No Love for Operators in Russia Duma's New Bill
Published December 27, 2020 by Lee R
A model that trade groups are calling extremely short-sighted may drive out many operators in Russia.
Russia operators are in disarray over revelations of details of Russia's new licensing system.
Unfriendly Adaptations
The elimination of trade associations and considerable increases in financial requirements to be paid to local sports head the list of concerns
Unsightly Details
The approval of the first reading of Bill No. 1055657-7 by Russia’s Duma legislative body replaces the two current competing bookmaker self-regulatory organizations (SRO) with one Unified Gambling Regulator overseen by the Ministry of Finance enforcing controversial new mandatory contributions from bookmakers to Russian sports bodies.
New Higher Contributions
The contributions are estimated to total 1% of the turnover generated by each respective sport, which is a huge increase from the current requiremnt of 5% of betting revenue.
The New Minimums
The minimums for bookmakers have been increased from a minimum of RUB30m (US$407k) per quarter payable to the regulator to a minimum RUB5b ($68k) per quarter to each league which the bookmaker accepts action on—with over 100 sports federations currently registered in Russia.
Concerned Trade President
First SRO president Nikolai Oganezov telling Kommersant suggests the bill has “a goal of destroying a well-functioning and only positively proven mechanism, with bill authors United Russia deputies Igor Stankevich and Viktor Deryabkin being “completely unfamiliar with the realities” of Russia's betting market.
Outsource Monopoly?
Bookmakers are also wary of the new unified regulator farming out the service to a third party, resulting in an increase in fees for betting operators and a monopoly environment.
Further Amendments Unopposed
More amendments may be submitted by Duma deputies until Decmber 22. With no opposition to the orginal reading, any ammendments are expected to receive little or no Duma opposition as well, paving the way for the bill to take effect in January.
Timeline
Logistically speaking, a new centralised payment hub is rumoured to take until spring to implement.
Environment
With 21 licensees currently operating in the Russian market struggling to stabilize after the Covid impact, Parimatch Russia CEO Dmitry Sergeyev says the 1% tax on betting turnover is likely to drive most smaller operators out of the market completely, translating to less revenue for local sports and reduced bookmaker sponsorship revenue.
Outlook
If concerned operators are right, the new regime in Russia could backfire completely.
