Navigating the Uzbek Gambling Market: Insights from GCA Experts

Key findings

•       Uzbekistan's population stood at 37 million at the end of 2023, with a projected annual growth rate of 2%. The potential gambling audience (aged 18 and older) is about 32.14% of the population, roughly 11,892,000 people; after a reduction of about 40% for religiosity, traditional upbringing and pensioners, partly offset by traditionally high interest in gambling, the volume of potential clients is estimated at 7,092,000.

•       In 2023, Uzbeks spent about $1 billion on online gaming according to official data, while unofficial estimates suggest a figure 7–8 times higher. Income generated by illegally operating operators may reach up to $2 billion, and the state loses over $100 million in taxes under the current tax regime.

•       Player value differs by sector: online casinos (CPA approx. $100, ARPU around $1,800 per month, LTV $21,600 over 12 months), sports betting (approx. $90, $1,500, $18,000), poker (approx. $80, $1,200, $14,400) and lotteries and instant games (approx. $70, $600, $7,200).

•       Online casinos remain the most profitable sector and sports betting also shows high ROI, lotteries and instant games have lower profitability metrics but remain viable, and poker offers a good balance between acquisition costs and revenue.

•       The tax on activities is set at 4% of turnover after deducting all winnings and returned bets; winnings are exempt from personal income tax; the rules do not require beneficiaries to obtain residency but outline how ultimate beneficiaries are identified; a betting accounting centre will oversee gambling companies.

•       Legalisation, stronger regulation and the fight against illegal operators are expected to reclaim lost funds for the state budget, improve conditions for local players, attract foreign investment, operators and tourists, and support sustainable growth.

Main Analysis

Background

As Uzbekistan moves toward the impending legalisation of gambling in 2025, the demand for licences from various operators is on the rise, reflecting a burgeoning interest in tapping into this potentially lucrative market. This growing demand underscores the urgency for a comprehensive analysis of the gambling landscape to better understand its dynamics, challenges and opportunities. This market analysis aims to provide valuable insights into the current state of gambling in Uzbekistan, highlighting the factors influencing its development and the potential for future growth.

Demographics and Potential Audience

As of the end of 2023, Uzbekistan's population stands at 37 million, with a projected annual growth rate of 2%. The working-age population, between 16 and 60 years old, is approximately 20.8 million. At the beginning of 2024, the average nominal wage in Uzbekistan is around 4.92 million sums (approximately $388.60), while in the capital, Tashkent, the average salary is higher at 8.12 million sums (approximately $642).

Based on these figures, the potential audience for gambling, which includes individuals aged 18 and older, constitutes about 32.14% of the total population, equating to roughly 11,892,000 people, of whom 965,000 reside in Tashkent. Given the high religiosity of the population (89% adhere to Islam), traditional upbringing and the presence of pensioners, the potential audience is reduced by about 40%. However, this factor is partially offset by the traditionally high interest in gambling inherent in Asian cultures. Thus, the volume of potential clients is estimated at 7,092,000 individuals.

Sports Orientation, Spending and the Illegal Segment

Uzbekistan is one of the most sports-oriented countries in the region, with a particular interest in football. The national team actively participates in international competitions, generating high demand for sports betting.

In 2023, Uzbeks spent about $1 billion on online gaming according to official data, although unofficial estimates suggest this figure is 7–8 times higher. On average, a player spends up to $1,000 annually on gambling. Given these figures, the income generated by illegally operating operators in Uzbekistan may reach up to $2 billion, resulting in the state losing over $100 million in taxes under the current tax regime. This figure represents the net income from gambling activities in the GGR tax. Other taxes resulting from the gambling industry taxation and the growth potential of this sector, considering its geographical features and neighbouring states, should also be taken into account.

Player Value by Sector

To detail the player value in the gambling business in Uzbekistan by sector, key performance indicators (KPIs) were analysed, including cost per acquisition (CPA), average revenue per user (ARPU) and lifetime value (LTV). The results of the calculations are as follows:

The key points can be summarised as follows:

•       Online casinos remain the most profitable sector with high income per player and significant ROI.

•       Sports betting also demonstrates high ROI due to engagement and active participation.

•       Lotteries and instant games have lower profitability metrics but remain viable.

•       Poker provides a good balance between acquisition costs and revenue.

These calculations indicate that operators looking to thrive in the Uzbek market should focus on active sectors with high income, optimising their expenses for player acquisition and retention.

Regulatory and Tax Framework

The regulatory body responsible for managing and licensing gambling activities will issue licences.

The tax on activities is set at 4% of turnover after deducting all winnings and returned bets. Individuals receiving winnings will be exempt from personal income tax. The new regulations do not specify a requirement for the beneficiaries to obtain residency but clearly outline the rules for identifying the ultimate beneficiaries of companies. Additionally, a betting accounting centre will be established to oversee the activities of gambling companies.

Conclusions

The gambling market in Uzbekistan has significant growth potential, facilitated by the expansion of legal opportunities and the attraction of foreign investment. Enhanced regulation and the fight against illegal operators will help reclaim lost funds for the state budget, improve conditions for local players and attract more international operators and tourists. Further reforms in this sector are expected to lead to sustainable growth and improved infrastructure, positioning Uzbekistan as a leading centre for the gambling industry in Central Asia.

The expansion of legal opportunities includes licensing operators, which will increase state revenues through taxes and licensing fees. Attracting foreign investors will ensure the influx of capital and technologies necessary for industry development.

Strengthening regulation and combating illegal operators will reduce the outflow of funds abroad and increase state budget revenues. This will also create safer and more transparent conditions for players, enhancing trust in legal operators. As a result of these measures, sustainable growth in Uzbekistan's gambling market is anticipated, along with improved infrastructure and the creation of new jobs. This will make Uzbekistan an attractive centre for international operators and tourists, fostering the country's economic development.

GCA provides regulatory analysis, market-entry strategy and expert assessments for governments, regulators and operators. Contact: gcauthority.com