Sports funding will be increased through lotteries

Russian President Vladimir Putin instructed the government to increase spending on sports development. This is proposed to be done by increasing the share of funds from the volume of targeted contributions that lottery operators send to the budget. Currently, the winners of the drawings must pay a tax of 13% on the winning amount, and distributors – 10% of the difference between the proceeds received and the prize fund. Market participants believe that there may be misappropriation of contributions that are not “colored” in any way. They propose to label funds intended to finance sports facilities.

At a meeting of the Council on Physical Education and Sports on October 19, Vladimir Putin instructed the government to increase the share of funds allocated for the development of sports from targeted allocations from lotteries: “We always say that the health of the nation, and this is directly dependent on physical education and sports, is priority, of course. This does not mean that you need to withdraw [отчисления от лотерей] from regulation by the Ministry of Finance. It’s just that the royalties from lotteries should be larger.”

Winners of the drawings pay a tax of 13% on the winning amount. Ticket distributors make additional targeted contributions in the amount of 10% of the difference between the revenue received and the prize fund.

Kommersant sent a request to the Ministry of Finance.

Since July 2014, only state lotteries have been allowed in the Russian Federation; the organizers are the Ministry of Sports and the Ministry of Finance. JSC GSL (“State Lotteries”) is the operator of the lottery of the Ministry of Sports, LLC “Sportloto” is the operator of the Ministry of Finance. The largest distributor of tickets is TK Center JSC (Stoloto brand), all three are controlled by Armen Sargsyan’s S8 Capital holding. In 2022, the total revenue of GSL, Sportloto and TC Center, according to Kartoteka.ruamounted to about 94 billion rubles.

In 2020, another operator appeared on the market – Sports Lotteries LLC, which distributes the National Lottery organized by the Ministry of Finance (49% from VTB structures, 51% from the President of the International Boxing Federation Umar Kremlev). The LLC’s revenue in 2021 amounted to 52.3 million rubles, data for 2022 in Kartoteka.ru are missing.

Targeted deductions from lottery activities are transferred quarterly to the budget of the Russian Federation, from where they are then spent by the government, Stoloto explains.

Further, in accordance with the Federal Law on lotteries, money is used to finance socially significant objects and events, including activities for the development of physical education and sports, elite sports and the sports reserve training system.

However, royalties from lottery activities are “not colored”, which does not allow tracking their further use, Stoloto emphasizes. The company believes that “it may be advisable to provide for the “coloring” of funds to finance the development of sports and the construction of sports infrastructure, which is standard practice in many countries around the world.”

The National Lotteries assured that they support the president’s initiative: “Its implementation will help expand the audience of lottery participants, in general, further develop the lottery market in the Russian Federation and increase targeted support for sports.”

InterMedia editor-in-chief Evgeniy Safronov believes that the industry is sufficiently regulated: “But, as in other industries, there is a problem when not the most effective expenses are put in first place.”

At the end of 2022, the volume of targeted contributions transferred to the budget of the Russian Federation from Stoloto amounted to 2.9 billion rubles, and total contributions from lottery activities (including targeted contributions, taxes and fees) amounted to almost 8 billion rubles, and for nine months of 2023 In 2019, the volume of targeted deductions from the sale of lottery tickets has already reached 2.3 billion rubles, the company clarified. At the end of the year, Stoloto expects the figure to exceed 3 billion rubles. The National Lotteries note that the volume of contributions to the budget for nine months has increased fivefold and will continue to increase, but they do not disclose specific figures.

Yulia Yurasova