The main legal act regulating gambling activities in Russia is the law “On state regulation of activities related to the organization and conduct of gambling,” which was adopted in 2006. More often this act is simply called the “law on gambling in Russia.”
The law consists of 3 chapters, which describe in detail the procedure for carrying out such activities, as well as the organization of various betting shops and bookmakers. Violation of the requirements of the above law and other legal acts regulating the field of gambling activities threatens the violator with administrative or criminal liability.
Conditions for criminal liability
In accordance with the Criminal Code of the Russian Federation, organizing gambling is punishable by penalties ranging from a fine to long-term imprisonment, depending on the circumstances of the violation.
So, for committing illegal gambling activities (the description of which is contained in the previous section) without qualifying signs, the violator in accordance with Part 1 of Art. 171.2 faces the following types of punishment:
- a fine of up to five hundred thousand or in the amount of earnings of up to 3 years preceding the punishment;
- compulsory work up to 240 hours;
- restriction of freedom up to 4 years;
- imprisonment for 2 years.
Did you know
Fines for illegal business vary depending on the severity of the crime. Thus, for filing an application for registration later than the deadline established by the Tax Code of the Russian Federation - a fine of 10,000 rubles, and for conducting activities without a license - from 40,000 to 50,000 for legal entities. You can read more about the financial liability of would-be businessmen on our website here
If the actions described in the first part were carried out by a group of people in conspiracy, or brought the criminal income in excess of one and a half million rubles, then the punishments will be more serious:
- fine up to one million rubles or earnings up to 5 years;
- imprisonment for up to four years with a fine of up to half a million rubles.
The third part of Article 171.2 of the Criminal Code of the Russian Federation for gambling provides for punishment for organized groups engaged in illegal gambling activities, either if such activities were carried out by a criminal using his official position, or brought him income in the amount of 6 million rubles or more:
- a fine of up to one and a half million rubles or in the amount of income for 5 years;
- imprisonment for up to 6 years with a fine of up to one million rubles.
Additionally, the court can also impose a punishment on the offender in the form of a ban on holding certain positions or engaging in specific activities for up to 5 years.
Commencement of application of Art. 54.1 NK
The concepts reflected in Resolution of the Plenum No. 53 and developed in established judicial practice, formed before the entry into force of Law No. 163-FZ, are not used within the framework of desk tax audits of tax returns (calculations) of taxpayers submitted to the tax authorities after the entry into force of the said law , as well as within the framework of conducting on-site tax audits and audits of the completeness of calculation and payment of taxes in connection with transactions between related parties, decisions on the appointment of which were made after the day the said law came into force .
Let us recall that the first sign of the use by the courts as an argument of Art. 54.1 of the Tax Code in favor of the taxpayer became the Resolution of the Thirteenth AAS dated September 13, 2017. in case No. A56-28927/2016.
Administrative liability of legal entities
Criminal penalties for illegal gambling activities apply only to individuals; legal entities are liable in accordance with the Administrative Code.
The disposition of Article 14.1.1 of the Code of Administrative Offenses sounds the same as the corresponding part of Article 171.2 of the Criminal Code of the Russian Federation. However, the administrative code provides for a different punishment. For violation of legislation in the field of gambling, legal entities face an administrative fine of 700 thousand to a million with confiscation of equipment used for gaming.
Did you know
There are only 4 gambling zones in Russia where gambling is not prohibited. They are located in the Altai, Primorsky, Krasnodar territories, as well as in the Kaliningrad region
Part 2 of Article 14.1.1 of the Code of Administrative Offenses contains punishment for gambling in bookmaker organizations and betting shops that have not received the appropriate licenses:
- for citizens – a fine of up to 4 thousand rubles with confiscation of equipment;
- for officials - a fine of 30 to 50 thousand rubles with deduction;
- for organizations – a fine of 500 thousand to 1 million rubles with deduction.
Under Part 3 of Article 14.1.1 of the Code of Administrative Offences, organizations that conduct games in a special gambling zone but violate the relevant permit, as well as bookmakers and sweepstakes that violate the requirements of the license, can be punished. In this case, legal entities face a fine of 300 to 500 thousand rubles.
If the license is grossly violated, the bookmaker or betting shop may be subject to a fine of half a million to a million rubles or suspension of their activities for 90 days.
General concepts and differences
So, according to the legislator’s definition, gambling is an agreement that is based on a certain risk, concluded between the participants in the game and the organizer, while the game can be carried out between the participants, but according to the rules established by the organizer. It is immediately worth noting that lotteries are not related to the topic under consideration. They belong to a type of cultural leisure and are regulated by Federal Law No. 138, according to which lotteries can only be state, all-Russian and international.
If we discard all the terms and explain it in a language that is understandable to everyone, lotteries are not prohibited, because part of the prize funds always goes either to charitable needs or to support socially significant activities in the state. As for the topic directly under consideration, the legal conditions for carrying out this activity are established in Federal Law No. 244 “On state regulation of activities related to the organization and conduct of gambling and on amendments to certain legislative acts of the Russian Federation.”
Online casino
We should talk about this type of gambling activity in more detail, since there are now a huge number of different resources on the Internet with slot machines and roulettes, card games, and game currency in the form of real money. Such establishments are regulated by the same regulations as physical casinos, but have a wider range of criminal opportunities.
In fact, anyone with basic knowledge of working with a computer can create their own resource, place roulette tools there and attract users with a large percentage of winnings. Without a license, such resources can “tweak” the machines, cheat when distributing cards, that is, use any tricks just to attract users and get more money from them. There are more than a hundred active Russian-language casino sites alone, and all of them are freely accessible, despite the constant blocking of domains by government regulatory authorities.
Actually, in most cases, other than blocking, the state cannot do anything, since if the organizer is registered or located outside the territory of the Russian Federation, then in fact it is not possible to bring him to justice, due to the fact that in some countries such a business is either completely legal or allowed with reservations. Therefore, such resources operate on legal grounds for their country, which leaves no options for law enforcement agencies of the Russian Federation other than a banal ban on the territory of the country.
Online casino
Internet gambling laws vary from country to country.
In the first group of countries, no permission is needed to organize an online casino, in the second, a license is required, and in the third (which includes Russia) such activities are prohibited.
In the Russian Federation, conducting gambling activities outside special zones, including on the Internet, is illegal. If the creators of such sites are located in the Russian Federation, they can be held liable under Art. 171.2 of the Criminal Code. But if a site is created on the territory of a state in which such activities are permitted, then our legislation requires Internet providers to prohibit access to such a site.
From 53 to 54.1
Previously, when conducting audits, tax authorities were guided by Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 12, 2006 N 53 “On the assessment by arbitration courts of the validity of the taxpayer receiving a tax benefit.”
Article 54.1 of the Tax Code is a new approach to the problem of taxpayers’ abuse of their rights, taking into account the main aspects of established judicial practice.
The essence of the changes is that the legislator has defined specific actions of the taxpayer, which are recognized as abuse of rights, and the conditions that must be met by the taxpayer in order to be able to take into account expenses and claim tax deductions for transactions that have taken place.
At the same time, the principle of the presumption of good faith of the taxpayer remains in force.
Investigation of cases of illegal organization and conduct of gambling
During the investigation of cases of illegal gambling business, the investigative team must establish the following points:
- availability of information about gambling;
- use of special equipment necessary for the games;
- using the Internet or other information communications for the purpose of organizing an online casino;
- the organizers of gambling games do not have a license to conduct them in the gambling zone.
So how does it all happen?
- First of all, operatives try to find out the method of committing the illegal act and the methods by which the attackers tried to hide their tracks. Next, the motives and goals of criminal activity, the amount of income from it, as well as the identities of the criminals are established.
- The operation to expose the organizers of underground casinos begins with surveillance. Employees monitor establishments that are suspicious and collect facts.
- Next, attempts are made to identify the persons who organized the gambling.
- Having collected enough information, employees make an imaginary transaction in order to check the mechanism of the organization.
- At the last stage, the documentation is checked and the equipment used for the games is examined.
- After identifying criminal activity, witnesses, victims and accused are interviewed, examinations, investigative experiments and confrontations are carried out.
Next, we will look at some court decisions of the Russian Federation on the verdict “illegal organization and conduct of gambling.”
Is it possible to avoid punishment
Judicial practice in dealing with cases in the gambling business is disappointing. As a rule, prosecutors seek the maximum allowable sentence and only the presence of mitigating circumstances can reduce the amount of sanctions. In order to protect your interests in court, you need to be sufficiently versed in Russian legislation and know judicial practice.
If you lack knowledge in the legal field, the only correct option is to contact a qualified specialist. The lawyer guarantees a thorough study of the case and all the circumstances that make it possible to mitigate the punishment; in the event of an unfair accusation, the client has every chance to save his reputation and win the trial.
13.05.2019
Collection of evidence
What mechanisms should tax authorities use to refute the reality of a controversial transaction:
- obtaining explanations from persons who have information about the circumstances of the conclusion, completion, execution of a transaction (operation);
- conducting inspections of territories, premises, documents, objects using technical means;
- comparison of the volume of goods supplied to the size of warehouse premises (territories);
- property inventory;
- analysis and reconstruction of the full balance sheet of the enterprise (commodity balance, warehouse accounting, etc.);
- requesting documents (information), and, in necessary cases, confiscating documents (items), conducting examinations, and others;
- surveys of officials of the taxpayer being audited;
- requesting documents (information) from customers and interrogating their officials, persons exercising technical supervision;
- identifying other, “non-problematic” counterparties that provide similar work and services to the taxpayer, followed by carrying out control measures against them;
- study of local acts on the establishment of access control for protected objects, passes, registration logs.
The use of formal document flow for the purpose of illegally accounting for expenses and claiming tax deductions may be evidenced by the facts of cashing out funds by the audited taxpayer or an interdependent (controlled) person, as well as the facts of the use of such funds for the needs of the taxpayer, the founders of the taxpayer, its officials, the use of the same IP addresses , detection of seals and documentation of the counterparty on the territory (premises) of the taxpayer being inspected and others.
As part of the study of financial flows, tax authorities must take into account that the transfer of funds when carrying out transactions with a problematic counterparty, as a rule, is carried out in order to fully or partially return them to the taxpayer, an interdependent (controlled) person in cash, non-cash form, in the form of securities or in kind. The Federal Tax Service recommends that inspectors pay attention to the atypical nature of the document flow and the discrepancy between the behavior of the parties to the transaction and the usual business practices. For all such facts, it is necessary to obtain explanations from the taxpayer and responsible persons, and if information is received that contradicts the testimony of witnesses or the evidence collected, it is necessary to ensure that explanations from the taxpayer and responsible persons are received again on the identified contradictions.
When conducting interrogations of persons listed as signers of primary documents, tax authorities may confiscate handwriting samples for further handwriting examination.
At the same time, paragraph 3 of Art. 54. The Tax Code of the Russian Federation provides for several criteria that cannot independently serve as a basis for filing tax claims:
- signing of primary accounting documents by an unidentified or unauthorized person;
- violation of tax laws by the counterparty;
- the possibility of the taxpayer obtaining the same result of economic activity when performing other transactions (operations) not prohibited by law.
These criteria are enshrined in Art. 54. 1 of the Tax Code of the Russian Federation in order to exclude the possibility of tax authorities filing formal claims against taxpayers
