Russia’s budding licensed sports betting market is set to more than double over the next five years, according to a report by Bookmaker Ratings.

Russia’s sports betting market expected to grow

Growth is expected for Russia’s fledgling sports betting market as it seeks new methods to block the black market. (Image: shutterstock)

Growth will be driven by NEW entrants to the market, as more international operators begin to partner with domestic companies, and by high-profile sporting events based in Russia, like the 2018 soccer World Cup.

According to Bookmakers Ratings’ estimates, Russia’s regulated market handles around 677 billion rubles-worth ($ 10.1 billion) of bets per year, generating gross gaming revenues of 47 billion rubles ($70 million).

Over the next five years, volume is expected to grow to 1.4 trillion rubles ($22.4 billion), suggests the site, more than a 120 percent increase.

Fighting the Black Market

Russia enacted legislation to regulate sports betting in 2014, and thus, as Bookmakers Rating notes, the industry has experienced a period of transition from the illegal to the licensed arena over the past year and a half.

But Bookmakers Ratings believes some 65 percent of online bettors still use the illegal market. “The main obstacles to the transition of players to the Russian legal bookmakers, are the complexity of identity verification and desire of players to avoid playing personal income tax,” it states.

Russia practices ISP-blocking both for online gambling sites and payment processors. All licensed sites are required to partner with TSUPIS, a government-backed company and the only payment processor permitted to process online gambling transactions for Russians.

Ban on VPNs

While the black market is undoubtedly stunting the growth of the fledgling market, it may soon become much more difficult to access unregulated sites from within Russia.

A bill that will prohibit the use of virtual private networks (VPNs), and force internet service providers to block sites promoting their use, is headed to the Duma for its first hearing this month.

VPN’s allow users to disguise their locations by linking them to private networks anywhere in the world via an encrypted “tunnel,” thus bypassing an online gambling company’s geolocation software, commonly used in ring-fenced regulated markets.       

Meanwhile, earlier this month, GVC became the first international operator to enter the regulated market. It partnered with local operator Digital Betting to launch a fully licensed Bwin.ru.

This, despite the fact that many GVC-owned brands feature on a government blacklist authorizing ISP-blocking.

Russia currently licenses 29 betting companies, 11 of which take online bets. These are Liga Stavok, 1xBet, Winline, Betcity, Fonbet, Olympus, Baltbet, Leon, BingoBoom and PariMatch and a site called 888, which has no link to 888 Holdings.