13.03.2018

How to launch betting shop in Russia: step by step guide

How to launch betting shop in Russia: step by step guide

There were only 14 legal onshore betting shops in Russia at the end of 2017. This means that the market (if we do not take into account the illegal part of the industry) is quite uncompetitive. On the eve of the World Cup, experts expect more players to come. But it is not easy to join the Russian betting market, because of the high barrier of entry.

Barriers to small companies

One of the requirements for obtaining a license is the amount of authorized capital not less than 100 million rubles, and the value of net assets during the whole period of the company's operation not less than 1 billion rubles, and also a bank guarantee in the amount of at least 500 million rubles. This is unattainable for medium and small business. However, they still have another opportunity, we will discuss it below: the franchise of large existing companies.

The remaining requirements concern documents for this business. Therefore, the main issue to be solved is financial.

Step 1. Limited liability company

You should start with LLC registration. You cannot work as self-employed entrepreneur since 2012. Next, find a room meeting the requirements of the legislation, and draw up a lease.

Step 2. Licensing

License allows you to build a business on your own terms and promote a unique brand. But if your authorized capital is limited, the franchise will be a good start. Let’s take a look at both options.

License

The license for gambling is issued by the Federal Tax Service.

Just before submitting an application, you need to declare your betting shop. Then check the equipment (cash desks and other devices) for compliance.

After that, get all the documents you need. Make sure that all documents are original and valid.

It takes the Federal Tax Service 45 days on average to consider the documents.

Franchise

This option is actively used on the Russian market. To enter into an agreement with a licensing company, you will need to provide a certificate of the LLC registration, a lease agreement, a Property Inventory and Registration Authority plan, confirmation from the owner of the premises and his guarantee that the location of the betting shop meets the requirements of the law. Most companies require the data of your future employees as well; some licensees also require a copy of the contract with the PPC.

Major bookmakers prefer to conclude partnership agreements with those who can create not just one betting shop, but a chain of offices or terminals. Therefore, it is better having several options in advance.

Step 3. Calculate profitability

Betting shop can be unprofitable. Profits here directly depend on the ability to predict sports events. If you do it better than players do, use sports knowledge and analytics, you are in the black. As a result, the margin (game) profit of most betting shops reaches 10 – 15%, meaning the profitability of the business at the level of 60 – 80%.

The tax burden on the bookmaker business will increase twofold in 2018, somewhat reducing the potential profit. However, there is good news: the bookmaker market in Russia has been developing for a long time, and has its own strategies for increasing profits. Using them, you can increase the average player's check by 50% and increase profits twice or more. Roman But, the founder and head of Quintessence, former top manager at the Pari-Match BC, will conduct a review of effective strategies at Betting Trend Forum.

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