TG Talk: Assessing the regulatory situation for sports betting in Russia

TG Talk: Assessing the regulatory situation for sports betting in Russia

Thursday, October 26, 2017 Posted by Craig Davies
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There will be a session exploring opportunities in the CIS region at EiG 2017

Russia is going through regulatory changes that could increase the appeal for what is a relatively untapped sports betting market.

Ahead of a session at EiG 2017 focusing on the true level of this opportunity, and with the country preparing to host next year's FIFA World Cup, we caught up with two of the industry's leading voices for their take on the current regulatory situation...

Setanta Sports Media CEO and Founder Lasha Machavariani said: “The Russian Government has already made the move towards regulating the online betting in the country.  

“Two years ago, betting was only considered legal and licensed for offline, and so betting operators such as Liga Stavok, Fonbet and 1xbet only had the legal right to operate offline. Recent changes in legislation have improved the betting atmosphere and thus the offline operators acquired the rights for legal online operations as well.

“Where betting operators were obliged to operate with the mirror sites to avoid blocking and officially denied the fact that the offline brand and the same online brand had the links, today they do operate under a single ru domain.

“This fact has very much limited opportunities for the international operators that historically enjoyed a big portion of turnover from Russian betting. But it also led to the case of an international betting operator acquiring the local license and creating a JV with a very well respected Russian Holding. Bwin.ru is the newly launched international brand on a local license targeting Russian players.”

Bookmaker Ratings Founder Paruyr Shahbazyan explained: “The current situation is that bookmakers are legal, the barriers to entry for new players are very high, and the requirements for obtaining a licence are huge.

“Changes in the regulatory situation has slowed down. Probably, we will not see any changes in legislation which regulates how operators interact with their clients. Everyone in the industry wants to remove the personal identification process, which is killing the conversion rate.

“I have talked numerous times with biggest operators. The rivalry among them is too strong to enable them to collaborate on this issue and lobby the required changes.

“There may also be upcoming changes in taxation. The initiatives from authorities are very aggressive, with some of them proposing to increase the tax by 10 times.

“Personally, I think the tax rate can be increased, but not more than two times. Actually, more taxes can help the gaming industry to bring down the ban on casino games. If, after 2018, the sports betting industry pays a significant amount of taxes, authorities can look into regulating online casinos.

“The official reason for its ban was the harm to society. Since every player now has to pass KYC procedure personally, blacklisting addicted players can actually work. Thus, there will be no harm to the society. Maybe I’m too optimistic, but I really see an opportunity here.”

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