RUSSIA

Why international bookies don’t expand to Russia

To date, only one non-Russian bookmaker company, bwin, is legally operating on the Russian market. This is a joint project of GVC Holdings, Rambler & Co and Digital Betting LLC. However, it is just one foreign betting operator.  For example, there are about 300 betting companies in the UK, while Russia issued licenses only to 29 operators.

Bookmakers with well-known names, such as William Hill, Paddy Power, Bet365, do not plan to join the Russian betting industry in the near future. Experts are confident that their appearance could contribute to more active development of the betting industry in the Russian Federation, improve the quality of service as a whole, and also increase the amount of earmarked contributions. What stops foreign bookmakers? According to Russian Forbes, there are actually several reasons.

Too much investment

In order to start its work in Russia, each new bookmaker must obtain a license from the Federal Tax Service (FTS). Already at this stage there are difficulties. Requirements for licensees are high. So, you must have a share capital of at least 100 million rubles. At the same time, the value of the net assets during the entire period of the bookmaker’s work must be at least 1 billion rubles. In addition, you must have a bank guarantee in the amount of 500 million rubles for at least five years.

Other investments include investments in the wage fund – at least $ 4 million, and the marketing budget for an active launch is $ 10 million. Thus, in order to start working in Russia, only in the first year the bookmaker has to spend about 2 billion rubles (about $ 31 million ), which often becomes a very high amount, even for those who have been working in the betting industry for many years. It is much easier and cheaper to get a license in Curaçao. Its cost will be about $ 34,000. It is simply not profitable for foreign bookmakers to enter the Russian market legally.

Uncertainty of legal regulation

The is no single long-term state strategy regarding regulation of the betting industry in Russia. This is the second obstacle for many foreign bookmakers. The government can enact any laws that in one way or another restrict the operation and advertising of betting companies. This makes the business unstable and even vulnerable. Taking into account the cost of the license, many companies regard work in Russia as inexpedient and risky.

Identification of punters is too complicated

Another reason, which, according to many experts, is a significant obstacle for the development of betting industry, is a very complicated procedure of double identification of punters. To bet, a player needs to register on the website of the office and the Online Rate Translation Accounting Center (TSUPIS) which processes the payments. After that, the punter must personally come to one of the betting shops with a passport in order to confirm the identity. However, the difficulty lies in the fact that foreign bookmakers usually do not have offline offices in Russia. Opening them is also very difficult. Moreover, it requires more investments.

Vague financial prospects

International betting companies primarily assess the state of the business climate in the country. And from this point of view, the strengthening of economic sanctions, the unstable ruble, the restriction of payment transactions between Russia and the European Union affect the decision of these companies.
Moreover, Russian market is small compared to regions such as Latin America or Southeast Asia.

The Russian legal bookmaking is already an established market with such major players as Fonbet, Liga Stavok, Marathon, and even the most powerful European brand cannot immediately win it. The positions of the leading operators are solid: they have been working in Russia for several years already and have managed to overcome all these huge entry barriers.

 

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