The Kyrgyz Casino Industry: Features and Prospects

After a long-term ban, the sector is not just coming out of the shadows but also becoming one of the most promising tools for economic recovery.

The deputies Dastanbek Dzhumabekov and Baktybek Turusbekov became the promoters of the bill. In January 2021, the document was submitted to the law-making body for approval, and in April, the adoption of this bill was supported by a majority of votes of the Jogorku Kenesh.

What format will the industry development have, and what should investors expect? Experts of Win Win Casino will tell you everything about the prerequisites to the legalisation of this sector and its current state.

The company's specialists are ready to provide their assistance in supporting your business project at all stages of its development. To order the service, please contact our managers!

About the Kyrgyz Gambling Market

Offline gambling halls in this country have become a dime a dozen since the early 90s. Moreover, the sector was an uncontrollably developed shadow economy.

The situation became critical in the early 2000s: almost the entire population of the country had signs of gambling addiction. The state machinery solved this problem radically. In 2012, cards, slot machines, and other types of gambling entertainment were strictly prohibited.

However, poker has escaped persecution — the game received the status of an intellectual sports discipline.

In 2015, the government terminated the last casino permits. All betting shops, sweepstakes, and bingo clubs in Kyrgyzstan were closed. The only entertainment that remained was the lottery but it was controlled by the state.

In 2016, an attempt to reopen legal land-based casinos was made but neither the government nor the public supported it.

Formation of a New Legal Market

The legislative initiative to legalise the industry was approved on April 21, 2021. This decision was supported by 68 votes.

The government will create special closed zones, following the example of the United States and Russia.

Issyk Kul and the Tamchy airport were chosen as a restricted area. It will cover ​​1,200 hectares and include 7 independent hotels. Each of them will have a separate licence.

An interesting feature is that in order to control the work of casinos in Tamchy, the government plans to introduce special legal and tax schemes that are relevant only for this territory. In other sections of the republic, these amendments will not be valid.

The president has spoken in support of the bill and expressed the hope that it will help the government to fix the falling economy. According to Sadyr Japarov, the launch of casino projects in Issyk Kul is a door-opener to the full-scale legalisation of the described sector and attraction of investments to every administrative district of the country.

On April 26, 2021, the president offered to open casinos throughout the republic. It was also said in the interview that in the case of mass public protests, Sadyr Japarov will use his veto right and call a halt to the development program of the sector.

Many experts believe that such a decision can “pour” into the economy from 10 to 50 million dollars annually and give residents of the republic 10–12 thousand workplaces.

Prospects for the industry development have long been proven by the world’s experience:

• Nevada, the United States, brings over 900 million dollars annually;
• the total annual revenue of American casinos — 93 billion dollars;
• Macau, the Chinese gambling zone, brings about 190 million dollars to the local treasury;
• the annual revenue of the Georgian company, Adjarabet, is over 80 million dollars;
• restricted gambling areas in Russia bring about 100 million rubles annually.

More Detailed Information about the Kyrgyz Gambling Zone

Currently, a controlling structure for casinos is being actively developed. However, some aspects of the work of future casinos are already known.

Excerpts from the legislative initiative
Special exchange system	Offline locations in Tamchy will work with any currencies without the obligatory conversion into local money. As it is planned, payments will be made in any format that is convenient for operators
Visa-free arrangement	Access will be allowed only for foreigners (adults) who have passports. The reservation will have a simplified visa-free regime. The only exception is people with dual citizenship: they cannot gamble under any circumstances (for example, residents of the Republic of Kyrgyzstan and Russia)
Market orientedness	In Issyk Kul, operators will have a right to offer any slots, table games, and roulette. The bill does not mention the legalisation of the activity of betting shops, and the lottery business will remain a state monopoly
Tax liability	All entrepreneurs that will work in Kyrgyzstan will have to pay 40% of their income

Requirements for the Licensees

Those entrepreneurs who want to work in Tamchy are recommended to pay attention to the following requirements:

1. A mandatory contribution to the hotel industry. The parliament has adopted the Ukrainian program. Operators will be able to open a casino in Kyrgyzstan if they invest money in the construction of 5-star hotel complexes.
2. Local registration. The enterprise must have legal registration in the republic. Moreover, the company management must consist of the residents (10% of managers or shareholders or more).
3. Provision of workplaces. There must be 50% of locals in the staff of a gambling establishment.
4. Transparent reserve fund. The amount for the construction of the facility, as well as internal and reserve accounts of the company, should be opened in local banks. Entrepreneurs are obliged to work under state financial control and provide evidence of the legal origin of the investment.
5. Visit control. Locals (except for staff members) must not enter the restricted area. Compliance with the legal order will be monitored by the operators themselves and by local law enforcement agencies.

Investment Perspectives in the Kyrgyz Gambling Reservation

The global practice shows that about 70% of tourists prefer to visit places with gambling clubs when they are choosing a country where they leave for vacation.

The legalisation of casinos will attract additional investments to the local treasury and make the maximisation of the development of the tourist infrastructure possible.

The state machinery offers gambling entrepreneurs:

• a stable political situation;
• many tourist zones;
• a loyal tax rate;
• a simplified exchange system;
• a constant increase in foreign customers from those countries where casino entertainment is strictly prohibited.

The Main Things about the Kyrgyz Market

Advantages and features of the Kyrgyz gambling sector:

• Close cooperation with the tourism sphere. The creation of this restricted area will maximise the development of the tourism and hotel spheres. Businessmen should be ready to invest in the construction of 5-star hotels.
• Special operating mode. The zone can be visited only if you have a passport and are more than 21 years old. Payments in the casino will take place without a mandatory conversion to local currency.
• Limited access. The reservation is closed to the locals (except for staff and law enforcement agencies). Issyk Kul will obey several legislative norms that are not valid in other sections of the country.

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