Fintech companies in Kazakhstan are urging greater scrutiny of a proposed law intended to regulate betting transactions in the country.

The submitted legislation, currently in its final reading, would form a monopoly entity, the Unified Accounting System (UAS), the firms said in a joint press release. The UAS would be used to determine market participants, process payments, maintain a single “electronic wallet” and make settlements with clients. A critical concern is that it could charge up to 1.5% in commissions on all market transactions, within a market where regulated transactions exceed KZT1.2tn ($2.6bn) annually.

Irina Davidenko, a spokesperson for Kazakhstan’s payments industry, commented: “The proposed legislation would be a step backwards 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.”

Advertisement

The proposal, partly billed as a public health move against problem gambling, resembles a previous initiative, the Betting Accounting Centre (BAC). It was shelved in 2021 after a scandal involving a deputy minister who was dismissed for accepting bribes from BAC lobbyists, according to the press release.

The lack of transparency on the UAS structure and ownership as outlined in the legislation is another aspect of the change that is seen by critics as troubling.

The reintroduction of a UAS model occurred as late as the second reading of the legislation. If passed by parliament, it will become law without the comprehensive impact analysis and scrutiny typical for such significant regulatory change.

Observers argue the new regulation duplicates existing regulatory functions already managed by Kazakh state bodies and was proposed without the cooperation of the National Bank of Kazakhstan. The central bank has previously developed its own reform proposal that avoids introducing a monopolistic entity.

Opponents further contend that the regulation could cause “significant economic damage”. National Bank of Kazakhstan representatives and the payments industry have sounded alarm bells, but the issues have not been adequately addressed, the press release added.

Advertisement

The concerned fintech and payment companies want the legislation to be reconsidered. They are advocating for it to be sent back to the lower house of the legislature for a full regulatory impact analysis and thorough examination to ensure that it does not adversely affect industry or the economy.

Ilya Efimenko, commercial director of the payment organisation PayDala, said: “I appeal to the Senators, who need to know the true purpose of why the UAS has made a comeback in the bill.

“This is a re-emergence of the ‘Betting Accounting Center’ (BAC), a strikingly similar entity that was withdrawn before, and behind which, as the deputy from the Amanat party Elnur Beisenbayev said, are the powerful forces of ‘Old Kazakhstan.’

“Before our eyes, a monopolist, a private operator, is being created. The emergence of monopolies such as the UAS threatens the principles of a Fair Kazakhstan. Now everything is being done to break the financial system of Kazakhstan, recognized by experts as one of the best in Central Asia.”

The Chinese Embassy in the Philippines has urged the Philippine government to ban its offshore gaming industry, claiming that the “vast majority” of Chinese citizens involved in their operations are victims.

In an official statement attributed to a spokesperson, the embassy also denied any involvement in the Philippine Offshore Gaming Operators (POGO) industry after uniforms of the Chinese People’s Liberation Army (PLA) and the Chinese People’s Armed Police Force were discovered during a raid on a POGO compound in Pampanga earlier this month.

“We appeal to the Philippines to ban POGO at an early date so as to root out this social ill. And we firmly oppose any baseless accusation and smearing against China in connection with POGO,” the statement said.

Advertisement

The statement went on to say, “Chinese law prohibits all forms of gambling. The Chinese government strictly cracks down on Chinese citizens engaging in gambling business abroad including POGO. Ample evidence shows that POGO breeds serious crimes such as kidnapping for ransom, human trafficking and murder. POGO is detrimental to both Philippine and Chinese interests and images as well as China-Philippines relations.

“In recent years, the Chinese and Philippine law enforcement agencies have maintained close communication and cooperation and conducted multiple joint operations to bring down cross-border gambling and telecom fraud. Since 2018, nearly 3000 Chinese citizens implicated in the cases have been repatriated with joint efforts of both sides. In the past year alone, China has assisted the Philippines in shutting down five POGO hubs and repatriated nearly 1000 Chinese citizens.

“The vast majority of the Chinese citizens involved in these cases are victims of the Philippine offshore gambling industry. The Chinese government is committed to protecting the legitimate rights and interests of Chinese citizens.”

Pronet Gaming, an award-winning platform provider of full turnkey solutions, debuted at SiGMA Asia earlier this month with a stellar performance.

Held in Manila, Philippines, from 3 to 5 June at the SMX Convention Centre in Pasay City, the conference served as the perfect venue for Pronet Gaming to showcase its commitment to innovation, excellence and expansion in the vibrant Asian market.

Among the highlights of Pronet Gaming’s presence at SiGMA Asia was the “Best Multi-Channel Provider 2024” award that the company bagged at the SiGMA Asia Awards held on opening night. The recognition spoke volumes of Pronet Gaming’s unwavering dedication to delivering leading-edge solutions across multiple platforms, solidifying its position as a frontrunner in the iGaming industry.

Advertisement

In attendance were the Pronet Gaming team from both the London and Manila offices who gave an impressive showing, demonstrating the company’s global reach and commitment to providing unparalleled support to its partners. Their participation underlined Pronet Gaming’s mission to foster strong relationships and deliver tailored solutions to meet the unique needs of operators worldwide.

One of the standout attractions at the Pronet Gaming booth was the Spin-to-Win wheel, which captivated attendees and quickly emerged as a crowd favourite. With people queuing in droves for a chance to win exciting prizes, it proved to be thematic with Pronet Gaming’s ability to engage and delight audiences.

Alex Leese, CEO of Pronet Gaming, took the stage as a keynote speaker, participating in a fireside chat that offered valuable insights into the future of Asian iGaming businesses diversifying into other jurisdictions. More than galvanising Pronet Gaming’s thought leadership and deep understanding of the opportunities and challenges shaping the industry’s landscape, Leese spoke reassuringly of the giant strides his company has made toward setting up shop in Asia, as well as outlining a path to helping local Asian operators to expand their global reach into Europe & LATAM.

“One year ago, we were only at the ‘we will be in Asia, and we are on our way’ stage. As I speak here today, I am now proud to say that we have the office, we have the team, and we have the PAGCOR accreditation. Next time, I will be saying that we are established, with a much larger existing team, and operator clients on board. My aim is to be here again next year to say that we are well and truly on the ground,” Leese said.

SiGMA Asia provided an invaluable platform for Pronet Gaming to forge new connections and explore opportunities in the burgeoning Asian market. As the company gears up to launch its operations in Asia, the event served as a springboard for establishing strategic partnerships and fostering collaborations that will drive growth and success in the region.

Advertisement