Risky but Rewarding: Best Markets for Online Gambling in Eastern Europe

Online gambling industry experts highlight countries of the former Soviet Republic as emerging markets.

If you’re looking for a new investment opportunity, you might want to consider one of the former Soviet Union Commonwealth of Independent States (CIS) states. As European gambling laws can sometimes seem restrictive, allowing fewer operators in each country, Eastern Europe has a lot of potential for growth.

In his guide to internet gambling in Eastern Europe, Sergei Efimenko, chief operating officer of leading local operator Favbet explains that players in the area can be inexperienced and the market can be risky. But despite these risks, industry experts have tagged Eastern Europe – along with Africa and South America – as an emerging region that offers new opportunities for development.

Here’s a more detailed analysis of the online gambling market in the CIS, country by country:

Russia – In all of Eastern Europe, Russia is probably your best bet. But before you rush into it, you should know that online casinos in Russia are having a very hard time. This country offers the most potential, but also the highest degree of risk.

The Commonwealth of Independent States or Russian Commonwealth includes the following countries:

• Armenia
• Azerbaijan
• Belarus
• Kazakhstan
• Kyrgyzstan
• Moldova
• Russia
• Tajikistan
• Uzbekistan

First of all, there is no stability. Gambling laws keep changing and whenever they do, they seem to encourage oligopoly or monopoly. Hundreds of betting shops have closed over the past few years, as these policies are driving gambling operators away. But most importantly, internet gambling is prohibited, so getting a license for an online sportsbook in Russia is out of the question.

Your only shot at reaching Russian players is by getting licensed in a different country and luring them with marketing strategies. However, authorities have been blocking foreign operators lately, so many of them gave up and chose to withdraw from the otherwise profitable market.

Ukraine – This country is definitely worth considering for a potential investment in the gaming market. Unfortunately, the local lottery lobby was strong enough to convince politicians to postpone passing new Ukrainian gambling laws. Regulations change frequently, creating an unstable market and experts believe that, under these circumstances, investing in a costly marketing campaign is too risky.

Kazakhstan – Another highly promising market in the CIS is Kazakhstan. The country has a wealthy population and locals are fond of gambling and eager to spend their money on casino games and betting. Sports wagering and horse races are especially popular, both online and offline.

The only downside is that you need strong connections and local partners to enter the market. This also applies to all southern CIS countries. Even with a great product, brand and financial background, it’s very difficult to get into Kazakhstan on your own. Once you’ve managed to penetrate the market, you should prepare yourself for some heavy competition from well established local brands.

Armenia, Georgia, Tajikistan and Azerbaijan – This category includes countries with a lower standard of living. But despite the slow development and poverty issues, betting shops are popular among locals. So popular, in fact, that these countries offer some of the most attractive markets for land-based sports betting services.

As for online casinos and sportsbooks, this industry is underdeveloped. It’s not all bad news though, because this means investors have more chances for further development.

However, keep in mind that Azerbaijan’s sports betting industry is effectively monopolized. In addition, the gambling market in Georgia is heavily regulated and every bookmaker has to pay a very expensive license fee, making it suited exclusively for big players. There is fierce competition on prices too, and companies often offer very low margins.

Belarus – Last but not least, let’s talk about Belarus. This country once had an attractive gambling market, but all the bureaucracy has made the simplest process take months to complete.

Another problem is the outsourced gambling monitoring system – Belatra – used by the government. The system simply can’t take the load requirements. It also has a lot of bugs that spoil acquisitions and makes any gambling operation very difficult, even if you happen to be using top-notch IT systems.

Whichever country you choose, keep in mind that the Eastern European market is very different from the Western one, which is more modern. Players are more demanding and each area has a distinct local culture; on one hand, this makes the market accessible, but on the other hand it can be more difficult to attract customers.

In conclusion, all of these countries offer opportunities for growth and promising profits, but they also come with high risks. In the end, the extra effort might just be worth it.