New Era Begins as Uzbekistan Legalises Gambling in January 2025

The legalisation of gambling in Uzbekistan set for January 2025 is a huge shift for the country following the recent presidential decree aimed at establishing a regulated environment for online casinos, betting and lotteries.  

The move to legalise gambling is set to generate substantial economic and financial benefits for Uzbekistan, but it has also come with concerns regarding existing laws in the country.

The decision has been critically analysed by Abdulaziz Janturaev, a lawyer within the country. He has raised concerns about conflicts between the new framework and existing laws. He suggests that key legal amendments are necessary to provide a consistent legal basis for the gaming activities. 

For instance, current provisions in the Civil Code, which do not protect gambling-related claims, may leave individuals vulnerable to fraud and exploitation.

National Agency to Issue Licenses 

The decree, titled "On Measures to Improve the Regulation of Organising and Conducting Risk-Based Games and Lotteries," empowers the National Agency for Prospective Projects (NAPP) to oversee the newly legalised gambling sector. 

The NAPP will be responsible for issuing licenses, ensuring compliance, and enforcing regulations that govern the industry. 

Notably, participants must be 18 years of age or older, allowing both local and foreign individuals to engage in these activities. 

Illegal Gambling to be Targeted  

Beginning January 1, 2025, companies that organise lotteries, online games, and sports betting will be subject to a 4% turnover tax on their overall income, a decision that underscores the government's intention to harness tax revenue from this emerging industry. 

Importantly, individual winnings from legal gambling will be exempt from personal income tax, a strategy designed to encourage participation. 

Additionally, existing penalties for illegal gambling under the Administrative and Criminal Codes will need to be revised to differentiate between licensed and unlicensed operations, ensuring that licensed operators can operate without fear of undue penalty while cracking down on illegal activities. 

The shift from illegal to regulated gambling promises to curtail the shadow economy surrounding online gaming, which has cost the country an estimated $50 million in lost revenue from foreign platforms each year. By providing a legal alternative, the government hopes to retain these funds domestically, potentially generating around $6 million annually in tax revenue. 

Uzbekistan Looking Towards Neighbours for Guidance on Gambling 

Uzbekistan is studying the experiences of its neighbours. For example, Kazakhstan's gradual regulation of gambling since 2007 and ongoing reforms, which emphasise responsible gambling measures, serve as a case study. 

Insights from Georgia and Turkey further reinforce the need to balance economic gain with responsible oversight. 

As Uzbekistan prepares for this transition, fears regarding money laundering and fraud loom large. Aligning with international norms, such as the Financial Action Task Force (FATF) recommendations on anti-money laundering, will be crucial.

Tech and AI to Feature in Framework to Assist with Transparency and Security 

Technology will also play a pivotal role in ensuring the success and integrity of the gambling sector. Experts suggest that advanced tools, such as blockchain, could improve transparency and security, while artificial intelligence could assist in identifying problem gambling behaviours and potential financial crimes.

The legalisation of gambling in Uzbekistan marks a new chapter for the nation as it embraces economic modernization. Yet, the implementation of robust regulations, social responsibility measures, and ongoing evaluations will be essential in ensuring that this bold step contributes positively to the welfare of Uzbek citizens.