Entain-owned sports betting and iGaming brand bwin announced in a statement to its Russian customers it is shutting shop and leaving the country. The sportsbook went offline for maintenance over the past weekend and used the occasion to inform holders of accounts that the closure would be permanent.
New Legislation Behind the Decision
In a statement, bwin explained to its account holders that the decision to withdraw from the Russian market was down to upcoming new legislative initiatives, which forced the brand to prioritize other jurisdictions.
“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.”Yuri Kurylenko, CMO, bwin
Russia is preparing to implement a 5% quarterly sports betting tax, effective September 2021, which would be applicable to gross gambling revenue. The tax, which previously was applied only to sports betting on Russian events is expanding to non-Russian sporting events, setting the obligation for bookies to contribute to Russian sports federations.
Besides the controversial tax, the bill which was signed by President Putin by the end of last year, is posing limits on the types of events accepting wagers, and is prohibiting the use of the same license for sports betting and tote betting.
Migration to Parimatch
Bwin’s operations in Russia were run by Digital Betting, under the sports betting license provided by Entain after both parties signed a deal in 2016 to let the operator utilize technology and license in exchange for an annual investment of €10 million into marketing efforts by deducting fixed royalties for 3 years. By the end of the deal, in 2019, Parimatch acquired Digital Betting.
Bwin and Parimatch agreed for the migration of all accounts and funds at the former over to the latter, suggesting the decision to withdraw was a planned move. Parimatch will also offer bwin customers a bonus offer as part of the accounts transfer.
“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.”Yuri Kurylenko, CMO, bwin
Ruslan Medved, chief executive officer at Parimatch, considered bwin’s exit from the Russian sports betting market as significant as its entry, noting with regret that competitive market forces sometimes dictate some operators to leave certain jurisdictions to focus elsewhere.
“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.”Ruslan Medved, CEO, Parimatch
Medved concluded his statement by assuring bwin customers they would receive at Parimatch a level of service and quality of product on par to the one they got used to at bwin, if not better.
Bwin’s decision makes the company the latest to leave the Russian market ahead of coming into force of the new legislation, after VulkanBet, a sports and esports betting operator, announced in December that, effective January 1, 2021, the company is withdrawing from the country.