Kazakhstan draft law could “worsen” gambling sector

Kazakhstan’s fintech and gambling sectors have raised their eyebrows at a new proposed law affecting both industries in the Central Asian nation. 

The concerns were brought forward to the media by the Kazakhstan Fair Gambling Campaign, which “advocates for fair and balanced gambling laws”. 

According to the initiative, the draft legislature wants the implementation of a Unified Accounting System (UAS) to regulate and process payments, including in gambling, while ‘doing nothing to enhance transaction security or protect consumers’. 

The entity’s commission tax collection has been capped at 1.5% – for a market that makes around 1.2trn tenge (US $2.6bn) every year from regulated transactions.

2023 and 2024, the Kazakh government proposed new centralized controls, such as the UAS, to adopt tighter surveillance of consumers engaging in gambling activities – an order was mandated by President Kassym-Jomart Tokayev. 

Parallels have been drawn between the proposed law and the short-lived Kazakhstan Betting Accounting Center (BAC) proposal, which was withdrawn back in 2021 in connection with bribe allegations where a former Vice Minister had taken payments from a pro-BAC lobby. 

Comments were made on the matter by Irina Davidenko, member of the Kazakh Association of Payment Organisations, who accused the Majilis (Lower Parliament House) of rushing to include the amendment in the second reading of the bill without at any point consulting the Kazakhstan National Bank. 

“I think everyone is aware of a similar story from a few years ago. It was called the Betting Accounting Center, where it was also supposed to monopolise and transfer functions to a private monopolist – a laying firm along the lines of the “ROP Operator”, i.e. both partially bookmakers and payment organisations,” Davidenko said. 

“This idea was criticised, it became public that this change was adopted in violation of regulations. Now we are again faced with a similar situation, which worsens the market situation. And this is despite the fact that the general course taken by the state says that it is necessary to get rid of private intermediaries and lay organisations.”

Davidenko remained confident that the proposal is in direct violation of the rights of payment organisations and banks as it allows for the creation of an ‘artificial monopoly’ that will ‘significantly redistribute’ the market share of regulated payments in the country. 

The same sentiment is also shared by the Kazakhstan Fair Gambling Campaign, which stated that there has been “little transparency” about the structure and ownership of the UAS.