On State Regulation of Gaming Business (Draft Russian law)
Duma
FEDERAL LAW
On State Regulation of Gaming Business
Chapter 1. General Points
Article 1: Subject of Regulation by this Federal Law
1. This federal law defines a legal basis for state regulation of gaming business in the RF and establishes restrictions to gaming business in order to protect morality, rights and legal interests of the citizens.
2. This federal law does not cover organization and carrying out of lotteries, so as activities connected with the use of slot machines with no money wins.
Article 2: Legislation for State Regulation of Gaming Business
1. Legislation for State Regulation of Gaming Business is conducted by the RF Civil Code, this Federal Law and other federal laws.
2. Legal regulation of gaming business can be conducted by norms and legal documents adopted in accordance with this Federal Law.
Article 3: State Regulation of Gaming Operation
1. State regulation of gaming operation is carried out in the following way:
– by establishing compulsory obligations for gaming operators, gaming houses, visitors of gaming houses (zones) and to the order of carrying out gaming operation and compliance with appropriate restrictions;
– by providing special territories for running of gaming business;
– by issuing permits for opening of new gaming houses on specially provided territories;
– by prohibiting, finding and ceasing activities of the individuals who run gaming business with a violation of the current gaming business legislation.
2. State regulation of gaming business in accordance with this Federal Law is carried out by the government of the RF, by its authorized federal body of executive power, other executive bodies within the limits of their jurisdiction, as well as by state bodies in the RF subjects/regions.
Article 4: Main Definitions Used in this Federal Law
For the purpose of this Federal Law the following definitions are used:
– A casino game – an agreement about a win based on risk, which is concluded between/among two or several game participants with each other or with the game organizer/operator in accordance with the rules established by the game organizer;
– A bet – a casino game, where an outcome of the agreement based on risk between participants with each other or with the bet organizer, depends on an event, which may not occur;
– A stake – money being passed by a game participant to the game organizer/operator or to another game participant, which is a condition for participating in the game against the rules established by the game organizer/operator;
– A win – money that is due to be paid to a game participant, after game results are known, that is in accordance with the rules established by the game organizer/operator;
– A game organizer – a person who runs gaming operation;
– Gaming operation – operation aimed at conclusion of based on risk win agreements between two or several game participants;
– gaming zones – parts of RF territories intended for running of gaming operation, boundaries of which are set up in accordance with this federal law;
– populated gaming zones – gaming zones located in populated areas;
– special gaming zones – gaming zones located outside populated areas;
– a permit for opening a gaming house in a populated gaming zone – a document issued by an authorized body of executive power in accordance with this Federal Law, that gives the right to a gaming operator to carry out gaming operation in one gaming house on the territory of one populated gaming zone;
– a permit for carrying out gaming operation in a special gaming zone – a document issued by an authorized federal body of executive power in accordance with this Federal Law, that gives the right to a gaming operator to carry out gaming operation on the territory of one special gaming zone with no restrictions in quantity or kinds/types of gaming houses;
– a game participant – an individual, participating in game, who has concluded an agreement based on risk with the game organizer or with another game participant;
– a gaming house – a building (or its separate/independent part), in which gaming operation is carried out, so as its accompanying services;
– a casino – a gaming facility, in which gaming operation is carried out with the use of gaming tables or with the use of both gaming tables and other gaming equipment specified by this Federal Law;
– a slot area – a gaming facility, in which slot operation is carried out with the use of slot machines and other equipment specified by this law;
– a bookmaker shop – a gaming facility or its part, in which the gaming facility organizer arranges a conclusion of bets between participants participating in that kind games;
– a totalizer – a gaming facility or its part, in which the gaming facility organizer arranges a conclusion of bets between participants participating in that kind of games;
– gaming equipment – devices or facilities used for carrying out casino games;
– a gaming table – gaming equipment that represents a place/facility with one or several gaming areas/fields, with the aid of which the game organizer/operator provides a facility for game participants to play between themselves or participates in the game through its representatives;
– a slot machine- game equipment (mechanical, electrical, electronic or other technical equipment) that is used in the games with money wins defined at random by a device installed inside the body of this game equipment, without involvement of the game organizer/operator or its representatives;
– a bookmaker cash desk – part of gaming facility, where the game organizer/operator concludes bets with appropriate participants, which is equipped with special equipment allowing to register bets, define game results and pay wins;
– a totalizer cash desk – part of gaming facility, where the game organizer/operator concludes bets with appropriate participants, which is equipped with special equipment allowing to register bets, define game results and pay wins;
– a casino cash desk – part of gaming facility in which the game organizer/operator carries out money transactions and which is equipped with a special equipment allowing to carry out the indicated transactions;
– a public area – part of a gaming house equipped with gaming equipment, a cash desk, a totalizer cash desk, a bookmaker cash desk and other equipment in the use of game participants (players);
– a staff area – separate part of a gaming house, where game participants (players) are not allowed to come in to, and which is used by the game organizer/operator for the purpose of own business;
– accompanying services – hotel services, F&B; services, theatrical shows, concerts, other staged shows and spectacular or entertaining events.
Article 5: Restrictions on gaming operation
1. Gaming operation can be carried out by gaming operators only under the condition that they comply with the requirements set up by this Federal law, other federal laws or legal norms.
2. Gaming operation can be carried out only in the casinos opened in compliance with the requirements stipulated by this Federal law, other federal laws or legal norms.
3. Gaming operation with the use of information and telecommunication networks, including the Internet and means of connection, including mobile, is prohibited/forbidden.
4. Gaming houses can be open only on the territory of gaming zones in accordance with the order established by this federal law.
5. Gaming organizers/operators having a permit for opening of a casino in a populated gaming zone have no right to run gaming business on the territories of special gaming zones.
6. Gaming operators having a permit for operating gaming business in a special gaming zone have no right to run gaming business on the territories of populated gaming zones.
Article 6: Quantity of gaming zones
1. On the territory of the RF there can be functioning no more than four gaming zones at the same time.
2. The restrictions established by this Article in regard with total number of gaming zones are applicable regardless to kinds/types of created gaming zones or their locations.
Article 7: Requirements to gaming operators
1. Gaming organizers/operators must be only those legal bodies/entities, which are registered in the RF in accordance with the established order.
2. Gaming organizer’s/operator’s net assets must worth no less than 600 million roubles.
3. Gaming organizers/operators can not be legal bodies/entities, shareholders of which is the RF, RF subjects/regions or local authorities.
4. Gaming organizer/operator must provide the following information according to the order established by the RF government:
– about the fact of opening/closing of a casino;
– about actual profit collector who receives profit from gaming operation;
– about net assets;
– about casino parameters (casino type, number of sq.meters in the casino, number of square meters in the staff area, numbers and type of gaming equipment);
– about established gaming rules.
Gaming organizer/operator must notify duly about any changes in the given information.
5. A gaming organizer/operator must guarantee security of players, staff and other visitors of the gaming house while they are being inside.
6. A gaming organizer/operator must comply with the rules established by the RF government related to handling with cash in gaming houses.
Article 8: Requirements to Gaming House Customers
1. Customers of a gaming house (zone) are game participants or other people who are being present in the gaming house (zone) and who are allowed admission in accordance with this RF law.
2. Customers of a gaming house (zone) can not be those below 18 years old.
3. A gaming organizer/operator has the right to establish own attendance rules that are not in contradiction with this Federal Law.
4. On demand of gaming organizer’s/operator’s staff a customer, violating attendance rules established by the gaming house, must leave the gaming house immediately.
Article 9: General Requirements to a Gaming House
1. A gaming house can be located only in buildings of solid construction and occupy the whole building or a separate section of such building.
2. A gaming house must have a public area to service game participants and a staff area.
3. In a place available for customers’ view there must be displayed this federal law, a list with rules established by the gaming organizer/operator and a gaming permit.
4. Gaming operation must be carried out only by staff employed by the gaming organizer/operator. The employees must be over 18 years old.
5. Gaming equipment used in the gaming house must comply with established technical requirements and standards and be owned by the gaming operator. In the gaming house there must be available documents confirming compliance of the gaming equipment with requirements.
6. Casino can not be located in the following buildings:
– Residential buildings, kiosks, tents and/or other similar places;
– In the buildings accommodating kindergartens, schools, other educational institutions, –hospitals or sanatoriums;
– In bus stations, railway stations, ports, airports etc;
– In sports/health places (except for totalizors);
– In the premises of organizations, business/activities of which is not related to gaming business;
– In the buildings owned by the State or authorities;
– In the buildings having religious organizations.
– Apart from that, casinos can not be located on the land on which there are located the above buildings.
7. Local authorities have the right to establish additional requirements to locatien of casinos.
8. Gaming organizer/operator has the right to open a gaming house as from the date written on the gaming permit and operate it till the indicated expiry date.
Chapter 2 – Populated gaming zones
Article 10: Creation and liquidation of populated gaming zones
1. The RF government makes a decision on creation or liquidation of populated gaming zones by the approval of RF subjects/regions or local authorities.
2. In the decision on creation of a populated gaming zone there must be established its boundaries, name and validity period.
3. The validity period of a populated gaming zone can not be less than 10 years and it can be extended. A decision on liquidation of a populated gaming zone can not be taken before its current validity period is expired.
Article 11: A permit for opening a gaming house in a populated gaming zone
1. A permit for opening a gaming house in a populated gaming zone gives the right to a gaming organizer/operator to run gaming business in one gaming house.
2. A permit for opening a gaming house in a populated gaming zone is issued by a local authority representing an appropriate federal body against an application made by the gaming organizer/operator.
To the application form there must be attached notarized copies of company foundation documents, so as documents containing the following information:
– about actual profit collectors receiving profit from gaming operation;
– about available permits for carrying out gaming operation on the territory of populated gaming zones or special gaming zones;
– about gaming organizer’s/operator’s net assets;
– about proposed/expected gaming house parameters (type of gaming house, size of public area, size of staff area, quantity and types of gaming equipment) stipulated in this Federal Law;
– about expected/proposed gaming rules.
3. The application must be considered by an authorized federal body of executive power in no later than 30 days since receiving. The grounds in refusal of considering an application can only be incompliance with the positions started in the point 2 of this article or not paying a state fee for consideration of the application.
4. A permit for opening a gaming house is valid for 5 years. On a permit for opening a gaming house there should be put an opening date, a license expire date, a name of a populated gaming zone.
A gaming organizer/operator can be refused in giving a permit for opening of a gaming house exceptionally in the cases when given/provided documents contain wrong information, or a state fee has not been paid or if the gaming organizer/operator has a permit to operate on the territory of a special gaming zone.
5. A gaming organizer/operator can apply for extension of gaming operation for 5 more years but this can not exceed the validity period of the populated gaming zone.
A gaming organizer/operator can be refused in renewal of its gaming permit only in the cases stated in the point 5 of this Article.
6. The state fee/charge to be paid for consideration, issuing or extension of a gaming permit must be paid in accordance with the RF Tax Code.
7. A permit for opening a gaming house can be cancelled by a local federal body of executive power in the following cases:
– company liquidation in accordance with the established order;
– incompliance with the requirements established by this Federal Law;
– if a gaming organizer/operator has violated the established order for operating gaming business, which is including carrying out of gaming operation outside populated gaming zones on the territory of special gaming zones;
– in case a gaming organizer/operator has received a permit for carrying out gaming business on the territory of a special gaming zone by providing an appropriate application.
A state fee paid for issuing or renewal of a voided/cancelled permit is not subject to returning.
8. A form for applying or renewal of a gaming permit, so as the order of the application consideration, is established by the government of the RF in accordance with the points of this Federal Law.
9. A decision about refusal or cancellation of a gaming permit can be appealed at the court in accordance with the established order.
Article 12. Requirements to certain types of gaming houses opened on the territory of populated gaming zones
1. Casino public area can not be less than 800 square meters and it must accommodate a casino cash desk, a wardrobe, a place for rest of casino customers and a toilet room.
The casino public area must accommodate no less than 10 gaming tables, also there can be put slot machines, totalizor cash desks and/or bookmaker facilities. Gaming tables and slot machines installed in the casino must be owned by the gaming organizer/operator.
Staff area should accommodate a rest room for staff, a specially equipped place for taking, issuing and temporarily keeping of money and a place for casino security.
If a casino has slot machines than it must comply with the requirements stipulated in the point 2 of this Article.
2. A slot area in the casino can not be less than 100 square meters and must accommodate a cash desk and a toilet room.
In the public slot area there must be no less than 50 slot machines, there can also be totalizor cash desks and/or bookmaker facilities.
In the slot area’s staff area there must be a specially equipped place for taking, issuing and temporarily keeping of money.
Slot machines installed in a slot area must be owned by the gaming organizer/operator. Average win % technically input in a slot machine can not be less than 80%.
3. In bookmaker’s public area there must be a bookmaker cash desk and it also can accommodate a totalizor cash desk.
The operator of a bookmaker shop must provide a facility for collection, registration and processing of bets with the aid of special equipment and a facility for paying wins.
The operator of a bookmaker shop can self define events, on which bet results depend, except for the cases established by federal laws.
These points are applied to bookmaker cash desks situated in casinos and in slot areas.
4. In the totalizor public area there must be put a totalizor cash desk.
The operator of a totalizor must provide a facility with special equipment for collection, registration and processing of bets and for paying of wins.
The operator of a totalizor must provide a facility with special equipment for customers for watching development and results of events, on which there depends a bet result.
These points are applied to totalizor cash desks situated in casinos, slot areas and in bookmaker shops.
Chapter 3: Special gaming zones
Article13: Creation and liquidation of special gaming zones
1. The RF government makes a decision on creation or liquidation of special gaming zones by the approval of RF subjects/regions or local authorities.
2. In the decision on creation of a special gaming zone there must be established its boundaries, name and validity period. The validity period of a special gaming zone can not be less than 10 years and it can be extended.
3. In a decision about creation of a special gaming zone there can be established requirements to certain types of gaming houses, so as other restrictions stipulated in the Chapter 2 of this Federal law for gaming houses situated on the territories of populated gaming zones.
Article 14: Administration/management of special gaming zones
1. Administration/management of special gaming zones is carried out by an authorized federal body of executive power and its local authorities (hereinafter referred to as “administration bodies for special gaming zones”).
2. Gaming organizers/operators operating in special gaming zones have the right to create non-commercial organizations, tasks of which will be organization of cooperation between the gaming organizers/operators and the administration of the special gaming zone, so as with bodies of state power and local authorities (hereinafter referred to as “associations of gaming organizers/operators”).
3. Part of functions related to management of special gaming zones can be passed over to the associations of gaming organizers/operators on the basis of an agreement, which must be signed in accordance with the order established by the government of the RF.
Article 15: Criteria for selection of land for creation of special gaming zones
1. At the time of creation of a special gaming zone, the land that forms its territory can not be owned by citizens or legal bodies/entities, except for the land that is given for accommodation and use of engineering infrastructure.
2. At the moment of creation of a special gaming zone on the land forming its territory there must be situated only objects/facilities that are owned by the state or local authorities and not owned by citizens or legal bodies/entities except for objects/facilities of transport or engineering infrastructure.
Article 16: Use of land under special gaming zones
1. The land and/or objects situated on it (except for engineering and transport infrastructure) must be rented by gaming organizers/operators or other.
2. Handing over of land for rent is carried out by an authorized federal body of executive power in the order established by the RF Land Code.
Article 17: A permit for operating gaming business in a special gaming zone
1. A permit allowing for operating gaming business in a special gaming zone gives the right to a gaming organizer/operator to run gaming business on the whole territory of the special gaming zone under the condition that all established requirements and restrictions are followed.
2. A gaming permit for operation in a special gaming zone is issued by the administration of the appropriate gaming zone on the grounds of an application made by the gaming organizer/operator.
To the application form there must be attached notarized copies of company foundation documents, so as documents containing the following information:
– about actual profit collectors (those who receive profit from gaming operation);
– about availability of a permit to carry out gaming operation on the territory of other special gaming zones or populated gaming zones;
– about gaming organizer’s/operator’s net assets;
– about expected/proposed gaming house parameters (type of gaming house, size of public area, size of staff area, quantity and types of gaming equipment) stipulated in this Federal Law;
– about expected/proposed gaming rules.
3. The application must be considered by the gaming zone administration in no later than 30 days since receiving. A reason for refusal in consideration of the application can only be incompliance with the positions started in the point 2 of this article or not paying a state fee for consideration of the application.
4. A permit for carrying out gaming operation in a special gaming zone is valid for 5 years. On such permit there must be a date from which the gaming organizer/operator can start its business, a license expire date and a name of the special gaming zone, where such business can be run.
A gaming organizer/operator can be refused in giving a permit for operating in a special gaming zone exceptionally in the cases when given/provided documents contain wrong information, or a state fee has not been paid or if the gaming organizer/operator has a permit for opening a gaming house on the territory of a populated gaming zone.
5. By application of a gaming organizer/operator the validity period of a permit for operating gaming operation in a special gaming zone, can be extended for another 5 years, but this can’t go over the validity time of the special gaming zone.
A gaming organizer/operator can be refused in renewal of its permit for operating in a special gaming zone only in the cases stipulated in the point 7 of this Article.
6. The state fee/charge for consideration, issuing or extension of a permit for operation in a special zone must be paid in accordance with the RF Tax Code.
7. A permit for operating gaming business in a special gaming zone can be cancelled by the administration of the special gaming zone in the following cases:
– company liquidation in accordance with the established order;
– incompliance with the requirements established by this Federal Law;
– if a gaming organizer/operator has violated the order of carrying out gaming operation, which is including such violations as operating gaming business outside the special gaming zone or on the territory of a populated gaming zone;
If a gaming organizer/operator has violated the established order of providing information or provided wrong information;
– in case a gaming organizer/operator has received a permit for opening a gaming house on the territory of a populated gaming zone against provided application;
The state fee paid for issuing or renewal of a voided/cancelled permit is not subject to returning.
8. A form for applying or renewal of a gaming permit, so as the order of application consideration, is established by the government of the RF in accordance with the points stipulated in this Federal Law.
9. A decision about refusal or cancellation of a permit for operating in a special gaming zone can be appealed at the court in accordance with the established order.
Article 18. Conclusive points
1. This law comes in its legal force on January 1st 2007.
2. Gaming houses, under the condition that they are in compliance with the requirements stipulated in the articles 5,7,9 and 12 of this Federal Law, have the right to carry on with their operation without getting either kind of permit until December 31st 2008.
For appropriate license holders validity time on the licenses issued before the introduction of this law will be extended till December 31st, 2008 regardless to the day put on the license.
3. Operation of those gaming houses, that do not comply with the articles 5,7,9 and 12 of this law, must be stopped before July 1st 2007.
4. Special gaming zones must be created before July 1st 2007. Gaming houses not having permits for opening a gaming house on the territory of a populated gaming zone or a permit for operating business in a special gaming zone must stop their operation before January 1st 2009.
5. Within 6 months after the introduction of this law, the RF government must work out legal norms and regulations necessary for implementation of this law.
President of the Russian Federation
