Uzbekistan’s authorities again permitted the bookmaker activities banned 14 years ago. Thus, the authorities are going to liquidate illegal betting and develop Uzbek football.
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The legalization of bookmaker activity is one of the points in the new framework for the development of Uzbek football until 2030. The President of Uzbekistan Shavkat Mirziyoyev signed the corresponding decree on December 4, 2019.
However, the decree requires the relevant authorities, including the Prosecutor General’s Office and the Ministry of Internal Affairs to submit proposals before June 1, 2020 on combating possible violations, such as “holding and participating in the rigged games in order to impact the games or their results”.
Abdujabar Abduvakhitov, Advisor to the President Mirziyoyev on Youth, Science, Education, Health and Sports, at a meeting at the National Olympic Committee of the Republic of Uzbekistan spoke on how legalizing bookmakers will develop professional and children’s football in the country. According to him, up to 45% of the incoming taxes from the bookmaker activities will be invested in the development of the children’s football (the stadiums construction, holding amateur tournaments, searching and educating the talented youth).
“First of all, the issue of children’s football concerns me; for its development we must significantly increase funding, is not that so? We should open the best schools, should we not? Let us together take this money from the bookmakers and invest it,” Gazeta.uz quotes Abduvakhitov.
The official also admitted the presence of illegal bookmakers in Uzbekistan.
Abduvakhitov also recalled that Uzbekistan is a secular country, possibly anticipating criticism from religious leader that Islam forbids gambling.
“Now, many say that bookmaking is gambling. Whoever wants, can participate in it… Whoever believes that this contradicts his convictions, may not,” said the Advisor to the President.
Will Authorities Block Foreign Bookmakers?
In his speech, Abdujabar Abduvahitov also indirectly recognized the problem of capital outflows from the country, stating that several years ago, Uzbek citizens traveled to Thailand and Hong Kong to make bets.
Did this mean that the authorities would seek to combat outflows and try to establish a monopoly of domestic bookmakers?
CABAR.asia journalist reached the Uzbekistan Football Association for clarification. However, the Association stated that they could not answer this question, since the concept is under consideration of the Ministry of Sports and other departments involved in the Presidential decree implementation.
The head of the RB-Business editorial board of the international analytical portal Bookmakers Ratings Boris Gubkin believes that Uzbekistan’s authorities will not be able to establish the monopoly of domestic companies in this market.
“The bookmaker business is very competitive, and considering the development of online betting, it is becoming transnational. Therefore, to get a client, you have to try your best,” Boris Gubkin said in CABAR.asia interview.
According to him, even if the Uzbek authorities block the websites of competitive online bookmakers, the mirror sites will still provide access.
The expert found it difficult to estimate the approximate size of the created bookmaker market and the extent of tax deductions to the budget.
“It is too early to talk about big contracts. As the market is new, bookmakers are unlikely to spend a lot,” said Boris Gubkin.
He believes that the market development will take about five years and only after that, provided the country’s openness to foreign bookmakers and acceptable working conditions, the dividends will be received.
“Foreign bookmakers will not enter the Uzbek market without making sure the risks are minimal,” Boris Gubkin said.
BACKGROUND
In neighboring Kazakhstan, where bookmaker activity is allowed, at the end of 2018, bookmakers sponsored domestic sports with 1 billion tenge (at the exchange rate for December 2018 – $2.7 million). More than 16 billion tenge or about $42 million were transferred to the treasury of the Republic of Kazakhstan as taxes.
The second important aspect of the Uzbek football reform should be the self-sufficiency of professional clubs. Each of them must develop its own business strategy and search for sponsors.
Currently, only two private clubs are registered in the Uzbekistan Super League: the capital’s Pakhtakor, which is privately patronized by Russian billionaire Alisher Usmanov, and the Kokand 1912 club from the Ferghana region.
Other professional clubs use state subsidies. Most often, they are in the care of state-owned companies.The broadcasts of the matches, sales of the football merchandise, tickets and season passes will be privatized.
Finally, the third aspect of the reform will be state support for children’s football and the amateur leagues popularization. By 2030, the number of Uzbek citizens involved in football should increase to 5% of the population of the republic, or 1.6 million people, considering demographic indicators. Currently, 327 thousand people are involved in football.
For this purpose, football academies, stadiums, training fields and other infrastructure will be built. Specific details will be approved as part of the annual roadmaps design.
The project initiators propose to create from scratch the institutes of sports management, pharmacology, nutrition, and psychology. Football scouts will play a special role in the talent search. The most promising sportsmen will be transferred to more successful foreign leagues to study the experience and skills of football stars.
Legal Bookmaking Is Better Than Under-The-Table Betting
In Uzbekistan, semilegal bookmakers worked until 2007, after which they were officially banned.
Khaetkhan Nasreddinov, an economist, former football player and regular gambler, says that currently there are several options for gambling in Uzbekistan. One of them is to open a gambling bank account in another country where the bookmakers are allowed, and process transactions through private bank transfers. In this case, the tax is deducted from the gambler in the country where the bookmaker is registered.
According to Khaetkhan Nasreddinov, a few years ago he opened a gambling account in another country and earned money by his good knowledge of football.
“I got a bank card and began to earn money on football, sometimes on basketball. I received income through bank transfers, regularly paid taxes for the income source. On average, I bet $500 on a betting odds of 1.2 and received $100. I played strictly according to the rules and on certain days. There were several of them per week, and therefore I earned good money,” Nasreddinov told CABAR.asia.
According to some reports, 15 thousand citizens of Uzbekistan used the services of just one of the bookmakers, Melbet. The company has been working semilegally online since 2015 on the Uzbek market. The total winnings of Uzbek gamblers amounted to $2 million.
According to CABAR.asia sources, in order to receive such a sum, Uzbek gamblers had to place bets worth up to $5 million.
In addition, to determine the potential of this market, local shadow bookmakers should also be taken into account. However, it is not easy to work with them.
“They work by cash and without issuing a coupon. Betting odds, as a rule, are random, unfair. Often, such bookmakers may refuse to pay the full amount of the win, explaining this by the conversion difficulties. The gamblers are forced to agree, since they do not have a legal basis for receiving the full amount. Otherwise, they lose everything, because the gambler in Uzbekistan is breaking the law by illegally betting,” says Nasreddinov.
According to him, illegal bookmakers do not advertise their activities. To get there, a patronage or a recommendation from a regular reliable customer is needed.
“There are several shadow bookmakers in Tashkent where you can bet on football in cash: the terms of the betting are written on plain paper. The bets usually range from 50 thousand to 10 million soums (from $5 to $1050 – ed.),” Nasreddinov says.
He believes that the main victims of the bookmakers are uneducated and gambling young people, who, pursuing easy money, pay their savings to the bookmakers. In his opinion, the initiators of the introduction of bookmakers in Uzbekistan did not consider this threat.
“This is a twisted logic. In the country where fancy weddings are banned due to a violation of ethical conduct, gambling is allowed. A business based on stimulating people’s vices corrupts both sides,” says Nasreddinov.
The Spiritual Administration of Muslims of Uzbekistan did not respond to CABAR.asia request regarding their attitude to the legalization of bookmakers. Traditionally, Islam opposes any kind of gambling, and the Quran urges believers to refrain from sin (Surah “Meal”).
Bookmakers and Corruption Factor
The Uzbekistan Football Association believes that the bookmakers will not cause the corruption in football. First of all, because bookmakers analyze any suspicious match, and if there are certain arguments in favor of the fact that the match was rigged, payments on winnings can be canceled. For example, it can be mass bets on one of the teams in an equal match.
According to the sources, informants work for bookmakers and warn them about suspicious matches.
In addition, the Video Assistant Referee (VAR) system will be introduced in 2021 as an additional measure to combat rigged matches. Given that each moment of the match will be recorded on cameras and inspected directly during the match by a group of accredited specialists with the right to interfere in the work of the referee, the corruption factor is leveled. That is, a referee is very unlikely to mark down one of the teams on camera.Earlier, Uzbekistan Football Association dismissed the leaders of two Uzbek football clubs for organizing rigged matches. A source in a structure close to Uzbekistan Football Association anonymously told CABAR.asia that rigged matches also happen in the Super League. Most often this happens at the end of the season, when each point is important.
“The VAR system will not solve all corruption issues in football if the coaches or sportsmen themselves participate in the organization of the rigged match,” the source said.
The Best Way to Help Football Is to Leave It Alone
According to football blogger Shukhrat Aliyev, current Uzbek football lacks the development strategy, and there are few competent specialists in its management.
The experts recognize excessive bureaucratization by the state as the main restraining factor hindering the development of the national team and the championship.
According to Nasreddinov, he had to collect a lot of paperwork and spend a lot of time to organize two matches for 14-years-old children.
“Not to mention the professional football, that is not ready for private initiatives,” said Nasreddinov.
Shukhrat Aliyev believes that professional football in the country will only develop if the market mechanisms are introduced: talented sportsmen transfers, football merchandise and rights for broadcasting sales, etc.
Football marketing experts need to think more globally.
“Without the financing from the state, the football clubs will become more pragmatic and begin to develop following the example of European clubs. If the national television is not able to pay an adequate sum of money for broadcasting matches, there is always an alternative online. Football marketing experts need to think more globally,” Aliyev said.
Shukhrat Aliyev does not believe that bookmakers will take the biggest share of football financing in Uzbekistan. A similar opinion was expressed by the former football player Khaetkhan Nasreddinov, who labeled the new scheme refinancing.
“The tax is collected from bookmakers and distributed to football clubs? This is not development, but simply refinancing. There are no guarantees that the money will be spent specifically for the football development. Money will not be spent on football for one simple reason: our football is unprofitable,” Nasreddinov believes.
“This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project”.