How is the iGaming Industry Reacting to Events in Ukraine & Their Business Interests in Russia

Russian citizens have been thrown into turmoil as a result of Putin’s actions over the past few weeks. Numerous companies are blocking Russian users, suspending their services in the country or exiting the territory altogether. This is having a huge effect on all sectors of the Russian economy, but one that is seldom mentioned is the iGaming industry, Gambling accounts for over half a billion dollars in revenue worldwide every year. Unsurprisingly for a nation that closely monitors what information is allowed to be publicised, there aren’t any publicly available figures on gambling spending in Russia. Despite this, we are still able to witness some of the impacts that the war is having on the iGaming industry through third party announcements.

International Brands Withdrawing From Russia

First of all, there is the impact of international brands pulling out of the industry in Russia. Most betting websites that operate in Russia are owned by Russian companies; having said that, one of the biggest betting companies in the Russian market is Bet365.

On 2nd March Bet365 announced that they would cease all operations in Russia as a result of Russia’s actions against Ukraine. Bet365 gave Russian customers two weeks to withdraw their funds but withdrew the ability to register for an account and/or make a deposit almost straight away. Operations wound down entirely on 15th March.

Parimatch, is another hugely successful iGaming website in Russia that is owned by an international company. The gambling giant recently released a statement announcing their exit from Russia as well as pledging to donate $1000 to help Ukraine fight.

The Decline of iGaming Options in Russia

International companies leaving the Russian gambling industry aren’t the only reason for the probable decline in iGaming across the country.

Over the past few weeks, PayPal, MasterCard and Visa all announced that they would no longer operate in the country as a result of Putin’s actions. This is huge news for everyone, not just those who want to continue iGaming. In 2021, 78% of financial transactions recorded were made with a Visa or MasterCard. On top of this, PayPal is hugely popular in the country and the gap in the market will be felt.

The withdrawal of such well-established financial institutions will no doubt have a huge effect on how many people are able to take part in iGaming. With 78% of transactions using either MasterCard or Visa a lot of people will be unable to make a deposit. Some less well-known casinos, particularly crypt-casinos might still facilitate Russian users, but most larger brands have left the country.

The Finance Industry in General

Finally, we have the result of sanctions. Several Russian banks have been banned, meaning they will no longer have access to the UK market or be able to trade in the pound sterling. While this mainly targets more wealthy Russians that have a lot of money overseas or send money between Russia and the UK, it also means that Russians won’t be able to gamble with any companies that are based in the UK, because the gambling company wouldn’t be able to send money back from Russia to the main company accounts.

On top of this ban that stops most major Russian banks from using sterling currency, SWIFT’s exit from the country means that no users will be able to gamble with international companies, regardless of where they’re based. SWIFT allows easy transfer of money between nations, which means they are no longer able to trade money between countries through the banking system. This will be hugely detrimental because so many companies hold their money and have their headquarters in other countries – if they can’t send money between Russia and their headquarters then they will have no choice but to suspend their service there.

What Effect Does This Have?

When you consider the removal of iGaming services, you probably think about how people won’t be able to enjoy gaming online in the same way and will miss out on things like placing bets on international sporting events. However, it is also worth considering that in order to allow an iGaming website to run smoothly there are plenty of people employed in the background to make this happen. So, although Russian developers and studios may well continue contributing to some of the best online casinos available, there is a thought that this might well change in the future too! This could have an effect on those that enjoy iGaming outside of Russia too – because it could slow down the development of new games and new technology. Of course, that is pretty small compared to what is happening throughout that part of the world but certainly, something to keep in mind when you consider who is going to be affected by different sanctions and bands various brands are putting place throughout the country.

Other Brands Pulling out of Russia

Of course, it isn’t just the iGaming industry that has been affected by international brands removing their goods and services from Russia. McDonald’s hit the headlines earlier this month when they announced that they would be closing doors on all of their Russian restaurants; which most believe is likely to pave the way for other brands that operate in the country to follow their lead and do the same. When you consider that spending money is going to be tricky for citizens of Russia it could be a sensible business decision for brands within Russia, as well as something that is considered the right thing to do by many.

Ultimately, the combination of sanctions and international companies that are exiting the Russian economy will have a huge effect on the iGaming industry in Russia. The Russian Ruble is almost worthless so Russian punters will be concerned about looking after their money, meaning they’re less likely to gamble. On top of this, it’s now so difficult to find a way around the list of sanctions that most people won’t bother. The iGaming industry is going to suffer and will most likely take a long time to recover.