The government of Uzbekistan has taken a significant step in regulating the online gambling and lottery industries. A resolution passed by the Cabinet of Ministers on December 6 and publicly announced on December 12 sets the framework for licensing these activities. This decision follows a presidential decree issued in April 2024, paving the way for legalized online gambling, lotteries, and betting starting January 1, 2025.
Strict Licensing Process Introduced
Online gambling and lottery operators must now adhere to detailed licensing conditions set by the National Agency for Prospective Projects (NAPP). These licenses are mandatory for entities wishing to operate within Uzbekistan’s regulated framework. Valid for five years, a new license costs 18.75 million soums (approximately $1,500), while modifications to existing licenses incur a fee of 9.375 million soums ($730).
The resolution emphasizes transparency and oversight, ensuring only licensed operators can offer services to Uzbek citizens. The government appears intent on balancing economic opportunities with regulatory controls.
Localised Internet Domains Required
One notable requirement is that operators must use domains hosted within Uzbekistan’s national internet segment. This stipulation ensures tighter regulatory oversight, limiting risks associated with offshore operations and improving consumer protection.
Incorporating this rule could encourage local technological development and infrastructure improvements, with more services being built around Uzbekistan’s digital framework.
Economic Implications of the Licensing Model
The licensing fees, while moderate by international standards, represent a clear revenue stream for the Uzbek government. Here’s a breakdown of the costs involved:
| License Type | Duration | Cost in Soums | Cost in USD |
|---|---|---|---|
| New License | 5 Years | 18.75mn | $1,500 |
| License Amendment | – | 9.375mn | $730 |
The government’s decision to establish a five-year licensing period also provides stability to operators, fostering long-term investment.
What This Means for Businesses and Players
For operators, the licensing framework signals a significant opportunity to tap into a regulated market. With the gambling industry globally generating billions annually, Uzbekistan’s entry could attract both domestic and international interest.
Players, on the other hand, will gain access to services within a controlled environment, reducing risks of fraud and malpractice. However, compliance costs may result in higher service fees for consumers.
One question lingers: how will the government address potential social concerns linked to gambling? While the regulation prioritizes control, it remains to be seen whether parallel measures—such as public awareness campaigns or addiction support services—will accompany this legislation.
Regional and Global Context
Uzbekistan’s move to regulate online gambling mirrors trends seen in neighbouring countries and beyond. Across Central Asia, governments are grappling with the dual goals of fostering economic growth and addressing social risks. For example:
- Kazakhstan introduced similar measures but imposed higher fees, targeting international operators.
- Kyrgyzstan remains more conservative, banning most gambling activities outright.
Globally, Uzbekistan’s $1,500 licensing fee is relatively affordable compared to Western nations, where fees often exceed $10,000 annually.
This strategy could position Uzbekistan as a regional hub for online gaming, attracting startups and established firms looking to expand in a cost-effective market.
Challenges and Opportunities Ahead
While the regulatory framework represents progress, challenges remain. Strict monitoring will be essential to enforce compliance and prevent illegal operators from infiltrating the market.
On the brighter side, the move is expected to create jobs, stimulate technology-related industries, and contribute to state revenue. The government’s proactive approach, coupled with relatively low entry barriers, might also foster healthy competition within the sector.
This development marks a pivotal moment for Uzbekistan’s economy and its digital future. Time will reveal whether this gamble on regulation pays off.
