On December 13 this year, the Uzbekistan Cabinet officially approved regulations for online gambling games, betting, and lottery operators, ushering in the era of "Online Gambling Cities" in Uzbekistan.
From a complete ban in 2007 to the current open policy, Uzbekistan has revised its laws multiple times, experiencing many twists and turns regarding the issue of whether to open up the gambling industry.
From Open to Prohibited
Before 2005, gambling companies could operate in Uzbekistan. However, starting from September 1, 2007, all gambling games, except for lotteries, instant lotteries, and digital lotteries, were banned.
After the implementation of the ban, Uzbekistan also revised its Criminal and Administrative Codes to hold those who organize and participate in gambling games legally responsible, effectively closing the door on the gambling industry.
Initiating Legalization of Gambling
After 12 years of silence, signs of legalization of the gambling industry began to emerge in 2019.
On December 5, 2019, President Shavkat Mirziyoyev signed a decree "On measures to elevate Uzbekistan football to a new stage," allowing gambling businesses to operate from January 1, 2021, with a license obtained from the Capital Market Development Authority.
The decree required the revision of relevant legislation by June 1, 2020, to introduce state regulation of online gambling companies. A portion of the revenue from gambling companies was to be used for sports development, giving a positive boost to the gambling industry.
Banning Gambling, Missing Out on $50 Million!
The ban on gambling has likely caused more losses to Uzbekistan than anticipated.
On February 26, 2020, then Deputy Prime Minister Aziz Abdukhakimov stated that due to the domestic ban on gambling companies, Uzbekistan loses about $50 million in potential profits each year.
He also mentioned that many players choose to go to other countries or spend on foreign platforms.
Pandemic Boost, Surge in Online Gambling Software Players
During the global pandemic outbreak, perhaps due to boredom at home, according to statistics from spot on July 7, 2020, the interest of Uzbekistan's public in gambling apps and platforms significantly increased.
For example, the 1xbet app entered the top 30 downloads on Uzbekistan's iOS for the first time, marking the first time a gambling company product reached such a high ranking, while "bukmeker" saw a sharp rise in search queries on Yandex.
Legal Amendments Pending, Gambling Giants Quietly Enter
Since January 1, 2021, Uzbekistan officially allowed gambling activities with a license from the Capital Market Development Authority (CMDA). However, the laws were still not amended at that time.
On this, Dmitry Sergeyev, CEO of Parimatch in the CIS countries, pointed out that Uzbekistan, with its large population, has broad market prospects, but the uncertainty of legalization delayed the entry of gambling companies.
However, this did not stop international gambling companies from adjusting their operations in Uzbekistan. They began accepting payments with local Uzcard and HUMO bank cards.
For this, they played a "borderline" move. For example, players transfer money to a local office representative, who then deposits the money into the account. In payment service statistics, this is treated as a regular transfer payment, making the transaction appear unrelated to gambling.
According to a report by spot on March 18, 2021, intermediaries of international gambling companies even began offering offline services through outdoor advertising, and the number of so-called "exchangers" increased—they help players recharge and withdraw money to gambling company accounts without local payment system support, mainly through chat groups on Telegram and auto-reply tools, as well as .com international domain websites.
Some gambling companies also "thoughtfully" translated their websites into Uzbek, and some were fully prepared to enter the Uzbek market, having started setting up branches in Tashkent and recruiting employees. The situation in the gambling industry looked very promising.
Policy Reversal, Gambling Industry Halted Again
On April 6, 2022, the direction of the Uzbekistan gambling industry suddenly shifted, and the president signed a decree abolishing the legalization plan for gambling companies.
But this ban was minimally effective.
As Bekhzod Mamadjanov, Director of the Cybersecurity Center of the Ministry of Internal Affairs, mentioned on May 30, 2022, blocking gambling company websites is useless because most are hosted on foreign servers, making it impossible to actually stop their operations.
He stated that the global revenue of online gambling companies and other gambling providers is estimated at $54 billion.
On November 11, 2022, the Ministry of Justice drafted a legal bill that stipulates increased responsibility for participating in, organizing, and promoting gambling. The production, import, promotion, and sale of gambling products will be equivalent to organizing gambling (Article 278 of the Criminal Code). The penalty is up to 7 years in prison, and if repeated or involved in an organized group, the penalty can be up to 10 years. The release of the draft made the development of the Uzbekistan gambling industry once again bleak.
A Turnaround Appears, Gambling Industry May Enter Regulation
Turning to 2023, the development of the gambling industry welcomed new changes.
On April 8, 2023, the president signed a decree on the development of mass and professional football, according to which a working group composed of representatives from various departments such as economy, justice, and sports should formulate recommendations on conducting gambling business and submit them to the Cabinet by the end of the year.
The issuance of the decree also marked the beginning of the gambling industry moving towards regulation. On December 1, 2023, the National Agency for Project Prospects (NAPP) replaced the Ministry of Economy and Finance, starting to regulate lottery and gambling companies and having the power to block illegal gambling websites. After this, NAPP began to regulate gambling companies, lotteries, and casinos, and to address some legal conflict issues.
Official Legislation, Gambling Industry on the Right Track
This year, perhaps entering a new era of gambling industry development. On April 19, 2024, the president signed a new decree, stipulating that from January 1, 2025, gambling companies will be legalized in Uzbekistan, and gambling companies must pay a business tax at a rate of 4% for a period of 5 years. Citizens who win prizes from gambling companies will be exempt from personal income tax.
From prohibition to legalization, NAPP's statement may reveal the reasons behind this: the gambling ban had a negative impact on Uzbekistan, with $1 billion "flowing out" of the country each year, with no mechanism to keep gambling-addicted people out of the country, nor any way to control citizens participating in illegal gambling.
But for some unapproved gambling services, Uzbekistan is gradually cracking down. On November 27, 2024, in cooperation with the Internet Information Management Committee (АИМК), the Uzbekistan Competition Development and Consumer Rights Protection Committee took measures to block 30 websites promoting gambling services.
On December 6, 2024, the Ministerial Cabinet announced requirements for online gambling games, gambling companies, and lottery companies. According to the document, only residents with a registered legal entity have the right to organize gambling games, betting, and lotteries. The servers organizing the games must be located within Uzbekistan, and specific requirements were made for the companies' registered capital and reserve funds.
Currently, residents over 18 years old who have passed digital identity verification can participate in gambling in Uzbekistan.
From a complete ban to policy relaxation, then a return to prohibition, and finally moving towards regulated legislation, Uzbekistan's decision-making road in the gambling industry appears quite cautious.
As Uzbekistan actively integrates into the international community, choosing to open up the gambling industry is undoubtedly a bold decision. This is not only a challenge to traditional policies but also a trial for the diversified development of the national economy.
Rather than prohibiting, it is better to guide. Uzbekistan has chosen a path of "keeping the benefits within its own fields." Whether it can truly achieve its goals and drive a new wave of development in Uzbekistan may only be verified by time.
