Gambling advertisements are everywhere in Armenia: on the public transportation system, billboards, embedded in your online news article, and bouncing across the screen of utility payment terminals. There is no hiding from them. It is no wonder that these ads have also grabbed the attention of policymakers.
Because of the externalities that the gambling industry places on society, a number of legislative changes were made in 2014 and in 2019 in Armenia—from limits on advertisements on television and radio, to the removal of casinos from the capital Yerevan. Following these restrictions, bookmakers redirected much of their ad spending to the online domain, which actually resulted in an increase in the quantity and accessibility of gambling advertisements.
In response, additional legislative changes were made. With the June parliamentary election in view, the National Assembly adopted Bill G-849 on May 5, 2021. It passed with 74 votes from the ruling Civil Contract Party, while the opposition Prosperous Armenia and Bright Armenia parties were either not present or did not vote. Only Arman Babajanyan, who is associated with the 1in.am news website, voted against. The bill made two key changes.
Back in 2019, a corresponding legal regulation was adopted, which restricted gambling ads in the media. Ads for lotteries and other types of gambling could no longer exceed 20% of a website’s ads. However, the Ministry of Finance deemed it too difficult to monitor and enforce this 20% rule. Thus, Bill G-849 replaced the 20% with a time restriction instead: gambling ads can now only be placed on online news websites between the hours of 10 p.m. and 7 a.m. (Armenian Time). The State Revenue Committee would be tasked with supervising and enforcing the new restriction.
In the months following the adoption of the bill, the State Control Service conducted a study that found that the volume of gambling in Armenia had actually sharply increased. The number of online betting companies also increased during the study period. While there were three companies in 2018-2019, another betting organization was formed in 2020 bringing the total number to four, which means that after the adoption of the law, another company is now contributing to the growth of gambling.
The average monthly number of players has also steadily increased: from 18,093 in 2018, to 29,911 in 2019, to 44,082 in 2020.
The amount spent by players has increased as well. This figure rose from 333 billion AMD in 2018, to 1.1 trillion AMD in 2019, to approximately 1.5 trillion AMD in just the first 10 months of 2020. The average monthly expenditures by players rose from 28 billion AMD in 2018, to 93 billion AMD in 2019, to 155 billion AMD ($310 million) in 2020.
That is, the turnover of gambling companies has increased fivefold from 2018 to 2020, amounting to about 32% of GDP, and the number of participants has doubled.
These extremely high figures are worrisome: only four companies account for all of these figures, which carries risks in terms of possible outflow of funds and money laundering.
The Latest Round of Regulation
On September 16, 2021, the Armenian Government came down hard on the issue. At its cabinet session, it approved another draft law that would ban the advertising of gambling or parimutuel betting entirely. The only exceptions provided for are on the gambling company’s own website, border entry points into the country or high-end hotels. Advertisements of lotteries or betting are also permitted in stores that sell lotteries.
It should be noted that this law enters into force six months after its official publication.
As a result of the adoption of the draft, it is expected to ensure a common policy in the sphere of gaming and establish equal competition conditions and requirements. The regulations for organizing online gambling, as well as lotteries and parimutuel betting, will be in line with the restrictions on casino and gambling advertising. This is to ensure a more balanced and competitive environment, protecting the rights and interests of consumers, and preventing activities that threaten to cause material harm to vulnerable groups (individuals and their families who oftentimes are facing financial hardship).
It should be noted that, if citizens who fell victim to gambling are in favor of the adoption of the bill, then representatives of the industry, as well as representatives of online websites, speak about the irreversible consequences of these restrictions. The vast majority of media outlets depend on revenue from gambling ads, and these new restrictions could potentially precipitate financial hardship (if not outright bankruptcy) and consequently media freedom by forcing these outlets to serve political interests.