During a session of the Mazhilis, a draft law «On Amending and Supplementing Certain Legislative Acts of the Republic of Kazakhstan on Gambling, Lotteries, and Lottery Activities» was adopted in the first reading. Preparation for the second reading is underway, and there are still many unresolved issues here.

Unfortunately, the state still does not understand how to cut off the oxygen to illegal foreign companies in the gambling sphere, which operate with impunity on the Kaznet and provoke mass gambling addiction. Following the speeches at the Mazhilis session, it became evident that these illegal online casinos, lottery operators, bookmakers, and internet roulettes are currently the main sore point in the regulation of the gambling sphere in Kazakhstan.

The main speaker on the issue of illegal gambling business in Kazakhstan was Deputy Elnur Baysenbayev, who oversees the working group on the draft law «On Gambling Business». He pointed out, in particular, that over a trillion tenge is withdrawn from the country annually through illegal gambling business.

The speaker emphasized that gambling addiction in the country is growing at alarming rates precisely because of illegal online gambling structures, the websites of which are accessible to literally anyone, even children. Identification of clients of illegal online casinos, their age verification is not carried out, as a result, minors — teenagers and children are involved in gambling, emphasized Baysenbayev.

The deputy gave an illustrative example: a resident of the Almaty region reported that her two underage children became gambling addicts because of online casinos. The problem turned out to be so serious that the family had to resort to the services of psychologists for the rehabilitation of the «overplayed» teenagers.

Several thousand illegal gambling websites are blocked in the country annually, however, new ones immediately open in their place. The key issue is blocking the movement of funds to these illegal entities. Gambling operations are massively disguised as other types of activities (MCC codes are substituted). For example, bets are reflected in reporting as payment for taxis, delivery of goods, construction, payment for restaurants, repairs, and other services,

noted Baysenbayev.

The most attention during the discussion was drawn to the question of how to block payments to illegal foreign operators of the gambling business. Deputy Ekaterina Smyshlyaeva noted that there is already a ban on providing payment services to foreign operators of the gambling business in the current legislation.

However, the latter easily bypass this ban, in particular, by using the services of dummy payment organizations in Kazakhstan. As a result, players can easily place bets on prohibited sites, as the funds are transferred to such a payment organization, which then transfers the funds abroad through certain schemes.

Also, as already noted, substitution of MCC codes is practiced, when, for example, payments in an online store or payments for restaurant services are reflected in the reporting, while in reality, the amounts of bets are transferred to illegal foreign operators in the gambling sphere.

According to the Financial Monitoring Agency, more than 40 illegal online gambling platforms were liquidated in the past year 2023 and in the first quarter of this year, and more than 5700 websites and accounts were blocked.

As a representative of the National Bank of Kazakhstan noted, to correct this situation, it is envisaged, in particular, to notify banks within 5 days from the date of updating the list of prohibited entities that payments to organizations included in this list are prohibited.

The issue of the responsibility of payment organizations that, seeking to earn money, cooperate with illegal foreign gambling businesses is also being worked out. In addition, the National Bank has already initiated separate amendments to the legislation regarding the responsibility of businesses for substituting MCC codes that deceive the state.

Deputies also asked representatives of the AFM, the National Bank, and the Ministry of Tourism and Sports how they plan to further block illegal gambling platforms on the Internet if a new site opens within hours of each closed site — the so-called «mirror». This question, apparently, remains one of the technically most complex.

And here it is worth recalling the initiative of the Self-Regulatory Organization of Bookmakers (SRO) of Kazakhstan, which was left without attention during the discussion, to introduce a «white» register instead of the current «black» register of illegal organizations in the gambling sphere — that is, a list that will include only licensed legal entities in the gambling business of Kazakhstan.

It will be easy to take such a list as a basis — it has long been available to relevant government agencies. In this case, blocking illegal gambling organizations and prohibiting all financial transactions with them will become much easier: any entity not included in the «white» list will automatically be considered illegal and immediately blocked. Perhaps this proposal from the business side will be further analyzed in working groups during the preparation for the second reading.

As summarized by the head of the relevant committee of the Mazhilis, Asqat Aymagambetov, during further work on the draft law and its preparation for the second reading, everything must be done to solve the problem of the illegal gambling industry. Moreover, as he noted, the deputy corps should deal with this together with the legal, licensed gambling business operating in the country.

The main problem that has not been solved so far is the difficulties with blocking foreign online casinos. No matter how many sites we block, even if it’s 100 a day, 100 new illegal sites will open every day in return. Moreover, as far as it is known, 100 new illegal sites can even be opened every hour. There is currently no solution to counter this.

In addition, the illegal business has learned to manipulate data. Funds paid to foreign casinos are transferred using other MCC codes. Since online betting funds are transferred under the guise of payments to online stores, pharmacies, taxi payments, and other unrelated purposes, it is very difficult to identify and block them today.

Therefore, banks and payment organizations need a new, strict, and clear regulatory framework. Within the framework of the draft law, we have already taken steps to improve control quality, improve tracking procedures, and implement necessary adjustments.

Undoubtedly, we will continue to discuss this issue further, because combating illegal operations in the gambling business is currently our weakest point. In addition, it is necessary to give a clear legal definition to the problem of gambling addiction.

The proposal of Deputy Mageramov to introduce a presumption of non-agreement to gambling requires the most careful consideration. We will also continue this work with the relevant ministries and experts. Overall, before the second reading, we will have to work out all these issues in the most detailed way, summarized Asqat Aymagambetov.