Russia’s Gambling Watchdog Ups the Ante

Cards, dice, and laptop keyboard with padlock

The Russian telecom watchdog, Roskomnadzor, continued to up its tempo in the fight against gambling websites as it blocked another 1,500 sites over the weekend.

The agency has blocked 14,500 gambling websites so far this year. What’s more, among the slew of websites blocked over the weekend are a number of big players in the EU gambling space, including 888, Bet365, Betfair, Betfred, Betsson, Bwin, Dafabet, 5Dimes, Ladbrokes, Lottoland, Unibet, William Hill, and Winamax. That makes the latest flurry of bans one of the most significant to date.

The Stars Group alone had 13 websites blocked, which could have a significant impact on the company’s revenue.

Only a few online betting licenses granted

Russia has granted only a few online gambling licenses, one of which went to GVC Holding’s Bwin brand, which is the first Western brand to be licensed there. The Russian government, however, has still not legalized online casino products, making the Stars Group’s operations in the country illegal. There are still questions about whether or not online poker is considered illegal in the country, since some operators labeled it as a game of skill.

Online casino games, on the whole, have been banned in the country since April 2017, but Russian players have used a loophole by gambling online on websites based in other countries, which explains why the Roskomnadzor is so hot on banning online gambling websites. It has been estimated that residents spend $11.8bn on sports betting annually, with only 35% of those bets being tendered by legal betting outlets. There are currently only 15 active online gambling companies valid in the country, so the scope for more websites to be banned before the end of the year definitely cannot be ignored.

Star Group’s star players banned

In March 2017, figures released by Star Group showed that a gambling ban in the country would have a significant impact on their revenue. The company’s CEO, Rafi Ashkenazi told Bloomberg at the time that they “have plan-As and plan-Bs and plan-Cs for every type of scenarios that may happen in the market and are monitoring, we are assessing, and we are ready.” He went on to confirm that the Russian market was one of the company’s biggest revenue sources and that it would be “a blow” to have to pull out completely.

At the time of the article, Stars Group’s online gambling products were still available in Russia but, following this weekend’s crackdown, the company may need to look into implementing its Plans B and C.

The fact that the potential ban has been on the company’s radar for over a year should be a positive in that they should by now have plans for exploring other markets to make up for the predicted loss of income that will inevitably result from the Russian ban. The company is also licensed in New Jersey, United States, where the local Division of Gaming Enforcement states that they do not allow any of their online licensees to operate in jurisdictions that have laws prohibiting online gaming. If this is the case, then Stars Group may also have some questions to answer closer to home if the DGE decides to enforce that rule.

However, some commentaries suggest the regulator has not yet taken any action against companies in breach of the rule, as long as the activity takes place outside the US.


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