GVC Holdings’ Bwin sports betting brand could soon exit the Russian online gambling market after failing to gain traction in the lucrative and highly competitive space.
Russian betting affiliate Bookmaker Ratings reported Thursday that the operator of the Bwin.ru website has been in talks to offload the operation and sell its license to an interested party.
Bwin’s Russian business is the result from a joint venture between GVC and Russian investment firm A&NN Investments, which is owned by billionaire businessman Alexander Mamut. The Digital Betting LLC joint venture was established in 2015, and the entity received a license for the provision of online sports betting services in Russia in the spring of 2016. The Bwin.ru website commenced operations in the fall of 2017.
According to sources, Mr. Mamut has been seeking buyers for Digital Betting’s license. It is believed that the businessman has long wanted to sell the license.
Another source told Bookmaker Ratings that Russian payment service provider Qiwi may have expressed interest in buying Bwin’s license and starting an all new operation under a different brand. This means that the joint venture with GVC will likely be terminated and the Bwin brand will have to exit the Russian market after lacklustre performance.
A spokesperson for Qiwi denied those reports.
Could This Be The Stars Group’s Chance to Venture Into Russia?
Among the foreign companies believed to be interested in buying Digital Betting’s license is The Stars Group, sources said. Earlier this year, the Canadian gambling giant’s CEO, Rafi Ashkenazi, said during an earnings call that they planned to apply for a Russian sports betting license with their PokerStars Sports brand.
It is to be seen whether The Stars, which is in the middle of a behemoth merger with Ireland’s Flutter Entertainment that would create the world’s largest online gambling operator, will get in the running for the Bwin.ru license. The company declined to comment on the matter.
As mentioned above, Bwin.ru failed to gain much attention among Russian bettors over the years of its existence. Back in 2016, when Digital Betting received a sports betting license, Mr. Mamut said that he would invest up to €10 million a year on marketing to make sure that his gambling business would gain foothold in the local market.
The businessman also projected that the Bwin.ru operation would cement itself in the Russian digital betting space within three years. However, the website has performed poorly over the past two years, which seems to have discouraged Mr. Mamut in his pursuit to make his wagering business a market leader.
Reportedly, Bwin.ru generated RUB433.8 million (approx. $6.8 million) in revenue last year, but recorded net loss of RUB145 million. Digital Betting’s net loss totaled RUB274 million in 2018, according to reports.
According to SimilarWeb data, Bwin.ru was among the least visited licensed Russian betting websites, recording just around 210,000 visits in September, or just a fraction of market leader Fonbet.ru’s 18.86 million visits.
Source: Владелец «Рамблера» продает свой букмекерский бизнес, Bookmaker Ratings
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