Illegal gambling worries Russia: FIFA World Cup
Illegal gambling worries Russia: FIFA World Cup

Moscow: At least a billion dollars a year are believed to be pouring into offshore accounts of Russian shell companies linked to just one semi-legal but blossoming industry: online gambling.

This poses a new challenge for Russia as it prepares to host the 2018 World Cup in June and July -- the country has already been plagued for decades by allegations of match-fixing in its domestic football.

No one expects illicit betting to play a role on the pitch when football's most celebrated competition kicks off in 100 days. But it represents another dark corner of Russia's economy that the authorities have struggled to police.

"The total turnover volume of the legal and offshore online bookmaking market is more than two billion dollars (1.6 billion euros) a year," Anton Rozhkovsky, the director of the government-mandated TsUPIS online betting payment system, told AFP.

"We do not pretend to know if the actual figure is $2.5 billion or four billion dollars. Around 70 percent of that is illegal, offshore business," said Rozhkovsky.

Pent-up demand for organised gambling was unleashed with the collapse of the Soviet Union and led to glitzy casinos and seedy slot machine halls opening across Russia. They skirted paying taxes but were not strictly illegal.

The government tried to impose order by shutting them all down in 2009 and allowing bookies to open sport betting shops that instantly gravitated toward football.

Improved internet access pushed most of these punters online and produced a legal vacuum filled by scores of anonymous websites with no licences but burgeoning business.

Russia's Bookmakers Rating gambling analysis centre pegged the entire industry's annual turnover at $11.8 billion in May 2017, 65 percent of it made in illegal online bets.

It also expected the market to triple in the next five years thanks to high-profile events such as the World Cup. Bettors going the legal route are required to pay a tax and submit identity papers in person with both TsUPIS and each bookie they use. The laborious process can take weeks and is simply evaded by illegal websites appearing under the .com rather than Russia's national .ru domain.