Russian betting companies continue to sponsor football clubs after invasion

On March 8 2022, 37 countries issued a joint statement calling for appropriate actions to be taken to “limit sponsorship and other financial support from entities with links to the Russian or Belarusian state”. UEFA, Everton, and German club Schalke 04 had all ended sponsorships with Russian companies before the call for action, but sporting sanctions on betting -  a key fuel of football’s economy - have proved slow.

Some action has been taken by the betting industry itself to isolate Putin’s regime. Big US operators Caesars, DraftKings, FanDuel, and PointsBet all stopped taking bets on games with Russia and Belarus, but looking to Russia itself,  the Russian betting market is worth billions of roubles and has extensive  involvement with sport and football in particular through international sponsorship deals.

The massively expanding Russian betting market
Online betting was banned in Russia until 2015, but since then licenced and unlicenced operators have grown swiftly. According to Credinform, by 2018 the 10 biggest operators with Russian licences had a combined income of 135 billion roubles (about U$D2 billion at 2018 rates).

Table 1: Top Russian betting companies 

 Source: CredinformGlobas

Other bookmakers from outside the country also began looking to Russia for expansion. In 2017, Bwin launched a Russian facing website, Bwin.ru, in partnership with local businessman Alexander Mamut, owner of Russia-licensed bookmaker Digital Betting. By 2020, there were 29 licensed betting operators with 11 taking bets online and the websites of the top five operators had more than 26 million visitors a month.

Table 2: Russian betting operators online

Source: The Gambling & Betting Regulatory System in Russia (2020, Deberti Jacchia)

Russian football sponsorship continues despite the war
This expansion has been driven by betting on sport and many Russian betting operators looked to engage customers online through sponsorship. Initially, this came through Russian leagues and clubs. Liga Stavok, for example, sponsors the Russian Premier League.

In the past few years, this focus has shifted and sponsorship from Russian betting operators or companies with Russian owners is evident across a swathe of football clubs and competitions outside the country.

Fonbet agreed a $2.5 million deal with Spanish giants Real Madrid in January 2021 that was due to run until the end of the 2022/2023 season, and other sponsorship agreements with AC Milan and Paris Saint Germain (PSG). On March 18 – three weeks after Russia’s invasion of Ukraine – all three clubs belatedly cut their ties with Fonbet.

PSG will retain its academy in Moscow,  and other sponsorships continue. Liga Stavok also sponsors French club AS Monaco, which is owned by Russian billionaire Dmitry Rybolovlev.

Elsewhere, controversial Russian betting company 1XBet sponsors Barcelona in a deal reportedly valued at $9 million a season. 1XBet also continues to sponsor the Italian top flight Serie A despite a 2019 Sunday Times investigation into breaches of gambling regulations that led to the UK Gambling Commission rescinding its licence in the UK.  Chelsea, Liverpool, and Tottenham Hotspur all subsequently ended sponsorships and 1XBet has looked to grow its operations outside of Europe.

The company has sponsored the Nigerian Football Federation since 2018. A year later, 1XBet tied up a deal with the Confederation of African Football to sponsor the Africa Cup of Nations (Afcon), the CAF Champions League, the CAF Confederation Cup, the CAF Super Cup, and the African Nations Championship.

“We are pleased with the way our cooperation with CAF is going and are happy to contribute further to the development of sports on the continent,” said 1XBet in a statement before this year’s Afcon in Cameroon, which was televised around the world and again full of sponsorship from the company.

1XBet has also sponsored football in Chile and in January 2022 agreed a deal to sponsor 13 Brazilian club competitions.

All the sports clubs and tournaments mentioned here were asked for this article if they would review their sponsorship with Russian betting in light of the Ukrainian invasion. At present, none has replied.

How Russian is Russian?
In a bitter irony, 1XBet is banned from operating legally in Russia for taking bets without a domestic licence but has been able to flourish around the world as an offshore betting company.

1xBet is owned by Russian businessmen Sergey Krechetov, Dmitry Kazorin and Sergey Karshkov, but has a licence from Curacao and is registered as a company in Cyprus, where its owners live. This type of offshore set-up is not uncommon among betting operators looking to avoid stricter regulation and also makes it difficult to identify betting operators with a particular country.

Betting licences usually come from the Dutch overseas territory of Curacao or the Philippines. Both regimes are typified by weak integrity, and licence holders are not required to report suspicious betting to sports or judicial authorities. These offshore betting companies usually have a head office or cash processing operations in another territory.

For Russian-owned bookmakers, Cyprus is a popular territory. The owners of 1XBet live in Cyprus. Marikit Holdings, the owner of Betwinner, another betting company popular in Russia, is also based in the Cypriot resort town of Limassol.

Data companies would need to join a boycott
Betting operators continue to withdraw from Russia, including global giant Bet365 and US operator Leo Vegas, while Bwin’s owner Entain withdrew all operations from Russia before the invasion and has “indefinitely suspended betting on all Russian-based sports and events.”

Any boycott of sports betting to really work would require deeper action. The data companies that send scouts to sports fixtures to collect live data, which is then sold onto betting companies around the world to fuel in-play betting, would also have to join in.

Polish data company Statscore quickly stopped selling data from Russian and Belorussian sports tournaments. On March 7, Genius Sports also decided to stop all commercial activities in both Russia and Belarus due to the war.

“At all times our priority remains ensuring the safety and well-being of our colleagues, families and loved ones in the region. Our thoughts are with the Ukrainian people,” said a statement from Genius, which is listed on the US stock exchange.

Despite making this statement, Genius did not immediately end the sale of sports data. On March 16, Genius added: “We are no longer planning to cover any Russian or Belarusian events with our products. This has already been put in place and will have ceased entirely within coming days.

“We have suspended our contracts with all Russian and Belarusian sports betting entities. Relevant services are being disabled this week.”

Genius also said it had stopped any cash flow, was disabling software, and had suspended contracts with all Russian and Belarusian sports betting entities.

Severing links with such a massive industry is expensive and difficult as the links run deep. For instance, Carsten Coerl, a founder and current chief executive officer of sports data company Sportradar, is the only board member of Casako, which has a 23 percent stake in Liga Stavok through local holding company PMBK (First International Bookmaker Company).

Sportradar said that Coerl’s holding was “well-known and public information” and he had “absolutely no day-to-day interaction or responsibilities” at Liga Stavok.

Asked if Sportradar would stop offering data to Russian betting companies, a company spokesperson said:

“Sportradar is evaluating and complying with all sanctions imposed by a broad array of government entities and sports leagues affecting Russia, Belarus and the Donetsk and Luhansk regions in Ukraine. These sanctions apply to our business in the different jurisdictions where we operate, including US, Switzerland, Australia, UK and EU. “

“Right now, we are urgently focused on actively assisting Sportradar employees in these regions and have created an emergency employee fund which will allow the company to provide impacted employees who are experiencing extreme and temporary hardship with financial aid.  In addition, we recently donated $1 million USD to global charities Red Cross and UNICEF to be used for dedicated projects in the impacted regions. This is a heart-wrenching situation, and our hearts go out to all those affected by the senseless violence. We are monitoring the situation in real time and staying in close touch with our employees, partners, and customers.”

Other major data companies, including BetConstruct and Stats Perform, were also asked by Play the Game if they would stop selling data to betting companies from Russia or with Russian owners. Neither replied.

What would a betting boycott achieve?
So, what impact would isolating Russian betting operators have? Credinform estimated that in 2018 the top 10 licenced betting operators paid 1.6 billion roubles in Russian tax (more than U$D200 million) and 6.7 billion towards the development of sport in the country. Liga Stavok alone was estimated to have invested 1.8 billion roubles in Russian sport in 2018.

Hitting Russian betting would damage the country’s economic interests and, like the wider bans, also impact on sport in the country.

Too many clubs, leagues and companies that make money from Russian betting interests however appear to be ignoring the war to protect their commercial interests. As the conflict in The Ukraine continues to rage, staying quiet and taking the money looks increasingly shameful.