Kazakhstan’s Gambling Regulation Proposal Causes Industry Concerns
Kazakhstan’s fintech and payment sectors have raised the alarm about a new law intended to regulate gambling transactions, which would create a monopoly entity known as the Unified Accounting System (UAS).
Fintech and payments sectors oppose Kazakhstan’s new gambling regulation.
LISTEN TO THIS ARTICLE:This proposed legislation, currently in its final review stage, aims to establish the UAS to oversee market participants, handle regular and casino payments, manage a unified electronic wallet, and facilitate settlements with clients. The UAS would charge up to a 1.5% fee on all transactions in a market where regulated transactions total over 1.2 trillion tenge (US$2.6 billion) annually.
Concerns over Transparency
This proposal brings to mind the earlier Betting Accounting Center (BAC), which was abandoned in 2021 following a corruption scandal involving a Vice-Minister. Critics point out the lack of transparency about the UAS’s structure and ownership.
The UAS was introduced during the second reading of the bill, bypassing proper impact analysis. Critics argue this has prevented a comprehensive evaluation of the potential economic and regulatory effects.
The National Bank of Kazakhstan, the central bank, opposes the UAS, stating it would duplicate existing regulatory roles without improving transaction security or consumer protection. The central bank has developed its own reform proposal that excludes a monopoly entity.
Kazakhstan’s payment industry has also proposed an alternative reform plan, which has been ignored. Industry representatives warn that the proposed law could disrupt the payments sector, reduce competition, and negatively affect Kazakhstan’s business environment.
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Proposed Legislation Would Harm Competition
The opinion within the payment industry is that the proposed legislation would do more harm than good.
The proposed legislation would be a step backward for Kazakhstan, harming competition in the country’s vital payments sector and signaling to the outside world that necessary business reform is being driven by shadowy interests rather than what’s right for industries and consumers.
This debate comes amidst Kazakhstan’s efforts to regulate and control online gambling. In 2021, the government blocked LinkedIn due to online casino ads, demonstrating its strict stance on gambling-related activities.
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