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A Brief Analysis of Eastern Europe’s Online Gambling

A Brief Analysis of Eastern Europe’s Online Gambling

The rise of online casinos all over the world has changed the gambling industry forever. More and more legislations are adopted by different post-socialist countries and international brands such as Bet365 or 888 have to tackle difficulties in the ex Eastern Bloc.

A Brief Analysis of Eastern Europe's Online Gambling

This is mainly because countries like Ukraine, Romania, Bulgaria or Albania have huge marketplaces and governments are facing regulations regarding online gambling for the first time ever.

In the fall of 2015, we published an op-ed on CalvinAyre.com , and now we’ve decided to bring you an updated version of that article – with facts from 2016.

Gambling in Europe: West vs East

Western countries have been much quicker in the process of legalizing gambling on the Internet, although their governments needed some time to come up with a solid legislation. The Old Lady Europe gave some of the most prominent names in the industry of slots companies, with Microgaming, Play’N’Go, or NetEnt making headlines almost everyday, but it was not fast to regulate online casinos.

The UK is the most notable example of a European country that implemented a solid gambling legislation and helped this industry thrive. After all, why not? It’s great for the economy. The Hippodrome Casino from London, the Grosvenor chain of casinos, Caesars, they all attract thousands of players and tourists.

Small regions such as Isle of Man, Gibraltar, or Malta have implemented gambling commissions. Cyprus boasts a number of great land-based casinos. France has the southern region and Monaco, where avid gamblers and high rollers go to wager millions. Almost all western countries that have not been impacted by the Russia’s sphere of influence now thrive in this industry.

Eastern Europe: A Fast Emerging Gambling Industry

The situation is way different in Eastern Europe, where countries have young democracies. Although Romania doesn’t have the next Hippodrome Casino and Ukraine does not boast a small Las Vegas, such countries come with benefits, such as avid gamblers who usually have a penchant for high-risk games and search for quick wins.

Both land-based and Internet operators are very attracted to this fast emerging industry from Eastern Europe. Yes, the population is still affected by the economic crisis, as all governments are, but this region from the old communist area presents huge potential, as many established gambling companies seek to expand their operations to the East. There’s a downside as well. Even though consumerism is massive, there is simply not as much money as in Western Europe. Just have a look at this chart.

We may think of Europe as a “single state”, given the onset of the European Union and the emergence of the Euro (€) currency at the beginning of this century, but when speaking of financial significance, individual nationals are in charge of creating and applying their own laws. The EU only draws a few guidelines and says: “This is how we should govern our countries”. Of course this is true within the (online) gambling industry, as there’s simply no legislation or regulation regarding betting and gambling all through the continent.

Online gambling boasts incredible opportunities in the prominent parts from the Eastern countries, with countries such as the Czech Republic, Slovakia, Romania, and Slovenia embracing an Internet gambling ‘revolution’ by allowing private operators and companies to request and hold gambling licenses.

For instance, the highly appealing Romanian industry has become a target for the international online gambling companies, even though the country has started requesting a 20% back tax. In 2015, in just three months, 13 companies have requested and received provisional licenses. The number has grown since then and the Romanian online casinos market has surpassed the Bulgarian one and keeps doing so.

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The latest updated from a few weeks ago shows that operators have paid $269 million in Romania, swelling the government’s coffers.

Nations That Enjoy Gambling

We actually believe that this will certainly lead to some sort of flooding with countless opportunities of gambling and promotions and advertisments on every fence. This is valid for any country in Eastern Europe that will start to implement a new legislation for i-gambling. If we were to approach this idea with a comparison, the Western iGaming market would be an adult, while the Eastern online gambling market would be a child. There’s still much to evolve, and the population doesn’t yet have favorite companies. In addition to this, countries are moving slowly. For example, the online gambling legislation was adopted in Romania in 2010 and it took five more years for the operators to receive a license. The legal environment is just poor.

Ukraine held a conference called ‘Game On – Bringing Gambling Back to the Ukraine’ back in October, 2015, hoping that despite the huge political turmoil in the country, the healthy gambling industry that thrived prior to 2009 would come back eventually. You’ve heard that! Ukraine was home to a really healthy gaming industry.

Maybe because of this the Ukraine government is taking into account some huge changes to help tourism flourish in the area and generate additional tax revenue. After all, a proper regulation is much needed since the population is craving for a healthy gambling environment. However, we’re talking about an industry that is very poor regulated and which presents a hotchpotch of prerequisites. A holistic approach might be needed.

There’s a powerful propensity to gamble among most of the citizens in the ex Eastern Bloc. Although people in these countries culturally love gambling, it has been obviously denied through laws that kept changing and actually encouraged oligopoly or monopoly. Bad policies drive away gambling operators and it was the same here. Despite bad environments, many countries from the ex Eastern Bloc started allowing online gambling from 2010 (except from Montenegro – given the 2004 legislation) and things quite started to move faster. For instance, the Czech Republic is set to introduce an Online Wagering bill in 2016.

Eastern Europe is Good for Business

Why should eastablished operators and companies penetrate such markets? A brief description of gamblers in developing countries says it all: medium to low income plus an avidity for extremely high returns, meaning that they are willing to play a large percentage of their income and have a penchant for high risk/high reward games and slots. These people prefer games where luck predominates, unlike people from Western or Northern countries for instance, who would rather play games such as poker or blackjack and bet for fun.

Ultimately, getting into the EU has massively benefited living standards and economies of most countries from Eastern Europe and international companies should not afford to ignore such immense opportunities that are present in this region.

Therefore, keeping up with gambling legislation, particularly the online matters, throughout Europe is quite a significant challenge. Our opinion? Eastern Europe will soon be a new playground for huge gambling companies. iGaming can go further because of the consumerism in this region, as avid gamblers are ready to take on new products and services. The question is: who is smart enough and has the patience to tackle difficult legislations?

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