A sweeping crackdown
The parliament of Armenia passed a law today at first hearing that imposes widespread restrictions on gambling. The bill aims to reduce problem gambling among Armenians, for many of whom it is a national pastime. The restrictions are to come into effect in November 2020.
The law bans bookmakers, casinos, and gaming machines across the whole country, except in the four small towns of Meghri, Tsakhkadzor, Servan, and Jermuk. The numbers of gambling premises in these towns will be limited.
Gamblers will need to be at least 21 years old once the law comes into force. The current age limit is 18. There will be tougher penalties for licensed gambling operators caught permitting underage gambling. The law also reduces the amount of cash a bettor can place on a wager.
Online gambling ads will be heavily restricted. Such ads will be banned completely on any websites aimed at minors, and on medical, educational, and social websites. Gambling ads will be broadcast on TV or radio only between 10pm and 6am, cannot be longer than 90 seconds, and may not be shown more than three times in one hour. Broadcasters who breach the rules will be fined $2,000 (1m Armenian drams; £1,580).
One exclusion from the legislation involves gaming machines at gas stations. They will still be allowed to operate. However, these will be banned for 10 days after the new law comes into effect.
The legislation was first drafted last October, following a petition by residents of Kapan, a small town in the south. The petition complained that many men spent hours of their time gambling in betting shops, often with wages needed for family living costs. Gambling addiction is rising and has been linked to increasing rates of suicide.
A second bill is being drafted that will ban online gambling and will likely contain clauses to limit the advertising of the state lottery and any remaining types of gambling. This bill has already had a first reading.
As soon as news broke today on the forthcoming ban, at least 500 Armenian bookmakers and employees took to the streets to voice their anger. There were daily street protests last week, too, in the capital, Yerevan. Many of those who demonstrated work for US-based BetConstruct and Goodwin Bet, two of Armenia’s biggest gambling operators that run betting shops around the country.
Gambling is one of Armenia’s biggest economic sectors, employing thousands of people. There are some 300 bookmaker stores in the country and a tiny handful of casinos.
The ban means around 1,500 employees in the gambling sector will lose their jobs. The small number of remaining gambling facilities now have 18 months to restructure their business to comply with the new law or face closure.
The protesters claim the new law will open the floodgates for Armenia’s licensed online gambling platforms, even though the government has online betting in its next sights.
Gambling sector already under pressure
The Armenian government has brought in numerous restrictions over the last 20 years. Among recent changes, online gambling platforms have been banned since 2015 from advertising. In 2016, the government raised license fees for the first time in a decade, from $209,000 (£165,000) to $1m (£790,000). The finance ministry claimed that online gambling platforms had seen profits increase from 5% at the start of 2016 to 20% in November of that year.
In 2017, the government set up a database of high rollers – gamblers who are big spenders at table games. The register contains the names of all gamblers who place wagers of $2,000 or more, per bet and logs their ID papers. Gambling operators are required to report all high-spending bettors to the register.
The deputy leader of the ruling My Step Alliance party, Hayk Sargsyan, has said 83% of wagering in Armenia is online, and only 17% in retail premises, with online continuing to grow.
Armenian bookmakers in 2010 reportedly had a turnover of $29m (£23m), rising 23-fold to $637m (£503m) in 2018. Last year, only $8.3m (£6.6m), or 1.4%, of that went to the government’s coffers.
Of Armenia’s two casinos, the Shangri La Yerevan and XO Club is the biggest, offering 12 table games, two poker tables, and 85 gaming and video poker machines. The other is the Royal Playhall. The Hayastan Hotel Casino was scheduled to open later this year but that now looks doubtful.
The two casinos in Tsakhkadzor are expected to keep their licenses, as the town is among the four locations where gambling will be permitted.
Armenia, a small country in Asia’s Southern Caucasus with a population of 3 million, has long been linked to organized crime. Some casinos have been alleged to launder money from Russian crime syndicates.
Earlier this year, police officials in Spain and France made multiple raids connected to match-fixing in tennis. An Armenian criminal gang led by 28-year-old Grigor Sargsyan, aka Maestro, is alleged to have been running the scam since 2017. Police say he paid up to 120 tennis players from more than half a dozen countries to throw their matches, or even agree to lose a set or a game.
Maestro is currently in jail in Brussels, charged with money-laundering, forgery, violation of gambling laws, belonging to a criminal organization, and corruption.