Kazakh President signs law to curb gambling addiction

Kazakh President Kassym-Jomart Tokayev on Monday signed a law introducing new regulations on the gambling industry, aimed at reducing gambling addiction among the population, according to Kazinform News Agency.

The legislation, titled "Law of the Republic of Kazakhstan on the introduction of changes and additions to some legislative acts regarding gambling business, lottery activity, health, state labor inspection, state control and avoiding unnecessary legal regulations," introduces both restrictive and incentive measures to address gambling addiction.

The signing of this law follows the passage of a controversial bill in the Kazakh parliament, the Mazhilis, reports The Diplomat. The bill, which has faced significant opposition from the betting industry, was agreed upon before the end of the parliamentary session on June 5, 2024.

The bill outlines the creation of a new regulatory body, the Unified Accounting System (UAS), which will control all monetary operations in the betting market and take up to 1.5 percent of all betting transactions. The UAS, once operational, will act as a de facto monopoly in the Kazakh betting market, a move that has sparked concerns about market competition and regulatory transparency, as per local media.

Critics argue that the introduction of the UAS will concentrate regulatory power in an unknown entity, leading to potential corruption and unfair market practices. The rapid passage of the bill has raised alarms about the lack of regulatory scrutiny and the bypassing of due legal procedures.

Kazakh Vice Minister of Tourism and Sports Miras Tulebayev and Ruslan Arysbekovich Berdenov, a member of the committee of finance and budget of the Mazhilis, supported the bill's expedited process but were unable to provide details on the selection and operations of the new regulator, says The Diplomat.

The Association of Bookmakers of Kazakhstan has filed a lawsuit against Deputy Berdenov for his role in the last-minute introduction of the regulator. Additionally, the National Association of Fintech and Payment Processing Companies in Kazakhstan has publicly opposed the legislation, with spokesperson Irina Davidenko stating: "The proposed legislation would be a step backwards for Kazakhstan, harming competition in the country’s vital payments sector."

The draft law, officially known as "Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Gambling, Lotteries and Lottery Activities," has been under consideration since January 2020. The law's journey has been marred by corruption concerns, including the dismissal of a former vice minister of culture for accepting bribes from pro-regulator lobbyists.

The creation of the UAS echoes previous attempts to consolidate regulatory power in strategic sectors, potentially undermining President Tokayev's anti-corruption reforms. As the new regulator takes charge, concerns about monopolistic practices and income disparity are likely to persist, potentially impacting the broader development trajectory of Kazakhstan.

The law will come into effect 60 days after its first official publication.