The tectonic plates are shifting between Western and Eastern European gambling as noted by Temur Mikeladze, Chairman and Co-Founder of Crocobet.
Sharp contrasts appear, as market maturity and regulatory tightening begin to set across multiple Eastern jurisdictions.
An expert in scaling EE and former CIS markets, Mikeladze tells SBC that igaming’s future winners recognise the unique “cultural, regulatory, and economic differences between these regions”, and present “both challenges and opportunities that are vital for industry leaders to comprehend.”
The contrasting yet complementary forces between East and West will be the main focus of Mikeladze’s conference appearance at the upcoming SBC Summit in Lisbon. As part of the ‘Eurasia Leaders’ panel, the Crocobet chairman will shed light on the intricate transcontinental realities shaping the gambling sector.
Market maturity head eastwards
“The relationship between Western and Eastern European gambling markets is characterized by distinct regulatory frameworks, market maturity levels, and consumer behaviours,” Mikeladze explained.
“Western Europe tends to have well-established, highly regulated markets with a strong emphasis on player protection and responsible gambling. In contrast, Eastern Europe is still developing its regulatory frameworks, with varying degrees of market maturity and regulatory enforcement.”
This disparity creates a complex interplay where Western operators often bring their expertise and best practices to the East, leveraging their experience to navigate these emerging markets. In return, Eastern markets offer immense growth potential and opportunities for innovation, making them attractive to Western companies looking to expand their reach.
Regulatory tightening follows pandemic
The COVID-19 pandemic has accelerated regulatory changes across Eastern Europe, with many governments tightening their gambling regimes. “The move towards stricter regulation in Eastern European markets is driven by several factors,” noted Mikeladze. “Firstly, governments are increasingly aware of the potential social and economic impacts of gambling, leading to a push for stronger consumer protection measures, such as advertising restrictions and age limitations.
“Secondly, there’s a growing need to combat illegal and unregulated gambling activities, which can harm both players and the integrity of the market.
“Additionally, tighter regulations help in establishing a more transparent and reliable market, attracting legitimate operators and fostering a safer gambling environment for consumers,” he added.
M&A requires nuanced approach
With growth stagnating in Western markets, gambling companies are turning their attention to Eastern Europe. Mergers and acquisitions (M&A) have become a key strategy for Western companies seeking new growth avenues. Mikeladze highlighted the benefits of these activities: “M&A developments can be highly beneficial to local players and governments, bringing in capital, expertise, foreign direct investment (FDI), and advanced technologies.”
However, successful M&A requires a nuanced approach that considers local cultures and market conditions. “It is essential that these mergers and acquisitions are conducted with sensitivity to local cultures and market conditions. When done correctly, M&A can enhance market stability, improve product offerings, and create a more competitive environment, ultimately benefiting consumers through better services and increased choices,” he emphasized.
Mikeladze also stressed the importance of cultural adaptation: “Key takeaway for those who prefer growth through M&A is to adjust corporate culture based on the geographic location of the acquisition. This is essential because customers, employees, and regulators in different regions have distinct expectations and norms.”
Effective strategies for Eastern growth
For sustainable growth in Eastern markets, it is essential to develop strategies that cater to the socio-complexities of individual consumers. “Developing an effective strategy for sustainable growth in Eastern markets requires a deep understanding of the local culture and customer betting behavior,” Mikeladze advised.
“This includes investing in market research to tailor products and marketing strategies to local preferences. Localization is key—not just in language, but in understanding local patterns and spending habits.”
Building strong relationships with local stakeholders and regulators is also critical.
“Leveraging technology to enhance online engagement and provide personalized experiences can drive growth. Additionally, promoting responsible gambling and demonstrating a commitment to social responsibility and sports sponsorship will build trust and long-term loyalty among consumers,” he added.
Everything to play for….
Looking ahead, Mikeladze anticipates significant developments in Eastern markets: “By the end of the decade, I expect Eastern markets to become more regulated and sophisticated, aligning more closely with Western standards. This evolution will likely attract more international operators, increasing competition and innovation in the region.”
The impact on global gambling will be substantial. “Eastern Europe could become a major growth engine for the industry, offering new revenue streams and opportunities for expansion into West Asian markets, creating a comprehensive Eurasian market.”
Mikeladze predicted: “The region’s unique blend of cultures and emerging market dynamics will also contribute to the diversification and enrichment of the global gambling landscape.”
Source: SBC News