The CIS region has shot towards the forefront of the industry’s agenda in recent weeks as legislative movements saw Ukraine approve its Gambling Law, the Russian Duma announce an overhaul of sports betting laws and taxes, and Uzbekistan form a counsel for the development of a national lottery.
CasinoBeats has cast the spotlight on the former of those region’s and has been picking the brains of four industry incumbents to discuss hopes, hype and aspirations.
Insight is provided by Julian Buhagiar, co-founder of RB Capital, Alex Ivshin, Playson CEO, Yuriy Muratov, head of account management and business development at Booongo, and Vladimir Malakchi, chief business development officer at Evoplay Entertainment.
CB: Now that Ukraine is on the verge of embracing legalised gambling, do you expect a flurry of operators and suppliers to enter Europe’s latest regulated market?
JB: Absolutely – in fact it’s already happening. Ukraine has been a lucrative greyish-white market for countless years now, and some of the most disruptive game developers and platform providers are based in Kyiv. Moreover the territory taps into a significant amount of gaming traffic from quite a few wealthy neighbouring states, so this market is widely expected to become hotly contested for operators and suppliers alike.
AI: Ukraine’s offline gambling had a strong audience before it was forbidden in 2009. Despite the difficult political situation, the government is announcing gambling legalisation almost as an advertisement, so offline operators will be more than welcome.
The online market is even more appealing as it has a bigger audience, yet we predict that it will be harder to obtain a licence due to the process involved and the sector being a novelty to the government bodies.
“The Ukrainian government has opened a new chapter in our industry’s story”
Most of the operators and suppliers that have their teams located within the CIS region will surely be taking a serious look at this opportunity, and we’ve already seen Parimatch announcing its intention on securing a licence. We expect the competition to be at a similar level to that of any other European market.
YM: While it is very exciting to see our home market on the edge of legalisation, there is still some way to go before we see a rush of companies looking to enter the market.
We’re yet to see the full extent of the framework that will be implemented and while those with close connections to Ukraine will be among the first to enter the newly regulated market, others will take a watching brief and wait until it becomes more of a viable option.
It is vital that the first steps taken are suitable for both the industry and government in order to build a secure foundation for the market.
VM: For more than a decade now, online gambling in Ukraine has been prohibited. Recent events, however, have turned the situation on its head. The law passed on the 14th of July opens a plethora of investment opportunities, as both land-based and online outlets stake their claim to a newly regulated market.
As one of Ukraine’s foremost providers, Evoplay Entertainment looks forward to sharing its groundbreaking content with our native audience. The Ukrainian government has opened a new chapter in our industry’s story, and we are excited to be a part of it.
CB: Given most forms of gambling have been illegal since 2009, how big of an appetite will there be for online casino from the public?
AI: The appetite from the gambling audience which was active 11 years ago is still there and they’re very much looking for an opportunity to play. Sports betting was partly allowed, including online, and so with recent lockdown measures and the absence of live sport, some will have switched their attention to slot games.
As the market has been illegal for so many years, it’s hard to calculate the exact number of active players. But think of it this way – if the income was so bad, why would the government decide to legalise it hoping to bring more investment and income to the budget?
“Advent of regulation is going to allow Ukrainian bettors to enjoy the full spectrum of what our industry has to offer”
YM: We know there is an appetite for online casino across Ukraine, it is just about putting players in a position where they are protected and can enjoy online slots in a safe environment. If you take a look at neighbouring Poland, where the online market is estimated to be worth over €1bn, there’s no reason why Ukraine cannot match those levels, especially given that its population is slightly higher.
VM: Since 2009, state lotteries have been the only variety of gambling legally permitted in Ukraine. This has created a market of players who are hungry for innovative new content that can provide the kind of immersive gaming experience that European audiences demand.
The advent of regulation is going to allow Ukrainian bettors to enjoy the full spectrum of what our industry has to offer, from land-based slot machines to the latest cutting-edge online games. Most importantly, they will now be protected by the responsible gaming safeguards that you get in a regulated market – which of course we are strong supporters of.
JB: The Verkhovna Rada approved bill will be especially welcomed by players, and not only from Ukraine. A lot of players in this market come from periphery states that enjoy ‘fluid’ IP segregation, but are especially more versed in VPNs and crypto payments. Suitably paired with unique compelling Russian-language content (hetalia / night watch slots anyone?) the public will be drawn to this market in droves. The question is not how big, but when.
CB: Finally, do you expect any of the region’s unregulated markets to follow Ukraine’s lead, and begin the process of regulation?
VM: From my view, European countries that have chosen to legalise gambling have seen a very positive return. The myriad benefits include enhanced player protection, greater transparency and a boost to the local economy. Experts in Ukraine anticipate an influx of up to 9 billion UAH in the first year of legalisation, so we’re talking serious numbers.
“…If a jurisdiction’s regulated framework is viewed as a success, neighbouring countries will look to follow suit”
As a European company at heart, we also hope to see additional markets follow the path beaten by Ukraine and other newly regulated territories in the CEE region. If we take a look at the historical numbers,2008 was the last full year in which gambling was fully legal in the country. Statistics from that period show a market worth around $1.4bn, so when it comes to our native jurisdiction’s commercial prospects 12 years on, the sky really is the limit.
YM: As we have seen in regions across the globe, if a jurisdiction’s regulated framework is viewed as a success, neighbouring countries will look to follow suit. In parts of Europe we see nations such as Romania, which introduced a strong regulatory online framework back in 2016, continue to thrive and grow, and that’s attractive for other governments looking to generate further funds through taxes.
Obviously, the political situation differs across every country but there’s a possibility that more nations will look to embraced legalised gambling is some way in the coming years.
JB: Not initially, and unlikely to happen anytime this year either. It’s still too early to gauge whether the licence fees in Ukraine have been properly set, and for a market to stabilise, a few early-movers need to pitch their tent first and start selling their wares.
That said, the future for this region does look promising. Parimatch’s lobbying efforts have been suitably rewarded, and will likely trigger a regulation effort across the eastern part of this bloc. Provided regulation is sensible (unlike what we have seen in Northern Europe for example) this should usher in a new chapter of adequately funded gambling tax through licensing, which is no bad thing for the industry as a whole.
AI: That’s hard to say right now. While we all want to operate in regulated markets to provide a safe and secure environment for players, it really depends on political movements. However, there’s still hope for the whole continent to become regulated within the next five to seven years. There are plenty of robust frameworks in existence that neighbouring countries can look to follow and make regulation more unified across the board.