EEGReport Magazine: The Bulgarian Gambling Law has been recently updated and the new addition and changes have been added to create a better climate for international operators to apply for licenses. Among these changes we have found that the technical standards have now been made much easier to comply. Could you give us an overview regarding these changes in the legal perspective, based on your expertize?
Miglena Dimitrova: First of all, I would like to wish Happy and prosperous New Year to the readers of your magazine.
I could define the last changes in the Bulgarian gambling law in three main areas: taxation, technical standards and competitive mechanisms. From January 2014 we introduced taxing GGR instead of taxation based on the turnover. Months after that change some of the biggest online operators were licensed, and in compliance with the law they were eligible to start their activities before their technical compliance in the fixed transitional period. In that period the Bulgarian regulator had to adopt secondary legislation related to data collection and data transfer. By good fortune the regulator embraced very good approach to discuss all technical matters with the licensed operators in order to establish best European practices in Bulgaria. Unfortunately during that time the Regulator was not maintaining its own server and all the data had to be transferred to National Revenue Agency. Two years after that the Regulator carried out public private procedure to build up its own server and lines, and from the beginning of 2016 the operators are starting sending data directly to the regulator.
From my personal experience I can admit that I have never imagined that these technical matters could be so crucial for gambling businesses. According to Bulgarian gambling law the online operators are obliged to locate a control server in Bulgaria. That local control server has to be connected with the operator’s central computer system, and when the data containing geographically based Bulgarian IPs is received in the central computer system, the operator has to send that data to the local control server. The secondary law provides obligation that data has to be send to National Revenue Agency (NRA) and State Gambling Commission (SGC) in defined HTML format. Could you imagine what difficult task is that for IT teams? The data in the local control server is “dead” but needs to be revived and to be forwarded in the fixed format to the authorities (NRA/SGC).
There is no doubt that in our days the gambling operators attract the best IT specialists. They are really equipped with high educated and talented young people, and fortunately the solution was found. One of the biggest European company specialized in the secure software built the so called SAFE platform, which is used by international operators as local server.
EEGReport Magazine: As we know, there are different regulatory models in every jurisdiction, which makes operators look twice before entering legalized markets. Is this the case of Bulgaria? There hasn’t been a huge interest shown by the large international operators when the first amendments came into force, do you feel that these new changes are going to pave the wave for a much successful market in terms of tax revenues?
Miglena Dimitrova: Where the gambling is permitted the first question considered by the operators is about taxation. They calculate the potential market risks and decide whether to apply for a license or not. This is really very basic, and from my experience when talking with colleagues from Malta, Romania, UK, Spain and other countries I can admit that all we share the view that the operators need more information related to technical matters, competitive mechanisms like bonuses, fees and programs for responsible gambling, sponsorships and so on. Let me give you one simple example: Every operator would prefer to invest in Spain instead on Bulgaria. No need to explain why. But once the operator is there, it has to be visible on the market. That visibility is a very expensive task. Could you imagine what the cost is to sponsor football teams like Real Madrid? Add to this cost bonuses, creative, lawyers, accouters, ITs and you will get not so attractive net result. To compare with the others the Bulgarian market is small but the expenses are not so high, and as a result potential benefit could be bigger that from so called “attractive markets”.
For all the above I find the role of the specialized editions like your magazine as a very positive for the market. The international operators could get here much valuable information than from international audit companies and law offices.
EEGReport Magazine: Do you think that a common regulatory model that can be adopted on EU level would be a good practice? Economically speaking EU countries differ a lot, thus having an all governing law in every country regarding the online gambling sector could prove to be a major setback for many less developed countries in Eastern Europe. This is of course my opinion, what is your expert opinion on such a topic?
Miglena Dimitrova: From the Green book on gambling published by the EU Commission in order to make public the main consideration in regard to the gambling business around Europe, we understand that the EU authorities observe the gambling as a specific activity when the particular subcultural differences need to be considered. Some countries are conservative based on their traditions and ethical understanding. While contemplating this problem from only commercial point of view we won’t be able to see the whole picture. It is also important to take into consideration the fact that online gambling activities attract much more the young generation which is phenomenon for the first time in human history when talking about communication ability. These people spend a large portion of their time in the global net. I really don’t know who is inventing new games – the operators or the players. We will see how popular will became the games of skills and fantasy games in the next years. Regardless subcultural differences these young people are playing together despite their different geographical locations. Therefore I think that the online gambling sector is a very intelligent and dynamic, and the EU authorities would rather prefer to adopt the already established practices than to create something useless.
EEGReport Magazine: Online gambling has always brought along online payment processors. What is the current situation in Bulgaria regarding such activity? Is there a second tier license for such services?
Miglena Dimitrova: Many thanks for this question. During the passing year I have observed how the domestic online operators have being positioned increasingly better on the Bulgarian market. That surprised me especially when considering available public forums, where games and products are discussed. While the players were complaining from the boring products offered by the domestic operators, same operators started to receive more and more bets. And the explanation is very simple. Most popular payment method in Bulgaria is not used by international operators. For the Bulgarian players is much easier to create an account related to already existing one than making a wallet or choose not popular in Bulgaria payment method.
According to Bulgarian gambling law special license for payment services is not required. However, the operators need to open a special bank account in the approved bank within European Economic Area including Swiss Confederation, and to proceed from that account all the payments related to Bulgarian players.
EEGReport Magazine: Looking further afield, in your expert opinion, where are the major emerging opportunities in Eastern Europe for operators at this moment?
Miglena Dimitrova: In my opinion the major opportunities are related to the products. I think that players will become closely connected through the games. The fantasy games will give them more opportunity to reveal their skills, to chat in the tipster rooms, to create teams and discuss the results. The same is for poker. I am not a visionar but it is logical to expect that these people would want to have personnel contacts also, and to go somewhere when they could find people with similar interests. Therefore I think that in the near future the online operators trying to satisfy that need, will start looking for offline activities also.
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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