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Uzbekistan legalizes betting and online gambling!

The gambling market in Uzbekistan was officially prohibited in 2007. The prohibition of gambling was strongly influenced by religion.

The issue of the legalization of betting has been raised in Uzbekistan for many years. In December 2019, the President signed a Decree on the legalization of betting shops, but in April 2022 this decision was reconsidered. In response to ongoing discussions, the President, in April 2023, called for the development of a regulatory framework for betting, tasking various governmental bodies including the National Capital Markets Agency, the Ministry of Finance, the Ministry of Sports, and the National Agency of Perspective Projects with this initiative.

Seventeen years after the initial prohibition, a new decree was signed by the President in 2023 to legalize betting and online gambling effective from January 1, 2025.

As mentioned in the Decree, the decision to legalize betting and online gambling was based on the increased interest of the population in gambling and the presence of offshore operators in the market. This decision was motivated by the growing interest among the population and the presence of offshore operators. It was noted that Uzbekistan had been losing approximately US$50,000,000 annually due to unregulated gambling markets. Furthermore, gambling offenses have seen a significant increase, escalating from 1,454 incidents in 2019 to 3,372 in 2021, with 2,325 incidents reported in the first half of 2022 alone.

In addition to the legalization of betting and online gambling, the Decree mentions the taxation of these gambling verticals for the next 5 years (from 2025 to 2030). The tax base is GGR and the tax rate is 4%. Also, players will not pay tax on winnings.

The National Agency of Perspective Projects will be the state regulator. The Decree doesn't specifically regulate the cost and terms for obtaining a license. The National Agency of Perspective Projects determines the licensing procedure for betting and online gambling operators. In addition, the state authority should prepare the relevant legislation related to betting and online gambling in two months. Important to note, that the National Agency of Perspective Projects in the process of preparing relevant legislation should research the best practices of gambling regulation in other countries.

Individuals over 18 years of age (both residents and non-residents of the Republic of Uzbekistan) will be able to participate in betting and online gambling. Such a restriction on the age of participation will avoid the involvement of minors in gambling.

The decree remains ambiguous about whether the market will be open to new operators or restricted by a state monopoly. The decree remains ambiguous about whether the market will be open to new operators or restricted by a state monopoly.

The National Agency of Perspective Projects emphasizes that the measures in the decree aim primarily to protect citizens' rights and interests, prevent gambling addiction, and stop the financial outflow from unregulated gambling.

From our perspective, this legislative change is a positive development. The existing offshore gambling market in Uzbekistan has been operating without paying taxes or regulatory oversight, contributing to increased gambling addiction and the involvement of minors. Legalizing betting and online gambling is expected to generate additional revenue for the state budget, which could be reinvested in other projects.

We are quite curious to see how this attempt at legalization will unfold itself, particularly considering hints at the legalization of online casino verticals (that are made by the words “risk-based games”) that were earlier frowned upon by the government.

However, the history of gambling legalization in Uzbekistan (mentioned above) shows that the signing of this Decree is not a final decision. It is necessary to wait for the government to adopt the relevant legislation (which will be prepared by the National Agency of Perspective Projects) that will regulate betting activities and online gambling, it seems that it will become quite clear whether or not this attempt will bear any fruits.