Azerbaijan is a country situated in the southeastern part of the Transcaucasian region on the border of Europe-Asia continental divide. It is not only the country with a long history and a diverse population but also the country with the developing gambling industry. Thus, the purpose of this article is to present the general information about the Azerbaijan bookmakers and sports betting regulations such as the history, legal basis, controlling authorities, licenses, taxes, and types of allowed bets.
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Table of Contents
Summary of Key Events
Gambling Laws in Azerbaijan Bookmakers
1991 – 1997: The so called ‘Golden Age of Gambling’
After gaining independence in 1991 from the Soviet Union, Azerbaijan had a renaissance of gambling. Thus, although Azerbaijan is a Muslim majority country, it was influenced by the Turkish move to legalise gambling. This led to the emergence of fast growth in the casinos industry.
In the same year, many casinos including small slot halls were opened and many of them belonged to Turkish investors. But this sector enticed the organized crime and corrupt practices that created many social problems.
1998: The Gambling Scandal and Ban
This situation implies that by 1997 there were approximately 10 casinos in Azerbaijan. Though, the sector acted as a hub for the commission of unlawful activities. In 1998, an extensive gambling scandal involving President Heydər Əliyev and his son, current President İlham Əliyev, was a key factor in the prohibition of most types of gambling across the country. The state owned lottery was the only one that was allowed to operate at this time.
Revival and Regulation of Bookmakers and Sports Betting
- 2001: Creation of Azerlotereya OJSC
In 2001 the state- owned Azerlotereya OJSC was established to oversee and manage the lottery business. This move can be considered as the starting point to the more organized efforts in regulating gambling in the country.
- 2011: The following is a clear indication that relegalization of sports betting is the right approach that must be taken.
Sports betting was again legalized in early 2011 but this was conditioned to be closely monitored by the state for it to finance government sports activities as well as development. The same year also saw the legalization of online betting on sports and online lottery.
Legal Regulation of Bookmakers and Sports Betting Today
Regulatory Agencies
The Ministry of Economy of Azerbaijan (İqtisadiyyat Nazirliyi) regulates Azerlotereya OJSC and Caspiantech CJSC as they are licensed companies. The Lottery Act of 2011 remains the main law regulating the gambling activities in the country to date.
Gambling Licenses and Fees
- Ministry of Economy: It is also directly responsible for the licensing of the products that are produced by the different companies.
- Azerlotereya OJSC: Supervises online lottery business.
- Caspiantech CJSC (Topaz): Oversees online betting particularly in sports.
Licenses for other companies are not granted.
Types of Legal Betting
The following forms of gambling are currently legal in Azerbaijan:
- Sports Betting: Operated by Caspiantech CJSC (Topaz) and started its commercial operation in 2007.
- Bingo and Lottery: Currently it is monopolized by Azerlotereya OJSC and is one of the main elements of the country’s economy.
Prohibited Activities
On December 27, 2021, the Azerbaijani parliament approved an amendment to the law “On Telecommunications” that bans the access to foreign lottery and sports betting sites. Internet service providers and telecom operators are obliged to prevent the organisation and carrying out of gambling through telecommunication services.
Taxation of Azerbaijan Bookmakers
Gambling taxes in Azerbaijan are outlined in the Tax Code:
- Tax on Participants: 6% of the gross receipts.
- Tax on Sellers: 4% of gross commission paid.
- Tax on Legal Entities and Sole Traders: It was also stated that the cash with drawl would be 1% of the total amount.
- Corporate Tax: 20 percent in addition to the taxes on gambling.
- Gambling Winnings Tax: They are tax-free except for income tax, and for Azerlotereya OJSC the winnings up to 500 manats (equivalent to 250-300 USD) are also non-taxable.
Important Stages in the Development of Azerbaijani Gambling Legislation
- 1991: Access to independence from the Soviet Union and subsequent legalization of gambling.
- 1998: National prohibition of most types of betting after scandal.
- 2001: Establishment of Azerlotereya OJSC to control the lottery business.
- 2011: The legalization of betting on sports and online gambling with restriction on state level.
- 2021: Approval of changes to reduce the possibility of accessing foreign-based betting sites.
Prominent Sports in Azerbaijan
It is worth stating that Azerbaijani people have always been fond of different kinds of sports which played a great role in increasing national identity and international appreciation. Among them, chess, football, and martial arts are specific and deserve special attention.
- Chess: Some of the famous players are Gary Kasparov, Shahriyar Mammadyarov, and Teimour Radjabov.
- Football: It is an organization of the Association of Football Federations of Azerbaijan; more than 9 thousand players have been registered.
- Martial Arts: Azerbaijan has had its icons in the Olympics such as Elnur Mammadli and Movlud Miraliyev who made a name for the country.
Conclusion
This paper presents the historical analysis of the development of gambling and sports betting in Azerbaijan, which has been characterized by the liberalization, prohibition, and strategic re-regulation. Today, the country has succeeded in regulating the betting on sports and lotteries according to the national values and economic goals.
To those who want to invest in Azerbaijan gambling market, it is highly essential to know its background, rules, and existing laws. In this regard, it will be important to remain as informed as possible in order to be successful in this constantly changing sector.
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