For international iGaming operators, Turkey's gambling market poses its bargaining challenges. On the one hand, it implies stringent regulations that naturally exclude online casinos and private gambling options. In return for a highly structured approach, a certain amount of stability may prevail for those intending to operate under the regulations. Whereas compliant operators can rely on straightforward guidelines to conduct business, they can also pursue a partnership with some state-run entities like IDDAA. Another great thing about Turkey is that it houses some of the largest European populations who have a strong appetite for betting, and are in a healthy economy growing by the hour.
However, one is not spared from intensive turmoil if they step into a regulated gambling market such as Turkey, which has grown increasingly limited in international jurisdiction for a brand to compete with local brands in sports betting. It is stiffened management that seems to persist for some time, meaning if Turkish market entry is attempted, there must be overcoming the unique challenges and risks the market bears. The following sections detail an overview of calculated gains, risks, and regulatory understanding that, if acquired, would ensure a successful entrance into Turkey's tightly regulated gambling market.
History of
Gambling in Turkey
Modern gambling in Turkey corresponds closely to culture and social evolution. Informal forms of gambling were popular during the Ottoman period among military men and workers, with dice games and early backgammon mostly played for small stakes. Horse racing developed as a conspicuous pastime among the elite celebrated in luxurious races held in hippodromes and, admittedly, bets placed by the ruling and aristocracy. Such initial sports betting would later become the genesis of the controlled horse racing industry we know today.
Local strategic card games such as Pisti and Batak (likely representing many other tactical games) enjoyed growing popularity among the working class, particularly in coffee shops or at social gatherings in the early 20th century. Albeit low-stakes activities, these contributed to a culture of gambling that eventually entered everyday life. The first serious regulating milestone was arrived at in 1984 with the legalizing of betting on horse racing, effectively giving some oversight to informal practices. This was followed by the acceptance of casinos in 1990, thus starting a short and intense accelerated development phase for the gambling sector.
The casino boom was thus extremely short-lived. Concerns about social issues and happenings such as the assassination of the casino leader, Ömer Lütfü Topal, instigated a government crackdown that resulted in a total ban on casinos in 1998. Most of the businesses moved, however, to the Turkish Republic ofNorthern Cyprus (TRNC) and continued their operations under a much more relaxed set of regulations. The appetite for gambling remained, and with the continuing state-run betting platform IDDAA introduced in 2004 and the following regulation of online betting in 2006, the momentum was sustained.
Significant
Events Timeline in the History of Gambling in Turkey
1953: The Jockey Club of Turkey is Created-The Jockey Club was established to regulate horse racing and betting activities; thus, it laid the foundation for formal gambling practices. Hence, this marked the beginning of legally sanctioned betting activities.
1984: Legalisation of Horse Race Betting - Horse race betting was legalised, allowing for the regulated platform for gambling activities in Turkey. This law aimed at controlling betting and preventing illegal betting activities.
1990: Passage of the Casino Act 1990 - The Casino Act provided for the rapid growth of the gambling industry and the establishment of new casinos. Almost no regulatory control was exercised, and therefore the proliferation of money laundering and other criminal activities.
1996: Initial Restrictions on Casinos - Amendments to the Casino Act of 1990. A series of restrictions were imposed by the government in response to growing crime and corruption. Restrictions included capping operating hours and requiring winnings to be paid by cheque.
1998: Ban on All Casinos - After prominent casino owner Ömer Lütfü Topal was killed, the Casino Ban Act of 1996 was enacted, shutting down all of the casinos in Turkey. Therefore, they shifted to Northern Cyprus, where regulations were comparatively relaxed.
2004: Launch of the State-Run IDDAA Platform- Established under the Law on the Regulation of Betting and Chance Games, IDDAA is a state-run sports betting system. Once again, the purpose of this initiative was to reduce illegal betting while generating state revenues.
2006: Online Gambling Banned-The Regulation on Online Gaming came into force, making all kinds of online gambling activities illegal except those permitted by the state. This law came into effect in 2007 and aims to prevent unlicensed online gambling and to stop the outflowing of finances.
2013: Stricter Regulations on Online Gambling-Turkey enacted the Law on the Regulation of Online Financial Transactions for Gambling, punishing individual players and financial institutions involved in unlicensed online gambling with fines and imprisonment to offenders.
2017: The Privatisation Act- Was meant to grant the Turkey Wealth Fund the authority to manage and operate games of chance and horse racing bets, thus consolidating state control over the gambling industry.
2019: Licensing of Sisal-Şans Joint Venture Group-Under the National Lottery and Games of Chance Privatisation Act, the Sisal-Şans Joint Venture Group was licensed for ten years to operate games of chance and horse race betting in an effort to modernise the sector.
2023: Enforcement Against Illegal Online Gambling-The Anti-Illegal Gambling Act of 2023 was enacted to strengthen the fight against unlawful online gambling, imposing blocking access to offshore gambling websites and preventing banks from processing gambling transactions.
2024: The State Continues to Hold Monopoly on
Gambling-The state is keeping the strictest possible monopoly to all legal
gambling activities through the IDDAA platform and licensed operators despite
the challenges. Legal workings continue with severe penalties against unlicensed
operators and online gambling.
The Current
Situation for iGaming in Turkey
With considerable changes to the legal framework that began in the early 2000s, gambling in Turkey is now heavily regulated, with strict limitations on what is permissible for both citizens and operators. Betting operations directly controlled by the state, such as the national lottery, horse racing, and sports betting through state-run IDDAA, stand as the only legal channels. Nonetheless, Turkish players have maintained their interest in online gambling amidst heavy restrictions and have continued to access foreign sites. Thus, while gambling has sustained an interest among the Turkish populace, the laws have stayed conservative, emphasizing only controlled state-managed activities.
Nevertheless, Turkey's current gambling market is heavily regulated while still leaving avenues for gambling operators wishing to enter legally. Government-related activities such as sports betting through IDDAA and the national lottery have unlatched doors for operators to inquire about government-approved collaborations. This will help legally gambling-related businesses engage within a market that has an increasing consumer demand for legal gambling.
The strictly applied regulations, prohibiting online casinos and other private gambling formats, add to the rigidity of this market. Thus operators who wish to comply will find some degree of certainty and stability in such an environment. Entry is easy for the lawful actors, who, protected by a stipulated framework, may act under the guarantee of possible partnerships with the government in offering gambling services safely and legally.
Looking further into the perspective, there could be an evolution for the market. Turkey's negotiations with the EU and the potential harmonization with European standards may allow some sorts of reform to create more space for gambling activities. While no visible news is on the verge of changing, early movers who stick to the rule, form a relationship with current regulations, and place investments into strong local partnerships will find themselves on a great footing if this market enhances.
Essential
Requirements for Private International Operators in Turkey
Private sportsbook operators wishing to participate in legal gambling activities in Turkey must adhere to strict rules and regulations by the respective regulatory authorities. The Turkish Sports Toto Organisation and the Jockey Club of Turkey are the principal issuers of licenses with respect to sports betting activities; such operators must meet various critical prerequisites like including local presence, satisfying financial thresholds, or complying with anti-money laundering requirements. For foreign companies, however, a joint venture with Turkish companies is a prerequisite condition for compliance with the Turkish Commercial Code. Following are the general rules governing all types of betting activities:
1. Local
Presence Requirement
Operators must establish a local presence by setting up a joint-stock company under the Turkish Commercial Code. Such establishment ensures compliance with local business regulations and facilitates easier monitoring and enforcement by Turkish authorities. In addition, establishing a physical office for the daily operations of the firm will also be deemed mandatory for fulfilling any legal requirements.
2. Paid-Up
Capital Requirement
A minimum paid-up capital of TRY 5 million (approximately €133,000) is a requirement for the operator to obtain a licence. This financial threshold is considered an indication of the operator's financial status and ability to implement scale operations such that he is able to maintain local gambling operations without putting financial security on the line.
3. Joint Venture
with Local Companies
Foreign operators need to enter a joint venture with local companies. The essence of such workings is to see the incorporation of international expertise and practices with some level of local market knowledge. It guarantees that operators should have some level of knowledge on Turkey's unique regulatory and physical business environment and practices.
4. Meeting Data
Localization Requirement
Even though the Turkish Data Protection Law (DPL) does not stipulate data localization, it rather implicitly requires such an operation, in view of the limitations imposed on personal data. Without the explicit consent of the data subject, legal exceptions, or an adequate guarantee, data may not be transferred from Turkey; however, as of now, there is no country considered to be providing an adequate safeguard in this respect.
5. Compliance
with Anti-Money Laundering Regulations
Both local and foreign operators must comply with anti-money laundering provisions under Law No.5549 against Laundering Proceeds of Crime. This implies that operators take effective customer due diligence measures and notify suspicious circumstances to authorities, thereby keeping gambling operations clean and transparent.
6. Corporate
Governance and Reporting Requirements
Under the existing law, operators are to maintain a
clear cut corporate structure. Changes in the shareholding patterns would mean that
they would have to be approved by the relevant authority, which could include
the Turkish Sports Toto Organisation or the Jockey Club of Turkey, among
others. This rule assures that all parties are accountable and keep an eye on
regulatory issues.
Gambling
Authorities and their Role
In contrast to many other gambling jurisdictions, Turkey does not have a single authority generally overseeing and regulating gambling activities. Multiple governmental entities operate along general government regulations, each being responsible for one area, such as lotteries, sports betting, horse racing, and financial compliance. This decentralized system allows pinpoint regulation. Each of the institutions mentioned above operates independently within its specific area.
Turkish
Sports Toto Organisation
Founded in 1959, the Turkish Sports Toto Organisation is the chief authority supervising the operation of sports betting in Turkey. It operates under the Ministry of Youth and Sports and supervises both online and offline legal sports betting. The organisation issues licenses to approved operators, monitors compliance with the regulations, and ensures adherence to national betting practices. Moreover, its activities also revolve around liaising with the Ministry of Finance and the Banking Regulation and Supervision Agency to eliminate illegal betting operations and uphold financial integrity across the board in the sports betting environment.
To maintain strict control over legal sports betting in Turkey, the Turkish Sports Toto Organization collaborates with Şans Girişim. This joint venture controls fixed-odds and pari-mutuel betting on sporting events for the Turkish Sports Toto Organization. The company manages IDDAA, the main platform for sports betting in Turkey under a contract with the Ministry of Youth and Sports. Schans Girişim, in the end, supports sales to thousands of agents across the country while fulfilling its function in cooperation with significant betting platforms to provide regulated sports betting services.
Turkish
National Lottery Administration (Milli Piyango İdaresi)
Since its inception in 1939, the Turkish NationalLottery Administration (Milli Piyango İdaresi) has held a central position in Turkey's regulated gambling sector. Unlike most other regulatory bodies, it has full oversight on lotteries and engaged in actively designing and managing a wide range of games-from scratch cards to nationwide draws. The Ministry of Finance houses the Administration, which ensures that the functions it carries out comply with the laws and influence public trust with transparency. Thus, it moves beyond mere regulation as it also shapes the lottery landscape by creating innovative legal gaming opportunities that have appeal to Turks.
Jockey Club
of Turkey (Türkiye Jokey Kulübü)
The Jockey Club of Turkey (Türkiye Jokey Kulübü) is the governing body for horse racing and betting activities across the nation. Founded in 1950, it was initially set up to organize and manage races. Presently, the Jockey Club operates under Ordinance NO.6132 and comes under the supervision of the Ministry of Agriculture. The authority regulates and manages everything from licensing racetracks to determining the rules for betting, thus ensuring fair play and transparency in horse racing betting. On a day-to-day basis, the authority oversees racecourse licensing, the regulation of breeding practices, and the organization of betting activities. The club maintains strong ties with international racing authorities and also significantly impacts the online gambling operators working in the area of horse racing betting.
Banking
Regulation and Supervision Agency (BDDK)
The Banking Regulation and Supervision Agency (BDDK) is the key institution overseeing Turkey’s financial sector and which plays a significant role in regulating financial activities related to gambling in Turkey. Its ultimate aim is preventing illegal transfers and ensuring compliance with anti-money laundering laws while tracking and controlling financial transactions. Stricter regulations from BDDK for sports betting operators ensure all economic activities are conducted transparently and securely. Notably, the BDDK collaborates with other regulatory agencies to effectively execute its functions of overseeing licensed operators, thereby cementing its critical role in safeguarding the gambling sector's integrity.
Information
and Communication Technologies Authority (BTK)
Established in 2000, the Information and Communication Technologies Authority (BTK) regulates Turkey’s telecommunications and internet sectors. It plays a key role in the online gambling industry by enforcing restrictions on illegal gambling websites and monitoring Internet activity. On a practical level, BTK cooperates with other regulatory agencies such as the National Lottery Administration to block access to unlicensed gambling platforms. This ensures that only authorized operators can provide their services, impacting the day-to-day activities of both national and foreign online gambling companies.
Opportunities
and Future Outlook
Turkey's online gambling market is very exciting in what it has to offer. The sportsbook operator who is all in the business of making money should bank on this market by reaching out to over 85 million people, of whom more than 70% are below 50 and are very tech savvy. Not only is this country full of sports interests, such as football and basketball, but also includes places for sports betting. By 2028, the online gambling market in Turkey will be worth more than $2 billion, growing at a compound annual growth rate (CAGR) of 9% from 2023 to 2028.
The regulatory environment clearly lays down rules and is stringent but structured, favouring compliant players. This means that any operator complying with these regulations and forming local partnerships will be in a comfortable position to exploit this burgeoning market. Also, it was noted by legal expert Alican Babalioglu, from CMS Tax Law: "With Turkey delivering more digitalization, iGaming is within a transformational phase offering much to early investors."
"Turkey's population is growing young, and with improving technology and increasing digital access, it becomes a frontier for new opportunities available to iGaming operators," is how another commentator spoke from the gaming research society. Further, develop advancements in technology and the increased penetration of mobile internet would accelerate the growth of online gambling even more. However, the restrictions made by licensing requirements and tight financial regulations would create an environment where only authorized operators would ensure stability and security against unregulated competition.
Future reforms, especially in accord with possible European Union legislations, would liberalise the market even further, making Turkey an even more attractive option for international operators. These early investments in compliance and understanding the local market will pay off significantly as the market develops.
Market
Benefits
- Huge population strongly sports
bettors.
- Increasing internet penetration and
growing use of smartphone technology.
- Young and technologically learned
market waiting to explore online betting.
- A certain stable environment for
licensed operators created by the regulatory framework.
- Sporting interest in football and
basketball increases impose demand.
- Movement from illegal gambling activities to legal gambling.
Market
Disadvantages
- Limited diversification due to
controls on casino games and poker.
- Uncertain political and economic environments could yield adverse market conditions.
Breaking New
Ground in Turkey
To international operators willing to enter the market, the immediate legal framework creates a platform for future opportunity, not just penalty avoidance. The prevailing tension between liberalization and restriction creates a more difficult environment in which to operate; however, the returns for those who are able to synchronize successfully with Turkey's current regulatory landscape could be significant.
Your moment of leadership is here. This is your time to win big; the window is still wide open for your entry. With our validated technology and unrivaled market insight, we will help you bloom within the constraining parameters of Turkey's regulated environment. Reach out to Altenar today to learn how we can make your entry process with state-of-the-art solutions beneficial for you.
Disclaimer
This is not a legal opinion, and the
whole text has been paraphrased from publicly available information sources; it
should not be perceived as a substitute for legal advice, and for the exercise
of any such legal rights, Altenar cannot be held liable.
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