Kazakhstan’s bumpy road to legislative reform

Garance Limouzy 2 weeks ago
Kazakhstan’s bumpy road to legislative reform

In Kazakhstan, public servants, military personnel, and heads of state organisations are now prohibited from gambling, following a new law signed by President Kassym-Jomart Tokayev. However, this decision is just one aspect of a broader proposed legislative reform that has not yet been fully voted into law. Other facets of the reform have stirred up debate and controversy, involving instances of lobbying, whistle-blowing, and allegations of wrongful political arrests.

Excluding public servants

The newly signed law, aimed at combating gambling addiction within the country, affects approximately 280,000 public servants. Additionally, the law prohibits gambling for debtors, encompassing a group of 3.5 million people.

“The list of persons for whom gambling and betting is prohibited has been expanded. Those included in the register of debtors were added to the list. Gambling is prohibited for public servants, military personnel, workers of special and law enforcement agencies, and heads of public sector organisations. Failure to comply with the law will lead to dismissal,” reported the press service of Akorda, the presidential palace.

According to the new law, Telecom operators are now forbidden from sending gambling-related advertisements. Advertising for betting offices and casinos is restricted, with fines of 200,000 Kazakhstani tenge ($416) for violations. Unlicensed foreign bookies, lotteries, and online casinos are banned, and organisers of online casinos face up to two years in prison. The minimum age for betting has been raised to 21.

The BAC controversy: who is going to control the gambling market?

Kazakhstan’s gambling market, which dates back to the Soviet era, became highly restricted with its first set of regulations introduced in 2017. The newly adopted law is part of broader legislative reforms efforts, and was first introduced in 2020 as a public health bill.

Notably, the proposed reform includes the creation of the Betting Account Center (BAC), operated by private companies, which will oversee the betting market. The BAC would control resource allocation, production, and sales, determine market players, and collect 1.5% of all profits. The creation of such an entity has sparked extensive debate in Parliament due to concerns about potential abuse and corruption. Given the profitability of the gambling market, 1.5% of all profit represents a substantial sum: the betting industry in Kazakhstan is expected to generate $500 million by 2025.

In 2020, Kazakh Vice Minister of Culture Saken Musaybekov resigned after being caught accepting bribes from lobbyists representing two opaque private companies, Exirius LLP and PayBox. These companies aimed to push the law on the Betting Account Center (BAC) and to be selected to manage all BAC functions.

Former Vice Minister of Culture, Saken Musaybekov

Opponents of the BAC law reportedly face pressure to remain silent and risk retaliation if they speak out. For instance, the owners of the independent bookmaking company Olimp were arrested after holding a press conference to oppose the BAC’s introduction. While the government accuses them of being part of organised crime syndicates, they assert that they are being targeted for whistle-blowing.

Despite the controversy, the BAC, reborn and renamed the Unified Accounting System (UAS), remains part of the new draft law. These amendments passed their first and second readings in Parliament in June and are awaiting presidential signature.

Fighting addiction in Kazakhstan

Kazakhstan’s government reports that over 350,000 people, including many minors, are involved in gambling, representing nearly 2% of the population. The government aims to halve this number in the coming years. According to the Interior Ministry, each of these gamblers carry an average debt of 10 million Kazakhstani tenge ($20,083).

“Compulsive gambling brings untold misery, destroying thousands of families, pushing many into crime. Day after day there is news of people getting into debt because of gambling and taking their own lives. This addiction causes great harm to the young generation; online gambling is turning into an everyday leisure activity for children,” stated President Tokayev.

Law reform is not the government’s only tool in combating problem gambling. In February 2024, authorities dismantled the largest network of illegal online casinos, seizing over $1 million and 20 weapons, and detaining 400 people. Additionally, the government has begun implementing medical treatment for problem gamblers, with a budget for combating gambling addiction exceeding 80 million Kazakhstani tenge ($166,641).

WHAT’S NEXT: SiGMA East Europe Summit powered by Soft2Bet, happening in Budapest from 2 – 4 September.

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