The lower legislative house of the Russian Federation, State Duma, has made the first step toward the tougher tax regime on gambling.
Russian lawmakers have approved a draft bill on its first reading, paving the way for an increase of the tax levy on gaming tables and machines.
Maximizing the Levy
According to available information, the bill would substantially increase the current top levy from $2,100 to $4,200 per gaming table, with the maximum tax levy on gaming machines also doubling – from $125 to $250.
In order to actually go into effect and become a law, the latest proposal needs to pass additional three reading in the country's lower house. The second one was held last Friday.
If the bill manages to pass all the reading, it will still need the approval and the signature of the Russian President Vladimir Putin to come into effect.
Reactions From the Market
The reactions from the companies operating in the Russian market vary, while some of them, like Summit Ascent Holdings which operates Tigre De Cristal casino in Artem, wonder whether the changes could be enforced if the bill becomes the law.
The representatives of the company said it was too early for the board of directors to predict what would happen. Summit Ascent also stated it had held talks with the authorities of the Primorsky Krai regarding the questions of the tax rates.
The regional government promised it would do all in its power to keep the tax rates unchanged should the new legislative proposal got adopted.
A little over a month ago, the government confirmed its intention to gradually increase gaming taxes in the next couple of years. The taxes will be doubled from January 1, 2018, with further increases to follow gradually until 2020, increasing the gambling tax rates by 10 times.
At this time, land-based operators in the country don't pay any taxes on their gaming revenue. Instead, they pay flat fees for gaming tables and machines on their premises.
Gambling taxes in Russia haven't changed since 2004.