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Bwin Exits Russia & Hands Over Userbase to Parimatch
By Jeff Osienya Feb 17, 2021 IndustryEntain’s Russian sports betting brand Bwin.ru has announced its departure from Russia after a weekend of shutdown. Bwin cited harsh gaming regulation changes as the main reason for its exit and users will be migrated to Parimatch.ru.Bwin, one of the most celebrated Entain-owned igaming brands will be ending its five-year run in the Russian sports betting market to avoid the looming struggle with restrictive laws that will become effective later in the year. The prominent sports betting brand announced the closure of its Russia-facing operations after going offline for scheduled maintenance during the just-ended Valentine’s weekend and informed account holders that they aren’t coming back online.
Russian sports bettors who logged on to Bwin.ru over the weekend were met with a ‘system maintenance’ message at the home page and any efforts by users to ask for explanations about the situation were futile. The platform’s support team did not respond to the queries about the outage even via their social media handles – there was a total communication blackout!
It was only until Monday that Bwin.ru confirmed that it was permanently ceasing its sports betting operations in the Russian market, citing 'rapidly changing realities and new legislative initiatives'. Yuri Kurylenko, the Chief Marketing Officer (CMO) at Bwin further released a statement to shed more light on their reason for exit saying;
Quote“The decision to leave the Russian market was not easy, because over the past year we managed to assemble an excellent team and achieve good growth dynamics in all respects. However, due to changes in the regulation of the betting industry, it has become almost impossible to fulfil our obligations.”
What Regulation Changes are Scaring Bwin Away?
Despite the widespread industry outcry, Russian lawmakers went ahead and radically overhauled the existing gaming laws, and President Putin rubber-stamped the bill last December. As a result, later in the year, in September to be exact, sports betting operators will have to part with a 5% sports betting tax on gross gambling revenue, to be paid quarterly.
This means that starting September 2021, sportsbook operators will have to pay at least double the amount of tax money they used to pay unless they decide not to offer betting options for events out of Russia – of which the latter is practically impossible to pull off given that profits would also slip drastically.
Before the change in law, the tax used to be applicable for revenue generated from Russian events alone, but now the regulation dictates that the tax will also be applied to non-Russian sports events. The prohibitive tax cap aside, the law also introduces fresh restrictions on the types of events that locals can bet on and bans the use of a single license to cover both sports and tote betting.
Through this move, Bwin.ru follows the footsteps of VulkanBet.ru, a sports and eSports betting brand which decided to walk away from the Russian market in December last year. VulkanBet also cited the same regulatory changes as one of its key reasons for departure, officially exiting Russia’s sports betting scene on 1st January 2021.
Former Bwin Account Holders to be Migrated to Parimatch
After announcing that it was moving out of the Russian Federation, Bwin.ru further gave its users an option to hop onto a new platform, Parimatch.ru, a leading Russian sports betting brand that it had teamed up with. Thus, per the operator’s announcement, users will have their profile, complete with any account balances will be migrated to Parimatch.ru, a process that is supposed to be done and dusted within the next two weeks.
Any former Bwin.ru players who will be happy to continue betting on sports with Parimatch will then be ushered into the new platform with a ‘unique bonus offer’. Bwin’s CMO took time to explain the migration to its patrons in a statement;
Quote“In this situation, we did everything to maintain customer loyalty to the global bwin brand, and found partners in the person of Parimatch, who were technologically and operationally most ready to accept our customers without any losses for them.”
Parimatch’s CEO, Ruslan Medved, chimed in as well indicating his company’s commitment to the new influx of players from Bwin. He also showed some empathy for the departing brand which had a tough time facing off with the market’s more dominant competition in a briefing that read in part;
Quote“…not all companies are now able to compete with the mastodons and, no less important, with the market itself and its realities. It is important for us to support our partner in this difficult period and organise the transition of players, making the process as painless as possible for everyone, without compromising loyalty.”
A Sour Partnership was Part of Bwin’s Woes in Russia
Back in November 2017 when Bwin first entered the sports betting scene in Russia, it was the first western sportsbook company to launch operations in the market. The entry was possible through a partnership between its parent company now rebranded as Entain, and Digital Betting LLC, a local gaming company in Russia owned by Alexander Mamut. In this arrangement, Entain was to furnish Bwin.ru with betting technology whereas Digital Betting LLC supplied the local sportsbook license and was to fund the marketing bit of operations.
Things started going sideways in May 2019 when Dimitry Sergeyev, the then Bwin.ru CO left the company for Parimatch.ru. Fast-forward February 2020, reports surfaced that Bwin.ru had been sold to Nirevia Holdings Ltd, a Cyprus-based gaming company. Later, Sergeyev then disclosed that Digital Betting LLC never fulfilled its marketing end of the bargain as initially agreed and as a consequence, Bwin.ru’s popularity dwindled.
Ultimately, owing to such troubles, there was no way Bwin would have had a chance against Russian sports betting juggernauts such as Parimatch, BetCity, Liga Stavok, Winline, and Fonbet. It was either this exit now or from the look of things, the market would have eventually swallowed the brand alive.
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