Bloomberg News

Russia Urged to Eliminate Private Lotteries in Ministry Proposal

December 04, 2012

Russia should consider leaving the federal government as the only operator of lotteries to generate more revenue for socially important spending, according to the Economy Ministry.

Lotteries are widely being used as a cover for covert gambling activity, and the government’s “uncontrolled issuance” of licenses to conduct them has generated little in revenue, the ministry in Moscow said today in an e-mailed statement. Many draws are also “extremely non-transparent” in distributing revenue to the social causes they were registered to benefit, according to the statement.

Russia has banned most gambling, outlawing casinos and slot-machine parlors in 2009, and established four far-flung zones across the country for development as gambling areas. While there are no official data for the volume of the lottery business in Russia, it may be worth at least $400 million to $500 million a year, the ministry said, citing analysts.

“In our opinion, Russia’s legislation must be overhauled in the shortest possible time,” the ministry said in the statement.

Russia’s tax service has issued 4,000 licenses to conduct lotteries since 2005, Vedomosti reported yesterday. First Deputy Prime Minister Igor Shuvalov ordered the Finance and Economy Ministries last month to draft legislation that would only permit nationwide lotteries approved by the government, the newspaper reported.

The Economy Ministry estimated that the budget may earn as much as 10 billion rubles ($324 million) a year in additional revenue, Vedomosti said, citing an unidentified government official.

The federal government now oversees three lotteries, one run by the Finance Ministry, one by the Sports Ministry, and a third by the Defense Ministry’s construction agency, according to the Economy Ministry proposals.

To contact the reporter on this story: Scott Rose in Moscow at

To contact the editor responsible for this story: Balazs Penz at

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