Kyrgyz Casino Permit: Become a Participant of the Promising Market

The country has decided to reform the internal economic market, shifting the focus from mining and energy to the services sector. And the first step was the legalisation of casino entertainment.

We will be glad to tell you how the local gambling business will be regulated, how much a local licence costs, and what benefits it provides to operators.

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Kyrgyz Market: Nascent Stages

The history of local casino sector began with the recognition of the republic's independence and developed in the following way:

Rapid Growth

As soon as the country resigned from the Union, private gambling enterprises began to appear literally at every step. The development of the industry was not controlled by the government and was chaotic.

Gambling halls with slot machines, sweepstakes, and betting shops were working almost round-the-clock, and among the local population, many people became addicted.

Government Control

The first action of the authorities that was taken to regulate the niche was the recognition of poker as a sport (in 2009).

Since 2011, various inspections and the fight against illegal operators have been organised. Casinos and other gambling locations were massively closed across the country. By 2012, there was not a single legally operating institution in the country.

In 2015, an amendment to the law that banned the industry was adopted. It is related to the betting business. The last licences were revoked from sports operators, and by the end of the year, the business ceased to exist.

Lotteries became the only entertainment available to the local population. But it was monopolised and completely controlled by the Cabinet of Ministers and the Ministry of Finance.

Attempts to Reactivate the Market

Attempts to legalise the industry have been undertaken by activists since 2012 but have not received support from either the government or the local population.

In 2016, a legislative initiative was discussed to open a special reservation similar to the gambling zones in Russia. The regulator even selected and prepared the territory for the future gambling sector ― a former US military base near the Manas airport.

The bill was rejected due to a number of factors, including its physical proximity to the capital, the negative attitude of the public, and the government's unwillingness to reform the country's current economic and legal framework.

Innovations of 2021

The second discussion of the bill on the legalisation of the industry took place in 2020.

After the economic depression, the government was forced to find new sources of replenishment of the public treasury. Casino licensing in the country was recognised by the deputies as one of the most promising options.

Baktybek Turusbekov and Dastanbek Dzhumabekov were involved in the creation of the bill. The initiative was sent to parliament in early 2021 and this time, it not only successfully passed the first reading but also received the support of the head of state.

According to the initiators of the reform, the licensing procedure has the following advantages:

• more than 100 thousand new workplaces;
• annual budget revenue in the amount of at least 7 million dollars;
• a strong boon for the development of tourism.

In most neighbouring countries, casino entertainment remains under the ban, so the legalisation of this market will give Kyrgyzstan not only additional economic influence in the region but also provide a stable tourist flow.

The President of the Republic expressed his approval and stated that he had already introduced an amendment that will allow future casinos to be opened not only in the Issyk-Kul reservation but also in all major administrative centres.

The head of state assured that he will veto the bill if the population is against this reform.

The local permit will become an effective economic instrument as soon as the bill passes 2 more readings in parliament and is signed by the president.

Structure of the Future Gambling Niche

The legal structure of the future market will be hybrid. The business models of Russia and Ukraine were used as a basis:

1. Special zone. It is not allowed to open gambling clubs outside the Issyk-Kul region. This market structure has already proven itself well in Russia.
2. Interaction with the tourism industry. Following the example of Ukraine, the acquisition of the Kyrgyz permit can be possible only for those entrepreneurs who are willing to finance the construction and further development of resort infrastructure (it will definitely attract foreign tourists).

The reservation territory was chosen for a reason. The largest deep-water lake in the country is located in the Issyk-Kul region, and tourist mountain trails are within a walking distance.

The region is considered one of the most popular resorts and has enormous economic potential. Moreover, there is an opportunity to adapt the territory to work with foreign traffic already now: in the administrative centre of Tamchy, there is a regular international airport.

The future gambling resort will be constructed on 1,200 hectares of land. According to the bill, 7 autonomous objects will operate on the reservation and the related infrastructure will be equipped: it will include restaurants, recreation areas, tourist trails, etc.

To make the local licence as attractive for investors as it is only possible, the regulator is planning to develop a special legal structure with tax remissions and much more.

Promoters of the bill offered:

1. Multi-currency mode. Holders of the Kyrgyz licence will be able to work with any currency without its mandatory conversion into local money. The payment method will be established upon a mutual agreement of the parties.
2. Visa-free program. Those tourists who decide to visit the Issyk-Kul reservation will not need a temporary registration. To enter casinos, it will be enough to show an international passport.
3. The age limit. The restricted area must be visited only by adult foreigners over the age of 21. The control will be ensured by operators and local law enforcement agencies.
4. Visit control. Offline and online casinos licenced in Kyrgyzstan will only accept foreign audiences. The local population and persons with dual citizenship will not be able to gamble.
5. Affordable advertising. Investors will have an opportunity not only to open licensed online casinos but also freely promote services using land-based and network advertising, including banners, flyers, etc.
6. Financial program. The distribution of income will be the following: 60% of the proceeds ― in the operators’ favour, 40% ― in the favour of the state treasury. It will include the permit maintenance costs and tax duties.

Acquisition of the Permit

It will be possible to enter the market only after purchasing the necessary permit. The activity of entrepreneurs with offshore certificates will be banned at the domestic level.

How Much Does the Kyrgyz Casino License Cost?

Based on the current tax structure and the basic provisions of the gambling bill of April 2021, it can be assumed that tax rates will be the following:

1. Licence cost. Presumably, the certification of each of the gambling objects will cost 1.5 million dollars or more. The price of a permit that will allow you to work in the digital segment is not specified. But there is information that it is possible to resell the sublicence to partner companies.
2. Annual maintenance. The compulsory annual payment for working in the land-based segment will be about 13.3 thousand dollars. The maintenance of a bookmaker's office or sweepstakes will cost approximately 1.8 thousand dollars per year.
3. Equipment tariff. For each unit of equipment, including consoles, multi-rooms, and self-service terminals, operators will have to pay about 590 dollars. There is no information on the minimum amount of hardware equipment for gambling halls.
4. Pension contributions. It is mandatory to deduct to the pension fund up to 27.5% for each full-time employee: 10% from the salaries staff and 17.25% from commercial accounts of the enterprise.

The Main Things about the Local Casino Industry

• The casino business will help to restore the country's economy. The legislative initiative is intended to shift the focus from mining and energy to the gambling sector. The estimated annual payments to the public budget will be about 7 million dollars.
• The casino industry will closely cooperate with the tourism market. The reservation will open on the territory of the most popular resort in the country. Investors will have to pay not only for the purchase of certified software but also for the construction of resort and entertainment complexes.
• The Kyrgyz gambling reservation will only accept foreign traffic. To attract tourists, a visa-free regime and multicurrency settlement programs are provided. Locals and people with dual citizenship are prohibited from visiting gambling clubs.
• Holders of permits will be able to distribute the document. To buy a turnkey casino with the Kyrgyz permit and enter the market under an already promoted company name, it is enough to conclude an agreement with a reliable developer and provide the necessary documents.

We will not only show you how to obtain the local permit with minimal risks but also take care of all organisational issues.

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