tender

economy.gov.by

tender

Investment project:

Setting up a Gambling Business Monitoring

Center in the Republic of Belarus

Tender.

Tender offers submission:

till 23 rd November 2011

Ministry for Taxes and

Dues of the Republic of

Belarus


Table of contents

Sections

1. Resume……………………………………………….……..3

2. Republic of Belarus. Key facts……………………….……5

3. Gambling business in Belarus. Brief description...………8

4. Tender conditions……………………..…………………...11

5. Tender offer requirements..…..………………..…………15

6. Tender process stages………………………….…………18

7. Next steps and Q&A………….………………….….........20

2


Resume

3


Resume

• At the beginning of 2011 the Council of Ministers of the Republic of Belarus submitted the

Concept of Gambling Business Development in the Republic of Belarus, which stipulates

that Belarusian gambling industry should progress in compliance with the world trends and

international experience. According to the Concept attracting foreign investments into the

gambling industry is among the top priorities for the business further development.

• The Concept of Gambling Business Development in Belarus suggests that through a

tender process and with no state funds raising a commercial organization – a monitoring

center – will be created. This commercial organization will operate a special computer

cash register system and on a real-time basis round-the-clock will provide public

authorities with a full and reliable information of gambling companies` money flows and

casino payouts.

• The Republic of Belarus announced a tender for defining the best investment offer for

setting up the gambling business monitoring center in Belarus and invites all

interested parties to participate in the tender.

Legal basis for the tender: Decision of the Council of Ministers of November 3, 2011 № 1477 “On the tender for

the best investment proposal for setting up a gambling business monitoring center in the Republic of Belarus”.

4


Republic of Belarus.

Key facts

5


Republic of Belarus. Key facts

Area 207.6 thsd sq m

Population 9.5mn

Capital Minsk (1.9mn)

GDP in 2010 $54.7bn ($49.2bn in 2009)

Exports in 2010 $25.3bn

Imports in 2010 $34.8bn

4%

5%

7%

13%

18%

22%

18%

Food and beverages

Industry structure, 2010 %

4% 9% Fuel industry

Chemical and petrochemical

Electricity

Construction materials

Timber, woodworking, pulp

and paper industry

Light industry

Belarus ranks 69 in «Doing Business 2012»

(«Registering property» - 4 th place)

Advantages of doing business in Belarus:

• Full protection given to foreign investments

and a variety of channels available to

businesses to engage with the government

• Active reforms aimed at business liberalization

• Launch of the large-scale privatization

program

• Country is constantly developing new

initiatives to:

reduce red tape for business: "one

window" approach

attract international SMEs

provide preferential tax treatment for

investors (including six Free Economic Zones

and a High Technologies Park (HTP).

• Customs Union (Belarus, Russia, Kazakhstan)

• Highly skilled workforce

Other

6


Gambling business in Belarus.

Brief description

7


people

Gambling business in Belarus. Brief description (1)

There are 110 companies licensed for

conducting gambling business, among them 100

are actually active on the market. There are

casinos, arcades and betting shops present in

Belarus.

Slot machines account for 96.4% of the total

amount of gaming equipment. In 2006-2010 slot

machines occupancy index decreased due to an

increase in their quantity.

In Belarus, gambling businesses are equipped

with slot machines, manufactured in more than

20 countries. Slot machines produced in Austria

and Russia account for about 75% of all

registered gaming machines, the share of

Belarusian manufacturer “Belatra” Ltd. is 10%.

Gambling

service/objects

Number as of

1 st October

2011

Of them in

Minsk

Casinos 33 18

Gamble table 196 144

Arcades 286 86

Slot machines 8383 2874

Betting shops 157 36

3000

2000

1000

0

Betting shop cash

desks

2631

1594

934

170 44

Slot machines occupancy index

784 768

890

2006 2007 2008 2009 2010 9М

2011

8


BYR bn

Gambling business in Belarus. Brief description (2)

Taxes on gambling,

actual prices, BYR bn

40% of overall gamble taxes are paid by:

100

80

60

40

20

28,5

43,9

61,9

70

80,4

1 «Edinaya prizovaya sistema FLASH ROYAL», Ltd.

2 «STEK Victory», Ltd.

3 «Maxbet», Ltd.

4 «Saneko Plyus», Ltd.

5 JV «NOVO-ВР», Ltd.

6 «Kulturno-razvlekatel`nyi centr «Victoria», Ltd.

0

2007 2008 2009 2010 9М 2011

7 FE «Olympic Casino Bel»

8 «Smart Games Slot», Ltd.

Tax rates on gambling:

BYR 16 780 000 – gamble table;

BYR 639 000 – slot machine;

BYR 5 719 000 – totalizator cash desk;

BYR 1 720 000 – betting shop cash desk.

Major casinos in Belarus:

XO

Diamond Princess

Victory

XO

Shangri La

9


Gambling business in Belarus. Brief description (3)

Main legislative acts regulating gambling business in Belarus:







Decree of President of the Republic of Belarus of November 19, 2010 № 599 "On certain

measures to improve the implementation of activities in the gambling business";

Decree of President of the Republic of Belarus of September 1, 2010 № 450 "On Licensing

Certain Types of Activities";

Decree of President of the Republic of Belarus of January 10, 2005 № 9 "On Approval of

Regulation of activities in the gambling business in the Republic of Belarus";

Tax Code of the Republic of Belarus;

Resolution of the Council of Ministers of February 18, 2011 № 211 “On some measures for

the implementation of Presidential Decree of November 19, 2010 № 599”;

Resolution of the Council of Ministers of January 12, 2011 № 31 “On approval of the Concept

of gambling business development in the Republic of Belarus”;

Decision of the Ministry for Taxes and Dues of the Republic of Belarus of March 23, 2011 №

17 “On the requirements to the rules of organization and conduct of gambling, except for

games on slot machines”.

10


Tender conditions

11


Tender conditions (1)

Main tender conditions:

Setting up the monitoring center (without raising state funds) and providing its operation for

at least 10 years;

Gratuitous transfer into the ownership of the Republic of Belarus of at least 25%+1 share of

a charter capital if a joint stock company is created, or at least 25% if any other business form is

applied;


Investor`s commitment to invest into the creation and operation of the monitoring center;

Investor`s commitment to keep the information safe and confidential, as well as to provide

the public authorities with a full, reliable and round-the-clock data about the gambling

businesses` operations; responsibility taken by the investor for failing to meet these

requirements;

Development of control facilities applied by the monitoring center in consideration of

technical standards and legal acts requirements;

Information security facilities used by the monitoring center should implement domestic

cryptographic standards of data security;

The special computer cash register system should enable to receive and verify the reliability

of the accountable information of gambling business functioning.

12


Tender conditions (2)

Other tender conditions (defined by the Interagency Committee):

Organizational

1. Obligation taken by the investor to sign an

investment agreement no later than 10 days from

the date the authorized body took decision on the

conclusion of the investment agreement;

2. Experience of implementing control systems in

the gambling business;

3. A developed feasibility study of the project;

4. The monitoring center should be located on the

territory of the Republic of Belarus;

5. Provision of personnel training – users of the

monitoring center controlling system in the territory

of the Republic of Belarus, on a free-of-charge

basis;

6. Obligation taken by the investor to create a

network of equipment maintenance and repair

centers, planned to be used by the monitoring

center, as well as by the supervising body or

gambling businesses;

7. The company that carries out the functions of the

monitoring center, should not participate in the

organization and conduct of gambling on its own or

as part of other organizations, according to the

legislation of the Republic of Belarus;

Economic

1. Provision by the investor of installation, upgrade

and maintenance of software and hardware

systems (including workstations of the supervisory

body) in the supervisory body (as defined by law)

to ensure full and unimpeded access of the

supervisory authority to all the information on a

real-time basis (on-line) in accordance with law;

2. Depreciation of the hardware and software

system of the monitoring center no earlier than 5

years from the date of launch of its commercial

operation;

3. Limiting the profitability of services provided by

the monitoring center to gambling businesses in

accordance with applicable law;

4. Possibility to produce components and

assemblies of the hardware and software

monitoring center in the Republic of Belarus;

13


Tender conditions (3)

Other tender conditions (defined by the Interagency Committee):

Technical

1. The monitoring center should provide the storage of information on gambling for the period of no less

than 3 years;

2. State examination and certification of information security and certification of the system in accordance

with Resolution of the Council of Ministers of May 26, 2009 № 675 "On some issues of information

security";

3. The monitoring centre shall inform the supervisory authorities of any unauthorized interference with

gaming equipment or running gaming equipment with the control system turned off;

4. Establishment of the hardware and software monitoring system of the monitoring center with the

possibility to connect gaming equipment to international protocols, including SAS 5 and above, and G2S;

5. Use of digital signature and cryptographic protection in the software and hardware system of the

monitoring center in accordance with technical regulations of the Republic of Belarus;

6. The software and hardware system of the monitoring center should :

- allow the possibility to use communication channels with bandwidth of at least 128 kb / s;

- provide a convenient user interface and technical and operational documentation in Russian;

- be able to work simultaneously with no less than 10 thousand units of connected gaming equipment;

7. The control system of the monitoring center should be able to run software and hardware techniques to

identify gambling participants, as well as to limit participation in the game of persons designated by law;

8. The hardware and software system of the monitoring center should be developed in accordance with

the requirements of technical normative legal acts of the Republic of Belarus – GOST 34.601-90, GOST

34.201-89, GOST 34.602-89;

9. Investor`s obligation to provide the full source code of software components of the hardware and

software system of the monitoring center;

10. Investor`s obligation to develop a system in accordance with the technical specifications agreed with

the Ministry of Taxes and Duties of the Republic of Belarus.

14


Tender offer requirements

15


Tender offer requirements (1)

Tender offer must contain:

1. Tender bidder details (name, address, telephone, fax, e-mail);

2. Full name of a person, authorized to act on behalf of the tender bidder and sign all the

necessary documents in the course of the tender process;

3. Business and types of activities description;

4. Description of the system planned to be installed;

5. Description of the applied technology accompanied by the system architecture and

possible technical documentation for peripheral equipment;

6. Description of prior experience of installing similar systems in the world;

7. Other data certifying that the bidder meets the tender requirements.

The following companies are not accepted to participate in the tender:

Those in the process of reorganization, liquidation or recognized bankrupt;

Those which provided invalid data to the Interagency Committee;

Those who have sent their tender offers after the deadline or violated the tender rules

stipulated by Decision of the Council of Ministers of November 3, 2011 № 1477 “On the

tender for the best investment proposal for setting up a gambling business monitoring center

in the Republic of Belarus”.

16


Tender offer requirements (2)

The tender offer must be accompanied by:

1. A brief feasibility study of the investment project (in a free format) which contains the

information on the size and source of investments, project implementation period, expected

socio-economic effect, and any other information about the project;

2. Copies of the document on the establishment of the company and the Charter (Articles of

association for legal entities operating on the ground of the Articles of association) (applicable

to domestic companies);

3. A legalized abstract from a commercial register of the country where the foreign company

is established, or any other equivalent proof of the legal status of the foreign company in

accordance with the foreign country`s legislation, dated no earlier than 6 months prior the

tender offer submission (applicable to foreign companies only);

4. Copies of financial reporting as of the last reporting date (balance sheet, income

statement, cash flow statement);

5. Other data requested (please see appendix)

The copies of the documents stated in clauses 2 and 4 should be certified by the

director of the bidder company, or any other authorized person.

17


Tender process stages

18


Tender process stages

Tender process phases

The tender documentation sets out the following tender process timeline:

Bidding phase

Publication of the tender

notification in mass media

(5 th November 2011)

Tender offers submission by

bidders (23 rd November 2011)

Assessment of the submitted

tender offers (during 50

calendar days)

Submission of documents for signing

the investment agreement ( in

accordance with Regulation on

signing, amending and terminating

investment agreements with the

Republic of Belarus, approved by

Resolution of the Council of

Ministers of August 6, 2011 № 1058

Announcement of the

best tender offer

Financial close

19


Next steps and Q&A

20


Next steps and Q&A (1)

Tender offers must be submitted by !!!

Tender offers must be submitted by 12 pm Minsk time 23 rd November 2011 to the Ministry for

Taxes and Dues of the Republic of Belarus. Address: office 208, 9 Sovetskaya str., 220010

Minsk.

Tender offer (with the appendix filled in) accompanied by the copies of the documents must be

submitted in Russian.

Tender offer is accepted in sealed lightproof double envelopes. The outside envelope should

contain a covering letter, the internal one – the tender offer and (copies of) the documents

(stated on page 14). The tender name, the address of the Ministry for Taxes and Dues of the

Republic of Belarus, the name, address and telephone of the bidder company should be

indicated on the outside envelope. The envelopes are registered by the Interagency

Committee`s secretary in the order of receipt with the date and reference number specification.

Date and place of the tender:

23 rd November 2011, 15 pm

Office 211, 9 Sovetskaya str., 220010 Minsk

Reimbursement of expenses for organizing and conducting the tender:

The winner will be required to reimburse the costs of organizing and holding the tender in the amount of

BYR 6 414 500.

21


Next steps and Q&A (2)

In case of any questions please address your inquiries to the Advisors:

Ministry of Taxes of the Republic of Belarus:

Valentina Shilyaeva

Consultant of Licensing and

Gambling Control Department

Tel.: + 375 17 229 79 81

Email: gnk@mail.belpak.by

Marina Nevinskaya

Principal State Tax Official of

Licensing and Gambling Control

Department

Tel.: + 375 17 229 79 81

Email: gnk@mail.belpak.by

Yulia Kozhemyakina

Secretary of Interagency

Committee

Tel.: + 375 17 229 79 81

Email: gnk@mail.belpak.by

National Agency of Investment and Privatization

Dmitriy Klevzhits

(for the enquiries of foreign investors)

Director

Tel.: + 375 17 222 68 41

Email: kd@economy.gov.by

Additional information can be found on

the web site of the Ministry of Taxes

and Dues of the Republic of Belarus:

www.nalog.by

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