Turkey, officially known as the Republic of Turkey is a country that is predominantly located in Western Asia, with a small part also being located in Southeast Europe, joining the rest of the Balkan countries. While gambling has been a part of Turkey’s history for several years, nowadays, it is strictly regulated, giving Turkish people almost no legal forms of gambling they can enjoy.
Casinos have been banned in Turkey towards the end of the 20th century. Meanwhile, in 2006, the country also outlawed non-state online gambling, further restricting the industry in the country. While the government is taking strict actions to prevent illegal gambling, many Turks continue to look for ways to participate in activities that are banned by the law.
Just like land-based gambling, the online form of this type of entertainment is also deemed illegal on the territory of Turkey. While some countries do not take any particular measures to regulate online gambling, Turkey is serious about restricting access to gambling websites. What is more, through a law issued in 2013, the Turkish government started targeting individuals who participate in online gambling instead of casino operators.
While the country has banned almost any form of gambling, it has authorized IDDAA, which is a betting business owned by the state, to offer online gambling in Turkey. The monopoly type of gambling operations, however, was changed in 2017, with lotteries, horse racing betting, and sports betting rights being transferred to the private sector. To better understand the legal framework of the Turkish gambling laws, you might want to check Turkey’s gambling history and the pieces of legislation that regulate the said industry.
History of Gambling in Turkey
As Turkey is a predominantly Muslim country, the laws and the political trends in the country are often affected by religion. This is one of the reasons why gambling has been a part of Turkey’s history for a relatively short period. Placing bets on horse races was legalized in 1984 and casinos were allowed to operate in 1990.
While gambling has been legalized for a few years, in 1996, there were several amendments to the law, imposing some restrictions. With the latest changes to the law, casinos were required to be open only 8 hours a day and winnings had to be paid only by cheques. These changes were introduced in September, only a few months after the assassination of Ömer Lütfü Topal who was known as the “casino king”. Just a few months after the amendments were introduced in September, a new law was approved in December 1996, banning the operations of casinos.
The ban of casinos came into effect on 11 February 1998, with casino operations being illegal in Turkey until the present day. Despite the sudden and harsh ban, there were various casinos in the country that continued to operate illegally. Before casinos in Turkey were banned by the new law, the industry’s estimated worth was $1 billion, with about 20,000 people being employed in the sector.
To further cement a strict regulation, in 2006, Turkey banned online gambling. The new restrictions, however, were not as effective as the government was anticipating them to be. An example of the ineffective restriction was a report noting that about a quarter of Betsson’s revenue for 2009 was generated thanks to bets placed from Turkey. Determined to restrain Turks from gambling online, in 2013, the Turkish Parliament introduced harsh penalties for individuals who are caught gambling online. The government also imposed penalties for financial institutions that allowed any payments related to online gambling.
Gambling Regulation in Turkey
Gambling has been legalized for only a few years in Turkey as the country has implemented harsh laws that restrict Turks from participating in almost any type of gambling. Up until the ’90s, Turkey had a pretty liberal overview on gambling, with both casinos and horse race betting being legalized in the country. However, concerns about money laundering and other issues related to gambling became the reason for the ban of casinos, with the Turkish government amending the laws several times to tighten the grip on illegal gambling in the country.
The definition of gambling is given in the Criminal Code of Turkey, with gambling described as games that are played for gain and the outcome of these games depends solely on chance. Such activities are deemed illegal and may impose certain penalties.
While online gambling has taken over the world in numerous countries, Turkey has implemented new measures to regulate this activity and banned online gambling in 2007. The state-owned IDDAA was the only exception, with the betting company being the only operator that was allowed to offer online sports betting.
After the rights to organize and distribute sports betting were transferred to the Sisal-Şans Joint Venture Group, gaming companies Demirören and Scientific Games were allowed to legally offer games of chance and sports betting in Turkey until 2029. Currently, the only company which is permitted to operate online gambling services in the country is Demirören Group. Unfortunately, the websites operated by the company offer awful odds, limited sports coverage, and low-quality service. The interesting part is that in addition to online sports betting, through some legal loopholes, the company can also offer some online casino games.
Even after the ban of online gambling, many still resorted to placing wagers on offshore casinos. While other countries impose penalties mainly on operators that illegally offer gambling services, Turkey was the first country to target individuals who participate in illegal gambling online. According to the current laws, individuals caught in illegal online gambling may face a penalty of imprisonment between 3 and 5 years and a fine between TRY 5,000 and TRY 20,000. To further implement the ban on online gambling, in 2013, Turkey has also authorized the Turkish Banking Regulation and Supervision Agency to restrict local banking institutions and credit card issuers from accepting payment transactions to or from online casinos.
Despite the harsh regulations on online gambling in Turkey, players are still looking for ways to access foreign casino websites and gamble online. The use of VPN has become a popular method for Turkish players to bet on offshore casinos. In addition to that, the use of cryptocurrencies allows such individuals to remain anonymous and avoid being tracked by Turkish regulatory authorities. It should be noted that this is still considered illegal gambling and the Turkish government is constantly implementing new measures to restrict access to foreign gaming sites.
While offshore casinos sites are constantly being restricted in Turkey, recently, the Turkish internet service providers (ISPs) began blocking unlicensed sportsbooks and Bitcoin gambling websites. This further narrows down the online gambling options that Turkish players will be able to access.
Gambling Related Taxes in Turkey
As already mentioned several times, both land-based and online gambling has been prohibited by law in Turkey and there are no taxes applied to such activities. Meanwhile, there are also no levies on prizes won through lotteries, instant-win games, and other regulated games of chance.
Revenue generated through sports betting and horse racing betting as well as prizes won in sports or horse racing betting, non-cash lotteries, or raffles are subjected to several types of taxes. These include gaming tax, special consumption tax, income tax, inheritance tax, and value added tax (VAT).
This type of tax is applied to the revenue generated by authorized gambling activities. According to the Law Regarding Taxes, Funds and Public Charges Levied Upon Gaming revenue is the amount collected from wagers of players and bettors minus the VAT. The gaming tax applied to sports betting, horse racing, and games of chance is respectively 5%, 7%, and 10%.
The base for this tax is the amount of the participation fees and the platform access fees. The VAT rate applied to regulated gaming and betting activities in Turkey is 18%.
Commercial income, which is the income generated through commercial and industrial activities incurs an income tax of 20% on corporate income and a tax rate between 15% and 35% on personal income.
Prizes that are won through lotteries, raffles, non-cash and cash prize games, and bets incur an inheritance tax of 20% if the value of the prizes exceeds the qualified deductible amount for the respective year.
6Special consumption tax
This type of tax is applied to non-cash prizes that have been won through lotteries, raffles, bets, or games. The tax base is the monetary value of the non-cash prize and the rate may vary.
Gambling is a strictly regulated industry in Turkey and most of its forms are illegal in the country. While land-based casinos have been legally operating for a few years in the ’90s, money-laundering concerns as well as other complaints contributed to the ban of casinos in Turkey. Brick-and-mortar casinos are still illegal despite several organizations trying to make use of legal loopholes to continue offering casino games illegally.
In 2007, Turkey also banned online gaming and sports betting. The only exception is sports betting which is offered through the operator authorized to offer land-based and online sports betting. For quite a few years, lotteries, games of chance, and sports betting were organized by state-owned enterprises but in 2017, the rights for the operation of games of chance and sports betting have been transferred to companies in the private sector.
Online gambling, outside the regulated sports betting operations, is illegal in Turkey. The country has taken extreme measures that target individual players who resort to offshore online gambling instead of simply penalizing foreign casino operators. Banking institutions were also required to block any gambling-related transactions, leaving online players with limited options for funding their offshore gambling endeavors. As one can see, outside the very few legal gambling activities, Turkish players and bettors will have no options to legally enjoy casino games and other gambling options.