In 2022, Kyrgyzstan made an unprecedented decision to legalise gambling, having banned it for ten years. The intention was to increase the country’s state revenues from the potentially lucrative gambling market. Despite attempts to create gambling-friendly regulations, the anticipated revenue increases have failed to materialise. In fact, the contributions from this newly legalised sector have remained .
Tax contributions of Kyrgyzstan’s gambling industry
Before 2022, gambling was prohibited in Kyrgyzstan. The legal landscape was harsh for gambling enthusiasts, and the country was among many that struggled with illicit gambling activities. The new legislation permitted casinos, betting shops, and slot machines to operate in the country. However, there was a catch: only foreign citizens were allowed to partake in these gambling activities.
In their first year of operation, casinos contributed a mere KGS 97 million (about $1.1 million) in taxes and contributions to the state budget. This is far from the billions that the government had projected. The government, however, still sees reason for hope. It predicts gambling revenues will reach KGS 270 million ($3.1 million) by 2024. While this suggests growth, it still falls short of expectations.
Notably, casinos in 2023 contributed KGS 258 million ($2.8 million), whereas betting shops contributed merely KGS 11 million ($125,000). Slot machines brought in a paltry KGS 1.8 million ($20,500). Such an uneven distribution further accentuates the predominance of casinos as revenue-generating businesses.
Legislative criticism and public discontent
The underwhelming performance of the gambling sector has raised concerns among Members of Parliament. MP Sultanbay Aizhigitov voiced his dissatisfaction with the situation in parliament, criticising the government’s decision to legalise casinos without seeing substantial benefits for the state. Aizhigitov pointed out that the gambling industry is essentially controlled by a few individuals and questioned whether casinos genuinely serve the public good. He even suggested shutting down the casinos entirely, citing their lack of positive impact on the economy.
Aizhigitov stated, “There is almost no benefit to the state from casino activity. It is a business controlled by five or six individuals, and it causes significant harm. The initiative has not justified itself. Do we need casinos at all? Perhaps it’s better to shut them down.”
Some critics have proposed that the entire government perspective is wrong. This has contributed marginally to the state coffers rather than the expected economic windfall. As gambling revenues fall short of expectations, Kyrgyz lawmakers are debating whether to support, outright ban, or find a middle ground for the industry. While some legislators see the casinos as a drag on the economy, others believe the industry could be reinvigorated with a few changes.
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