Wednesday, August 17, 2022

Bookies embrace online as murky legislative waters clear


Russia’s bookmakers see their future as being online, with some major players closing down traditional betting shops to focus on the interactive sector.

This year’s Russia Gaming Week reflected that trend with some bookies saying they had eschewed booths at the show to channel funds instead to the development of online services.

This was the 11th edition of the event and attracted 2,500 participants, far short of the 4,000 it gathered in 2015. Attendees said the show was noticeably quieter than last year. 

Major bookmakers' booths and representatives of land-based casinos were lacking and were replaced by companies mainly offering B2B solutions. 

In contrast to previous years, when booths of Russian and CIS bookmakers were in abundance, this time only separate representatives of major brands, such as Fonbet and Liga Stavok, were present at the venue mainly to discuss business deals. 

Bingo-Boom president and chairman of the Association of Bookmakers Konstantin Makarov said that this year his company decided to spend the money usually allocated for booths at RGW on the development of interactive bookmaking. 

Another bookmaker, PariMatch, announced on the eve of the conference that it has closed its 27 betting shops across Russia “after it analysed mid-term and short-term trends of the Russian and global market.” Its CEO Anatoly Merezhko said that “we think that the future lies with online gambling and dynamically developing mobile betting.” 

There are some some 7,000 bookmaking outlets across Russia, but the number is shrinking as the picture in the online world becomes clearer.

Russia passed legislation to regulate online sports betting in 2014, though its implementation was repeatedly delayed. The industry will be governed through a system of Self Regulatory Organizations with all payments to be processed through a centralized system, known as TSUPIS. The first of which was finally launched in early 2016.

Although the legislation appears to be still evolving, the government has been cracking down hard on international operators offering their services to Russians from outside the country to foster growth at home. Gibraltar-based Betvictor was one of the most recent to leave, announcing its exit in February. They also prohibit online casino games and online poker.

There are currently only around 10 bookmakers approved to offer online wagers to Russian punters, with 1xbet the traffic leader, followed by Fonbet and Liga Stavok.

However, in a sign that there is still international interest in the market, Bwin in early June launched a new service with ambitious plans. 

Bwin Russia CEO Dmitry Sergeev said during a presentation last week that the original work on the project began more than two years ago when he was working for Digital Betting. Bwin.ru is a joint project of GVC Holdings and two companies belonging to businessman Alexander Mamut, Digital Betting and Rambler & Co.

At that time, the TSUPIS had not yet been launched, and illegal bookmakers were uncontrolled. But he said the company decided to be proactive, and the subsequent changes in the law allowing legal bookmakers to actively develop proved that it was the right decision. 

According to Sergeev, the annual volume of Russian e-betting amounts to 140 billion roubles ($2.4 billion), of which 30 billion roubles translates to bookmakers' annual profits. 

Digital Betting, which got a bookmaking licence in March 2016 and later joined the First SRO [self-regulating organisation] of bookmakers, will operate the business under licence and be responsible for marketing and global support of the platform. The two Russian companies are expected to invest about 10 million euros per year on Bwin.ru's development.

The company has a target to gain a 10 percent share of the market and become one of the top three in Russia. It expects to start processing the first e-bets in September and focus on online only. 

First SRO president Yuri Krasovsky expressed his optimism over Bwin’s move, calling it proof of “normal control over bets in Russia and foreign bookmakers’ desire to tap into the Russian market." 

Lawyer Maria Lepeshchikova said Bwin will have to abide by the same rules as local licensees.

"They must acquire a company that has a Russian licence. All holders of [bookmaking] licences work in accordance with established rules. The only exception is companies that received a licence before 2010, which have to fulfill slightly less harsh requirements,” she added. 

As a reflection of the interest in the online sector, one of the most popular sessions at RGW was the latest on the bookmaking legislation.

In particular, experts discussed the newly adopted law which requires 5 percent of their profits from sports on which they take bets to be allocated to development of sports. In return they are able to advertise during events. 

The overall amount of the payment must be at least 15 million roubles per quarter. But, according to lawyer Maria Lepeshchikova, the law does not stipulate any punishment in case bookmakers refuse to comply.

“Now a bill on banning bets on non-sports events is being discussed. So, those bookmakers who refused to make these deductions, they, let's say, provoked the progress of this law,” she added.

Another lawyer, Yulia Nemtseva, said the law allows bookmakers to advertise on TV, radio and online broadcasts, but the overall share of such advertising is limited to 20 percent of the entire сommercial airtime. 

At the same time the law upholds the existing ban on images of people and animals, so a sports player mustn't wear a T-shirt with a bookmaker's logo during a live broadcast, otherwise the advertiser will be fined. She recommended branded uniforms be worn only during promo events.

As in the previous year, land-based casinos were put on the back burner at the conference, with organisers calling on their representatives “to not keep low profile and discuss burning issues.” They are considering another conference dedicated to the land-based sector. 

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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