Western companies have not made any meaningful headway in the CIS market, according to operators in the region.
[dropcap]B[/dropcap]etting operators from the UK and Western Europe have failed to crack the market in ex-Soviet countries, a prominent Ukrainian bookmaker has said.
Speaking at the Betting on Sports conference in London, Sergey Portnov, CEO of Parimatch, said that the complexity of operating in CIS regions had so far meant that only businesses with in-depth local knowledge had found success there.
“At the moment, we’re not worried about Western companies coming in,” he said. “Unibet tried, and Sportingbet tried – for a while they were everywhere – and then they were gone.”
Online betting and gaming has been subject to severe restrictions in Russia recently, with the government attempting to block access to sites that offer these services.
But Portnov said that companies who knew their way around local customs could do “good business” and benefit from a market worth as much as $800m a year – as well as expecting healthy turnovers in other CIS countries such as the Ukraine.
You have to know how to swim in dark waters, if you can do that and negotiate the different obstacles you can do good business.
“You have to know how to swim in dark waters,” he said.“If you can do that and negotiate the different obstacles you can do good business.”
Aside from the unstable political situation, Portnov pointed to the risk of currency devaluationand the insecurity of the banks as potential pitfalls to operating in the region.
“We are just waiting for an accident to happen,” he said.
He also stressed that advertising for gaming products had to be done “carefully”, stating: “The government condemns gaming big time – there’s still a stigma around that.”
In the Ukraine and Belarus, where 3G internet connectivity was introduced just a few months ago, mobile currently only represents 15 percent of gaming activity.
But with better technology and access, Portnov predicted that CIS regions would echo the trends seen in the rest of Europe with mobile overtaking all other channels to become the largest segment of the market.
All of this represents a potential opportunity for outsiders, who tend to offer a more advanced and visually high-end product than local operators.
But for now, according to the Parimatch CEO, competition in the region remains a “local battle”.