity, serious and the gravest crimes.

Among legal entities which cannot act as shareholders and members, persons with significant, direct or indirect influence on the decisions, single executive bodies of the lottery and gambling companies are legal entities registered in the states or territories with the preferential taxation or territories that do not disclose information on financial transactions (offshore zones) and included in the list approved by the Ministry of Finance of the Russian Federation.

The amendments will come into force on October 19, 2020.

Besides, the list of events with the possibility of accepting bets by bookmakers and betting houses will be cut. The requirements for equipment in service areas of the bookmaker's offices, betting houses, their processing centers and the service areas for gambling participants have been tightened. The specifics of suspension and revocation of licenses on organization and conduction of gambling at bookmaker's offices or betting houses are clarified. Such licenses should be reissued until September 29, 2021, i.e. within 1 year from the date of entry into force of the Federal Law No. 270-FZ of 31.07.2020.

Gambling organizers, which make bets on sports events in the bookmaker’s offices, are required to make purpose-oriented allocations to invest the development of children's and youth sports. The basis for these allocations are agreements on provision of information about conducting sport competitions with professional sport entities, which, in turn, are required to post the list of concluded agreements, data on received funds in the form of purpose-oriented allocations from gambling in the reporting calendar year and data on allocation of funds on the official websites.

All information related to the lottery and gambling companies (including historical data) is available in the Information and Analytical system Globas.