Bookies puzzled as Fonbet makes Russia’s economic ‘backbone’ list


fonbet-sports-betting-russia-economic-backboneRussian sports betting operator Fonbet has been named part of the ‘backbone’ of the national economy, prompting wary skepticism among its local rivals.

Last week, Russian news agency Interfax reported on a new list of ‘systemically important organizations’ whose financial health a government commission has determined require monitoring. The aim is to ensure the sustainability of the economy amid the double whammy of the COVID-19 pandemic and the collapse in the price of oil, Russia’s primary export.

Among the 646 companies making the grade was LLC F.O.N. aka Fonbet, Russia’s leading sports betting operator. Precisely why the government apparently feels the bookmaker is too big to fail is unclear, but its inclusion will permit Fonbet to apply for state aid during this current downturn (and possibly in the future).

It remains to be seen if Russia’s other bookmakers will be allowed the same opportunity. Last month, Russia’s two sports betting industry associations asked the government for tax and business rates relief, as well as for permission to forego their mandatory annual contribution of 5% of their betting revenue to local sports – the dormancy of which is among the reasons that Russia’s bookies are in such trouble.

While Fonbet is Russia’s unquestioned online betting traffic leader, rival BetCity was named one of Russia’s top-500 companies in 2018, yet it failed to earn the ‘systemically important’ designation. BetCity ranked sixth on February’s online betting traffic report with 2.75m visits, about one-third of Fonbet’s score.

Other Russian bookies reacted to Fonbet’s inclusion on the list with a mix of puzzlement and disdain. Bookmaker Ratings quoted Betcity exec Nikolai Oganezov saying he suspected there was “some kind of catch” to Fonbet’s new designation and he didn’t see this development as “a very good signal” for the rest of the betting market.

Liga Stavok exec Igor Stolyarov was more blunt, saying “we do not pretend to receive state subsidies, we do not ask to protect us from bankruptcy.”

Like many of its competitors, Liga Stavok has attempted to fill its current sports void with eSports betting options. Other bookmakers, such as, have opted to temporarily suspend all activity until sanity is restored to the markets. Poolbet, Russia’s only online tote betting operator, also stopped accepting bets last week.