Will the cooperation between Parimatch and Bwin.ru be addressed by Roskomnadzor?

In light of Roskomnadzor’s large-scale blocking of thousands of online casinos and gambling-related domains, the news about negotiations between Bwin.ru and Parimatch spark great interest.

Parimatch and Bwin
In November 2017, Bwin, a popular European brand, came to the Russian market as part of a joint venture which includes GVC Holding, Digital Betting & Rambler & Co.The latter two are controlled by Alexander Mamut, a Russian billionaire.

After a series of big purchases and mergers, in March 2019, it was reported that Bwin.ru is discussing copperation with a Cypriot operator Parimatch Holding. According to a Russian newspaper “Kommersant”, Digital Betting is also negotiating with an online bookmaker 888.ru (not to be confused with a British company 888 Holdings and an online casino called “888”).

At the time of Bwin.ru launch 1.5 years ago, A. Mamut intended to invest up to €10 million a year in a marketing campaign based on the Rambler search engine. By doing so, the billionaire expected Bwin to occupy up to 10% of licensed online betting market in Russia in 3 years.

This attracted the attention of experts because of the potential effect that could affect the whole betting industry in Russia. If Bwin manages to take hold under the increasing pressure from laws and successfully cooperate with other bookmakers, the Russian market will very likely become a sweet spot for other Western companies.

Still, there are not many reasons to be optimistic yet, especially given the recent initiatives of lawmakers. In April, “RIA Novosti”, a Russian state-owned media outlet, reported about a new law that Ministry of Finance of Russia has been working on. It will forbid online sales of instant lottery tickets, which Ministry of Finance considers to be inherently similar to online casinos—and those are long banned.

State lotteries (which are small in number), for example, Stoloto, are allowed to sell tickets via websites and mobile apps; however, the offering should be limited to classic lotto games where you match numbers. Other lottery organizers have to offer tickets at special sales points and kiosks.

Meanwhile, in the middle of April, deputies of the State Duma approved in the third (and the last) reading a bill on Runet, according to which the Russian segment of the Internet will be isolated from the worldwide network. The deputies who supported it claim that its goal is to ensure the stable working of the Internet inside the country in case of any threats to its operation from abroad, but many people consider the law to be a display of censorship. The bill will come into force in November 2019.

Among the restrictive measures related to the Russian segment of the Internet is issuing a 20 million rubles grant to the Russian Academy of Sciences for developing an effective information blocking system. The system should be well-functioning by December.

It was also reported that in March Roskomnadzor blocked about 11.000 more gambling-related domains and put out a tender to cut off the access to foreign content for Russian search engines, VPN services, proxy servers and anonymizers.
Will the partnership between Bwin.ru and Parimatch be a lifeline for the dying gambling industry in Russia? How far will the State Duma go in an attempt to put limits on an indefeasible right to freely receive information? We believe the situation will be more clear by the end of 2019.

May 6, 2019