Gambling industry in the regions: additional tax on the poor

Belarusian gambling industry started developing when Russia introduced a moratorium on casinos in 2009. However, gambling industry is not developing coherently. The only recent trend is expansion of slot machines clubs’ network.

Gambling business is growing constantly. Slot machines make up 96.3% of the total number of taxable objects, gaming tables – 2% and cash bookmakers – 1.7%. Slot machines number in Belarus in 2013 increased by 8.8% (10,200). Local authorities also attempt to engage in the business. In early 2013 Capital Construction Department at Vitebsk Oblast Executive Committee announced a tender for the purchase of nine slot machines for BYR 150 million. Documents say the machines were meant for installation at the Ice Sports Palace in Orcha. The equipment is due for shipment by late July and is funded from the local budget.

However, the environment for the gaming industry in Belarus is not extremely favourable. For example, since 2011, 3 casinos were closed in Grodno, Slonim and Smorgon – due to tighter gambling rules.

Majority of gambling tourists go to Minsk. In the regions, gambling is rather an additional ‘tax on the poor’. Potentially, in the future gambling business could become an important source of local proceeds. But it requires infrastructure development (hotel industry and services), further development of gambling infrastructure and taxation simplification.

In Belarus, as of April 1^st, 2013 128 businesses had a gambling license. There are 35 casinos (19 of them in Minsk), 279 slot machines clubs and 156 bookmaker shops.

In 2012 gambling business accounted for BYR 238 billion in tax revenues to the budget or 0.2% of all tax revenues.

Gambling spots exist in over 50 localities all over the country, including several rural villages and towns. The greatest number of casinos is in Minsk (19), Gomel (5), Brest (4), Mogilev (3) and Grodno (2).

Current tax rates on gambling business (per taxable unit) are as follows: Euro 3500 – per one gambling table in Minsk casino with up to ten tables; Euro 3,000 – per one gambling table in one of the regional centers’ casinos.