In April 2021, Kyrgyzstan legalized the gambling business. Prior to that, this market existed without any regulation and demonstrated chaotic growth. Now, entrepreneurs need to obtain a gambling license in Kyrgyzstan to conduct gambling business activities. This authorization document is a confirmation that the company complies with local legislation as well as international standards to ensure the security of customer funds and guarantee the payment of winnings.

 

The laws governing the gambling industry differ from jurisdiction to jurisdiction. Each country has its own nuances and pitfalls that should be taken into account when registering and legalizing a gambling business. Kyrgyzstan is not an exception in this regard, as it is also guided by special legislation developed to meet the needs of the country. In this context, it is very important to enlist the professional and qualified assistance of the Lawrange Attorneys Association, who will help you take into account every aspect of the registration and licensing of a gambling company. With us, obtaining a gambling license in Kyrgyzstan will be as quick and easy as possible, taking into account the specifics of a particular case.

 

How the gambling market is regulated in Kyrgyzstan

The main law that regulates this area is the Law on Gambling Activities in the Kyrgyz Republic, which introduces two terms:

 

  • Online casino means a company that organizes and conducts gambling in real time in single and multi-user mode on the territory of a gambling establishment using special devices.
  • An electronic (virtual) casino is a legal entity that operates through special software or a website on the Internet.

 

Two services act as regulators under a separate Resolution dated August 1, 2022:

 

  • The State Service for Regulation and Supervision of Finance (SFMSF) under the Ministry of Economy regulates land-based gambling activities.
  • The State Service for the Regulation and Supervision of Communications (SSSC) under the Ministry of Digital Transformation specializes in the control and monitoring of online and virtual casinos.

 

Regulatory authorities are engaged in:

 

  • issuing licenses and their duplicates;
  • prolongation of permits;
  • control over licensees’ compliance with legal requirements;
  • suspension of licenses or extension of their validity period;
  • creation and maintenance of registers, etc.

 

The gambling market is also regulated by other laws and regulations, for example, the Decree “On measures to suppress illegal activities in the organization and conduct of gambling” dated December 23, 2022, the Law “On the Licensing and Permitting System in the Kyrgyz Republic” dated October 19, 2013 No. 195, etc.

 

Important! The Kyrgyz government pays much less attention to the regulation of online gambling platforms than to land-based establishments. At the moment, there is minimal control over online gambling in this jurisdiction.

 

Obtaining a gambling license in Kyrgyzstan: the main advantages

The local government, following the example of neighboring states, decided not to miss the opportunity to replenish the treasury by legalizing the gambling market. This area is considered an effective tool for attracting foreign investment and a way to reduce the burden on the domestic economy. Potential opportunities and fairly broad prospects are also open to applicants – entrepreneurs who want to master the local gambling market, the main advantages of which include:

 

  • Growth of the tourist infrastructure – since the law prohibits the provision of gambling services to Kyrgyz citizens, the opening of a casino or any other permitted type of gaming automatically attracts foreign customers to the country. Access to a stable audience will be provided by the fact that the country is surrounded by regions where gambling is prohibited.
  • Stability of the political system – there are no negative political phenomena in this jurisdiction. The opening of a gambling company here will allow you to build a business with confidence in the future, and entrepreneurs will be able to use all the necessary tools and conditions for stable legal work.
  • Loyal taxation is one of the factors that attracts foreign investors to the country. If an entrepreneur has a gambling license in Kyrgyzstan, he or she will have to pay a single tax, the total amount of which does not exceed 40% of the company’s turnover.
  • Visa-free regime – citizens of other countries who have reached the age of 21 will be able to use the services of both land-based and online casinos or, for example, a betting shop (the exception applies to persons with dual citizenship).
  • The ability to use an interactive payment program – business owners will be able to choose a payment method for services based on the specifics of the company’s work and their own wishes.
  • Multi-currency mode – obtaining a Kyrgyz gambling license allows you to work with any currency denomination without the need for mandatory conversion into local money.
  • Opportunity to use an affordable advertising campaign – by investing in the gambling industry of Kyrgyzstan, entrepreneurs can fully advertise their services through land-based and online advertising.

 

Requirements for representatives of the Kyrgyz gambling market

Obtaining a gambling license in Kyrgyzstan is possible only if you meet all the requirements stipulated by the local legislation. One of them is the mandatory registration of a legal entity in the country. The founder may be a non-resident, provided that the company’s board includes at least 10% of the republic’s citizens.

 

Foreign entrepreneurs can also count on approval of their application if they are ready to contribute to the development of the local tourism market. Such readiness is expressed, for example, by building a 5-star hotel in a specially designated gaming area.

 

Important! Holders of a gambling license can provide it for use on a paid basis. This opens up the opportunity for everyone to start a business in the country under an already promoted brand. It is enough to conclude a relevant agreement with a licensed provider and then submit a package of documents to the Regulator.

 

Other requirements:

 

  • Use of certified software – the company’s work must involve equipment released no earlier than 2016. It is prohibited to make any changes or use any modifications to the software without the permission of the Regulator.
  • Only employees who are 23 years of age or older may be hired. At least 50% of the company’s staff must be citizens of Kyrgyzstan.
  • Opening an account in a local bank through which the project fund will be held. The applicant is required to provide evidence of the legitimacy of the financial source. The purpose of the reserve fund is to allow business owners to cover potential losses in the course of gambling activities.

 

Regarding the reserve fund, it should also be noted that its availability is mandatory for each type of game, not for all of them. If the operator’s account does not have enough funds at some point, the winnings can be paid out of the reserve fund.

 

The rules and requirements for online companies are described separately. Operators must ensure:

 

  • identification of the user;
  • recording of each transaction after placing a bet and paying the winnings
  • security of all user data;
  • the ability to pay bets, return funds, pay out winnings in non-cash form, etc.

 

The process of obtaining a gambling license in Kyrgyzstan

The gambling license in Kyrgyzstan is issued for a period of 10 years, after which it can be extended. The process of obtaining a license consists of several stages that are common to most jurisdictions. At the same time, not everyone understands the peculiarities of this market, and often gambling companies make fatal mistakes in the process of opening and licensing. Attempts to overcome the process of obtaining a gambling license on your own can be excessively financially costly and time-consuming if you do not use the help of Lawrange professionals.

 

Development of a business plan

To do this, it is necessary to conduct a detailed study of the specifics of the Kyrgyz gambling market, paying attention to the strategies of competitors. The data obtained should be used when drawing up a business plan. This document, among other things, indicates future expenses and profits, as well as describes the prospects for business development, its specifics, and possible risks that the company may face in the course of its activities.

 

Preparation of documents

To legalize the gambling business in Kyrgyzstan, it is necessary to prepare a package of documents for the Regulator, which consists of:

 

  • a duplicate of the company’s state registration certificate;
  • constituent documents certified by a notary;
  • copies of documents on the ownership or lease of software used in the work of the gambling company;
  • a copy of the receipt of payment of the state fee when applying for licensing;
  • evidence of the existence of a system for determining the identity of users with local citizenship;
  • agreements on maintaining a register of national passports of citizens of the Kyrgyz Republic for the purpose of identifying customers of the entertainment center and servicing requests of the entertainment business entity;
  • information on sources of income, as well as evidence of their legality;
  • a purchase/lease agreement for a land plot where the entrepreneur plans to build a gambling facility;
  • construction plan and description of the related infrastructure;
  • personal data on the founders of the project and the chief accountant (passport, citizenship, experience, education, no criminal record, etc;)
  • bank certificates on opening commercial accounts and formation of reserve capital;
  • contracts with equipment suppliers, etc.

 

Submitting an application and obtaining a license

With a prepared package of documents and a detailed business plan, the Applicant applies to the Regulator by filling out a special application form for a gambling license. This stage implies the need to pay a state fee.

 

Important! Before submitting an application, you should check the correctness of all documents. In case of a mistake, the licensing process may be delayed or even end without results.

 

The application may take 1 month or more to be considered, depending on the workload of the regulatory authority. When checking the provided documentation, you should be prepared for the fact that the regulator may request additional information.

 

The issuance of a gambling license is carried out exclusively in relation to a certain location of the establishment specified in the licensee’s application. In other words, this authorization document is tied to a specific physical address. In this case, the license shall specify:

 

  • the name of the licensing authority;
  • full and abbreviated name of the company, its legal form, number of the state registration (re-registration) certificate
  • type of activity subject to licensing;
  • validity period of the authorization document;
  • date of issuance of the license and registration number.

 

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Types of licenses

The Cabinet of Ministers defines the types of gambling allowed in Kyrgyzstan in its resolution. In particular, local and foreign entrepreneurs can open the following gambling establishments:

 

  • casinos
  • slot machine halls;
  • a bookmaker’s office;
  • online and electronic (virtual) casinos.

 

Such gambling activities as lotteries are subject to a state monopoly.

 

Each establishment operating in one or more of the above areas will need a separate license to open a company and carry out official activities in the future.

 

The nuances of gambling business taxation in Kyrgyzstan

Thanks to the legalization of gambling, the country has received an additional source of revenue for the state treasury. For companies operating in special gambling zones, a simplified tax system is applied, which provides for the payment of:

 

  • A state fee of USD 500 thousand for obtaining a permit to build a casino building.
  • The cost of a patent for the right to manage a gambling facility – USD 13.3 thousand for each casino, USD 1.8 thousand for betting shops and sweepstakes.
  • Taxes on the equipment used.
  • Value-added taxes – 12% on each loss in slots, at card tables and other equipment, as well as on the sale of drinks, food and hotel services.
  • Contributions to the pension fund – 10% of employee salaries, as well as 17.25% from the company’s own social fund.

 

How much does a gambling license in Kyrgyzstan cost

The state treasury of Kyrgyzstan receives the main income from the legalization of the gambling business through the payment of the state fee when issuing a license. Different types of gambling activities are subject to certain rates (which may change over time):

 

  • Up to USD 1.1 million for casinos, including online and virtual ones, registered in cities of republican significance.
  • From USD 500 thousand – for all types of casinos (land-based, online, virtual) registered in Osh, Chui, and Jalal-Abad regions.
  • USD 500 thousand will be paid by companies planning to conduct gambling business with slot machines in the country.
  • Owners of betting shops and sweepstakes will have to pay USD 126 thousand.

 

It should be noted that companies with foreign capital are also eligible to obtain a license.

 

Why you should contact Lawrange

Obtaining a gambling license in Kyrgyzstan can be fraught with various difficulties and nuances, including the most common ones:

 

  • Lack of legal knowledge – you can be an excellent entrepreneur, perfectly oriented in business processes, but not know the laws of the jurisdiction of interest. Turning to Lawrange professionals, you can free yourself from overcoming legal challenges and bureaucratic delays – our attorneys, lawyers and other specialists will help you go through all the stages of licensing in a short time.
  • Lack of understanding of the best legal form to choose for the future gambling company – we will advise you in detail on this issue, so you will be able to avoid difficulties in the process of managing the company.
  • Low awareness of taxation – our experts will tell you what taxes you will have to pay and what benefits you can expect depending on various factors.

 

These and other difficulties can be overcome with the help of Lawrange. We will help you to collect a full package of documents and execute all papers in accordance with the requirements of the Kyrgyz legislation. Our experts will protect you from making common mistakes when applying for a gambling license, so that the licensing process will be easy and fast. If you want to launch an online casino, offer sweepstakes to customers, or open any other company that will be engaged in gambling activities permitted in Kyrgyzstan, then we recommend that you use the comprehensive support of our Attorney’s association.

 

Conclusions

Several years ago, Kyrgyzstan followed the example of its neighbors and legalized gambling. A special law “On Gambling Activities in the Kyrgyz Republic” was adopted, as well as a number of other regulations and resolutions designed to make this market more transparent and safer for all its participants. Despite the ban on providing gambling services to residents of Kyrgyzstan, obtaining a license in this jurisdiction still has its advantages. These include a relatively easy start due to optimized taxation, the possibility of using a multi-currency regime, access to legal advertising of your own services, etc.

 

When applying for a gambling license in Kyrgyzstan, it is important to take into account a number of legislative nuances and peculiarities of the licensing procedure. The team of Lawrange is ready to provide comprehensive assistance in organizing and legalizing the gambling business in this jurisdiction. If you are interested, for example, in opening a land-based or online casino, a betting shop, or other gambling companies here, please contact us at your convenience.

 

FAQ

How many licenses can I get?

The government of Kyrgyzstan does not limit licensees in the number and choice of gambling activities. The main thing is to decide on specific areas in advance and properly draw up documents for each of them.

 

How long does licensing take in Kyrgyzstan?

It may take from 1 to 3 months from the moment of application submission to the Regulator to make its decision. You should also remember about the preliminary preparation of documentation – this stage also takes some time (from several weeks to 1-2 months).

 

How does the state oblige organizers to ensure mandatory payment of winnings?

The winner must receive his or her prize in any case, even if the casino does not have the money to do so. The company owner is obliged to ensure the fulfillment of this condition by forming a mandatory reserve fund for each type of gambling activity.

 

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