EEGReport Magazine: The Latvian online gambling sector is quite mature market, what are the recent developments in the market? Are foreign operators allowed to apply for a license?
Latvian gambling market is regulated from 1994. Hoverer modern gambling market (as we know it today) is from 01.01.2006, when Gambling and Lotteries Law came into force. Since this law was adopted, there haven’t been significant changes in law. Online gambling became very popular in 2012 in Latvia and gambling operators were interested in obtaining the license. Pervious was only one operator who operates online and there was offered only one game type – sports betting. But situation changed in 2013 when three more operators obtained online gambling license and started to offer full range of gambling online (slots, card games, roulette, betting). Two more online licenses were issued on 2014. And reacting on growth of online market there was necessity to update gambling regulation. Changes in Law on Lotteries and Gambling tax and fee were adopted in the end of 2015. From 2016 operators can obtain license to operate only online. Because previous regulation provided, that license to operate interactive gambling can be issued to the companies, which have received land base Gambling operating license.
Main requirements for operator to obtain Gambling operating license (land base and online):
Capital company registered in the Republic of Latvia;
Paid stock capital is not less than 1.4 million EUR;
Interest of foreign members or stockholders in the capital company stock capital shall not exceed 49 percent (these requirements doesn’t concern on EU, EEA and from January 1st 2016 also OECD member states.)
EEGReport Magazine: What is the key sectors in the Latvian gambling market based on niches? Sports betting, casino, poker?
Most popular games in Latvia are Slots and they take most part of the market – 77, 16%(on net revenues). Slots can be operated in slot machine hall (with minimum 20 machines) or casino. At present we have 334 slot machine halls and 5 casinos in Latvia. In 2015 online gambling took only 4, 55 % from all gambling market, but increase from the 2014 is more than 210%. And looking on activities in online gambling market we expect that this growth will continue also in 2016.
Gambling and lotteries net revenues (2015 9 months)
EEGReport Magazine: Who are the key operators at the moment and how is the taxing done in percentages?
There are 13 licensed Gambling operators and one Lottery operator (state monopoly) in Latvia. But top four companies create 79 percent of all industry net revenue. These companies are SIA “ALFOR” – largest slot machine operator (almost 30 % of all slot machines in market), SIA “Olympic Casino Latvia”, SIA “Joker LTD” and SIA “Admirāļu klubs”. SIA “ALFOR”, SIA “Olympic Casino Latvia” and SIA “Joker LTD” have also received online gambling operating license.
Land base gambling taxation:
Gambling tax is collected from each equipped or installed gambling venue for each calendar year in accordance with the following rates:
- roulette, card and dice games – 18000 euro per each table;
- Slot machines – 3204 euro per each game place.
Tax from Betting (land base) – 15% of GGR.
Tax from Bingo – 10% of GGR.
Online gaming tax regardless of the type of game is 10% of GGR.
EEGReport Magazine: What advice would you give to potential new entrants considering Latvia (operators, affiliates, suppliers etc.)?
Since 2006 there haven’t been significant changes in legislation and technical standards regarding gambling and also not planned in nearest future in Latvia. In a result of good cooperation of Lotteries and gambling supervisory Inspection and certification bodies technical requirements are well known. We have very good infrastructure to develop online gaming business – we have one of the fastest internet speeds in the world and rather low labor costs. Welcome to Latvia!
EEGReport Magazine: Looking further afield, where are the major emerging opportunities in Eastern Europe for operators at this moment?
Despite the fact that Latvian gambling market organization is more based on Western European system principles, biggest draw is new opening markets – for example huge Ukraine market, but this is associated also with bigger risk, because there are always unanswered questions regarding legislation and technical regulations. I think the major emerging opportunities (not only in Eastern Europe) are in online and mobile gambling, which is growing in enormous pace.
Tom Light -SBTech Interview- (EEGReport – Magazine – Issue2 – February – May 2016)
EEGReport Magazine: Eastern European markets are growing at an incredible rate and I don’t think that anyone can argue about the fact the sports betting is the biggest niche when it comes to online gambling in Eastern Europe. Do you feel that this is accurate?
Tom Light: In most cases yes, we see that in countries such as Bulgaria, Czech, Hungary, Lithuania & Poland, sports betting is accountable for 75%-90% of the Gaming GGR, which includes Sports, Casino, Poker & Bingo. For markets like Latvia, Romania & Slovakia Sports is still a major sector within the gaming industry being accountable for 30%-50% of the GGR.
In play in particular has been a growth denominator in the past years for online sports-betting, allowing the punter roll-over his funds several time during one match.
Beyond the turnover it is important to mention that the margin is much high when it comes to sports betting, as well as the image of sportsbetting, which says that if you are good and knowledgeable you can make money.
We should even see a bigger increase during the Euros coming this June, as many non-punters would start betting on their favorite reprehensive teams.
EEGReport Magazine: Can you maybe give examples of countries where this isn’t happening and casino or other gambling products might surpass the sport betting audience? You can even mention markets that aren’t yet legalized in terms of licensing.
Tom Light: Romania is an example for a country that up to last year had 10% more turnover on casinos then on sportsbetting, I think this is related to regulations and since the new regulations came in to place I’m sure that during 2016 sportsbetting GGR will surpass casino.
To put in perspective, globally, the sportsbetting GGR is bigger than the all the other gaming sectors…Combined!
EEGReport Magazine: There has been a lot of innovation when it comes to sports betting products, and with one of the major European soccer event coming up this June, are you guys busy in the lab trying to bring new technology that will make online sports betting easier or even more attractive?
Tom Light: These days we are simply talking about personalization, which in core is the knowledge the operator has for each of his punters, the more knowledge the more personalized. Data can be gathered via the most common logs of all betting activities, behavior on the website, but even polls and ‘Mark as favorite’ buttons. Mapping this business intelligence is not a simple task, but the operators who are able to do so will have amazing insights on their clients.
Once data is collected and offer must be created via various algorithm and rules, based on many variables such as favorite teams/leagues, past winnings, past losings, trigger-happy cashout, etc… in order to create various offers for example:
“Manchester United did the job for you last time, can they do it again?” (While adding a betting button).
These offers are much more effective and are much more converting then just showing a generic offer to all customers or even to customer segments.
Another way to create offers, is using cross-player data, same as amazon does, with:
“Customer who bought these products, also liked XYZ …”. The likes of Bettorlogic offers this type of service which is taking the betting behavior of punters who made similar bets and are informing the customer which bets he might like. Since this is a more social way of bet recommendation, this might be more appealing to the punter which might not driven from the ‘house’ recommendations, as much as the activities of other partners.
The last part is to serve this offer in a proper matter, which can be targeted ads, SMS marketing, push notifications, widgets / pop-up on the site, or even gentle highlights of bet markets across the page.
EEGReport Magazine: Most of the Eastern European countries have qualified for the EURO 2016, this means that you don’t have to a betting fanatic to bet on your country during such events. Everyone will do it for at list the period on which the tournament is being played. What does this mean for online sports betting operators and especially software providers?
Tom Light: Back in the day, it was very clear, if you are an Italian operator, and there is a game ‘Italy VS Portugal’, you are as much gambling as all the punters on your sportsbook – the risk was one sided, and the results were sometimes amazing but other times destructive.
In today’s world, this scenario cannot happen, the punters are betting 85% of the times on in-play live betting where the bet markets are very liquid, such as fast markets – what will happen in the next one minute, corners, 1×2 rest of the match, etc… all these markets spread the risk around various bet selection making the operator the desired margin instead of a roller coaster.
EEGReport Magazine: Looking further into the future. What are in your opinion the top markets that are going to open up for online gambling in Eastern/Central Europe?
Tom Light: I would look at Netherlands, Czech Republic, Portugal, and the evolving of the Romanian market.
Netherlands being a market proven in the .com market with high PV.
Czech Republic which is the Eastern European diamond, which is now dominated by TipSport, iFortuna, Sazka, Synot and StarTyp will open up Jan 2017 for additional licenses by international companies.
Portugal, with mass-market attraction for sportsbetting, various .com case studies such as BWIN and Betsson(Dhoze).
And of course the Romanian market which is proving to be very fruitful by the day.
Tom John Light Biography – (EEGReport – Magazine – Issue2 – February – May 2016)
Tom John Light was born and presently resides in Tel Aviv, Israel. Tom has lived and traveled worldwide and is highly knowledgeable and experienced working in various global regions.
Tom has been working in the gaming industry for many years with a focus on casino operations and sports betting. Currently Tom acts as Vice President of Business Development at SBTech. He is renowned for his role as Vice President of Business Development at FashionTV. Additionally Tom has successfully served as CEO for several online gaming companies such as 7Red Casino and 1King Casino.
Tom is recognized for his high involvement with the creation of the Online How-To Guide ‘eHow’ and has been featured/published in various interviews and articles.
Gal Ackerman Crowdtrading – (EEGReport – Magazine – Issue2 – February – May 2016)
EEGReport Magazine: In the last couple of years we have seen a growth in the launch of financial programs, but none of them seems to attract so many new traders as Trade360. The innovation which came with CrowdTrading seems to have swept the enthusiastic traders off their feet and they now choose your platform for their trading activities. What is the real innovation behind this phenomenon?
Gal Ackerman: In a nutshell, CrowdTrading is about taking the big data that banks and brokers rely on and putting it in the hands of the people. Revealing how new market trends develop in real-time is really the perfect way for new Traders to get a feel for the rhythm of the markets, and as their knowledge grows, their profits should too!
EEGReport Magazine: When it comes to financial trading programs and platform, a huge concern always is raised and it’s a concern the EU is trying to battle daily. It is concerns regarding Money Laundering. How is Trade360 with such problems, has there been any incident, is it tracked and reported?
Gal Ackerman: We have a talented and experienced team dedicated to AML. So far, we’ve managed to identify and prevent the handful of attempts that have been made to cheat the system. We’ve reported each incident to the appropriate authorities and we’re confident that we’ll continue to stay well ahead of the curve and maintain our all-important integrity.
EEGReport Magazine: Since Trade360 is a rather new financial service form, it falls within the newer and stricter operating guidelines issued by CySEC. How are client deposits protected and standards executed in this enhanced regulation?
Gal Ackerman: Our legal team in Cyprus is in constant contact with CySEc to ensure full regulatory compliance. Our clients’ funds are held securely in segregated accounts at top-tier EU banks and our customer support team is always working to ensure the highest standards of service across the board.
EEGReport Magazine: How are the affiliates taking advantage in promoting this innovative way of trading? There certainly has to be a high demand for marketing materials and payouts. We’ve seen that there is a top $650 CPA for affiliates.
Gal Ackerman: The growth in our Affiliates Programme has been exponential, and we’re all very proud to be part of it. We know that to attract the finest Affiliate talent, we need to pay the best CPA, and I’m so pleased that there have been so many substantial payouts in such a short time. Our USPs are proving to be super-appealing to clients, feedback from Affiliates is universally positive, and it’s very gratifying that collateral take-up is so high.
EEGReport Magazine: As we know, you have always been in the Financial industry. In your expert opinion, can there still be room for innovation in these trading platforms? We have witnessed so many these couple of years, that gave access for individuals that did not know anything about trading to start and venture into this great niche.
Gal Ackerman: I think there will be major convergence between people’s social, leisure and economic networks over the next few years, with advances in augmented reality enabling us to multi-task far more effectively. And with the growth of decentralized, crowd-based and peer-to-peer financial services, I think we’re going to see some very interesting developments in terms of synergy, gamification and crowd investing. Watch this space!
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