Russia’s bookmaker ranks are already thinning in response to the government’s proposed new regulatory environment.
On Tuesday, Russian-licensed betting site VulkanBet.ru announced that it would “cease to operate on the territory of the Russian Federation from January 1, 2021.” The site has already stopped accepting new wagers and customer registrations, but promises to honor “all obligations to players and contractors” by December 31.
VulkanBet.ru launched in June 2019 and the company humble-bragged that it had since become one of Russia’s top-three eSports betting platforms. But the company said it plans to “focus its development on markets with more loyal conditions for conducting betting business.”
The message didn’t explicitly say so, but VulkanBet was referring to Bill No. 1055657-7, which (for starters) aims to impose a new 1% tax on betting turnover to fund contributions to local sports bodies (with significant quarterly minimums per league per operator), while also scrapping the country’s two rival betting industry groups in favor of a new Unified Gambling Regulator.
VulkanBet did say that it would continue to “monitor the development of the situation in Russia and does not exclude the possibility of a return to the Russian gambling industry in the future.”
VulkanBet spokesperson Anna Dmitrieva later issued a statement saying the proposed legislation – which is scheduled for its second reading in the Duma on December 22 – contained details that “arouse suspicion and do not give confidence in the future.”
VulkanBet had sponsored several eSports teams and tournaments, as well as an amateur football league, and Dmitrieva said the company was “ready for an increase in earmarked contributions [to Russian sport] but not in such volumes.”
Dmitrieva told Russian affiliate Bookmaker Ratings that the company would finish 2020 in the black, with revenue up 15x from its half-year of operations in 2019, and more than 2m individual bets accepted. However, SimilarWeb data from the past few months showed VulkanBet ranked dead last in site traffic among Russia’s online bookies, below even the much-maligned Bwin.ru.
VulkanBet isn’t the only Russian site to have determined that Russia’s current market climate is inhospitable to all but the big boys such as Fonbet, Winline, Liga Stavok and BetCity. This spring, 888.ru (not related to the UK-listed 888 Holdings) shut down as the sports calendar dried up amid pandemic panic. Like VulkanBet, 888.ru was a traffic cellar-dweller.
It remains to be seen how many more of Russia’s betting minnows may choose to pack it in rather than see their revenue bled dry from mandatory sports contributions. In the meantime, the regulatory uncertainty will almost certainly deter other potential operators from throwing their hat into Russia’s ring.
