In this interview with CalvinAyre.com’s Becky Liggero, Genesis Global founder Yoav Dotan explains why his company is keeping an eye out on some emerging markets out there.
As countries, particularly across Europe, start to make significant regulatory changes concerning online gambling, where should operators go for growth?
The answer, according to Genesis Global founder Yoav Dotan, lies in the emerging markets.
“Even if the tax would be a little bit higher, it would be sensible to invest in smaller markets because there is a lot of investment to do with compliance, auditing, etc., and the markets in Sweden and in Germany especially are much bigger than central European markets like Czech Republic or Romania or other markets,” Dotan told CalvinAyre.com.
Early this year, several online gambling operators left the Czech Republic market after the country enacted its new gambling act, which requires operators based in other European Union markets to obtain a new Czech online license if they wish to continue serving local punters.
The new regime also features a stiff tax structure: tax on slot machines were increased from 28 percent to 35 percent, while all sports betting or lotteries were taxed at 23 percent. This tax is separate from the regular corporate tax rate of 19 percent that gambling operators in the country are required to pay.
“For us it’s very unreasonable and it’s not good for the local customers as well, Dotan said.
And this is why Genesis Global is keeping a close watch on potential emerging markets.
“First of all we’re looking at markets [where] you can get a license. Those markets are much more sensible in terms of taxes plus the margins are much higher because there is not a lot of competition and that’s the main reasons why we’re looking to go to emerging markets, there is more potential for us to grow,” Dotan said.
However, extensive research is needed before operators enter these emerging markets, especially in Asia where the language and culture is different.
“We look first of all at the payment solution,” Dotan said. “In many emerging markets they use only mobile phones so mobile payment solutions are very important. The marketing channels are pretty much the same as in any country… online companies it’s easier for them you know to create like, to localize the product because you know we’re used to it.”