Timur Kasumov: "The cost of the entry of a new brand into the market is 100 thousand NZD"
The entry of a brand into the gambling market is always a risk. About how best to minimize it, evaluate the company's opportunities and its ambitions, make clear business and marketing plans, tells us the founder and the head of the consulting company Vetas Gaming Timur Kasumov.
India is a great market for a startup, and the CIS - no.
Timur, tell us about yourself: How many years have you been in the industry and how did the Vein company originate?
- I've been working in the industry for nine years. It all started in Georgia, where I come from, with the Dollarpebet brand, which was then completely new on the local market. At that time we only had three people on the marketing team. There I dealt with the issue of digital promotion, and in the three years of the company's existence we became the second in the country. After that the bookmaker was sold for an absolutely colossal amount of money to Betsson. This is how the international stage of my career began.
So Betsson was a starting point?
- No, exactly. After the purchase, I went to two other Georgian companies - Lider-Bet and Crystalbet, in which I realized that the local market, due to its specificity, closure and monopoly, was not interested. Here, due to regulations and requirements, it is almost impossible for new brands to enter this sector. Everyone here works only to retain what they have, not to attract new players. All marketing is based on who will distribute more money or give more cars as a prize.
Therefore, I wanted something new, to move on. Entering the international level, I realized what the gambling world is and what is happening here. We begin work in this direction, the study of new markets. I have visited Malta, Cyprus. Then came the idea of creating Vetas Gaming, a company that cooperates with several brands that can be brought to different countries.
Vetas Gaming is not our only name, that's what it's called in Belarus. At other points the name is different. It all depends on which market the company enters and which team will work with this project. It should consist of native speakers from the countries we work with. This is necessary to negotiate with affiliates, players, etc. Our goal is not to create an international brand, but to make something of our own and native for the user, so that he feels that it is his company. That belongs to their culture and language.
How extensive is the geography of your presence?
- For us we have selected several main markets, where we feel confident, we have a large network of partners and opportunities. We are talking about the CIS countries: Kazakhstan, Uzbekistan, Ukraine. It is also Ghana, Nigeria, Kenya, Uganda, Brazil, Balkans, where we have offices and a great team. In parallel, we observed other areas, such as the Spanish-speaking countries of New Zealand. It is a huge market with the same opportunities in its scope. However, it requires special investments, the establishment of connections and the development of a marketing strategy. As for the main one we have, it is India.
Did many companies from the CIS countries express a desire to work there?
— Much. Just today, before our conversation, I had conversations with a company from the CIS. For various reasons, I will not name who it has been. India is interesting both for big players, including Russians, and for very young ones, with one of whom we are now starting to work.
Of the big brands that are already there are Parimatch, Melbet, 1xBet, 4raBet, etc. They appeared there a long time ago. And now there are about 20 of them, which can rightly be called large.
At the moment, perhaps because we are increasingly revolving around India, there are not so many requests, especially in recent weeks, months, in any other market. This market occupies almost 50% of the total number of our customers.
Why is it so interesting?
- India is an incredibly cool and large market, where we arrived two years ago. We started working with one of the B2B projects that they brought there, and seeing the industry from the inside, we realized that it was a completely different world, with sports and games unusual for us.
It is completely different from the usual games that we are used to and sports. If in Dollarpa, for example, everything is based on football, then in India cricket reigns and a little kabaddi. If we talk about casinos, it's not the usual roulette wheels or blackjack, but, say, Teen Patti, Andar Bahar.
In addition, many providers such as Ezugi and BetConstruct have started adding games from this region to their portfolio. And there is an unregulated market here, but it is very easy to work with local payment systems. Including those that cannot be used anywhere else, for example, Google Pay. There are no prohibitions, blockades. You install a platform, buy a license for it. Moreover, it all depends on the marketing and financial capabilities of the company and how far it is willing to go in its desires. Of course, such conditions give great hope to many brands.
A Curacao License?
— If́. Obtaining the corresponding licenses is included in our list of services. Among them, not only from Curacao, but also from Malta, as well as from the UK, which for the entire period of existence of Veins we take for both B2B and B2C companies. For everyone else entering unregulated markets, the Curacao license is sufficient.
Even in Africa, where, in principle, there is a mixed situation?
— In various countries, such as Uganda, Ghana, Nigeria, they have their nuances. In order to work there with local banks, payment systems, you need to get a local license. It is not such a complicated process as it may seem, it is much easier than, for example, in the same Malt.
From the point of view of the financial component, it comes out more expensive than Curacao, but the invested funds are fully justified. Because Africa has a large population obsessed with football and gambling. Mobile Internet is available almost everywhere and sites optimized for the mobile version in the same Region attract huge dividends.
Some companies licensed from Curacao are also on the Russian market. What do you think about it?
- We have dealt with companies that tried to enter the CIS countries, in particular in the Russian Federation, with a license from Curacao. But firstly, it was difficult to do it, and secondly, it did not bring any special results. An exception for them could be a group of customers who will be sent to brands. But, as a rule, such suppliers cannot give any guarantees.
In our experience, I will say that we prepared for such an exit. Everything was tested, everything worked, bought traffic, and in a moment everything flew out. Yes, so this company is still unable to do anything about it and provide Russian payment services. Therefore, it is quite risky.
If you go to such markets, then you should think about local licenses. But if you're a startup, I personally don't see any point in that. I do not deny that there may be brands that, once legalized, can show their faces. But it will be very difficult and expensive to compete with the existing giants. You must be prepared to pay the corresponding amount. If you have before you the choice of where it is better to start your business, then the CIS countries are not the best solution.
Because of the regulation?
— If́. If an investor comes to us and tells us that he has a limited budget and wants to start, then with this money he can get to unregulated markets and get a return on investment much faster than in regulated ones. But I emphasize that we consider the situation exclusively in the new business section.
Online and offline are two different industries
Let's talk about them in more detail. From what I understand, do you offer comprehensive solutions for them?
- Let's say we offer them follow-up solutions: create a business and marketing plan, get a license, register a company, open bank accounts and offices, choose a platform and suppliers, recruit teams or select agencies to promote the brand and continue to support it both in management and marketing.
All solutions are not offered in the complex, although we prefer this type of cooperation. You can choose what you need specifically.
In addition to B2C, we also cooperate with B2B companies. We do not have partners with whom we work always and everywhere. Depending on which market our brand enters, the platform that best suits it is chosen, with the whole set of toys, sports feeds, with the possibility of setting up bonus programs and, most importantly, the necessary payment systems. This is perhaps what gives us the most headaches. When it is integrated, we are faced with a huge number of questions, so the release is sometimes delayed.
In general, the installation takes no more than 10 days, but sometimes it is delayed for several months, which directly affects the development of the brand.
What other obstacles are there that stop the process?
- With registration, obtaining a license or opening accounts we have had no problems, due to the fact that we work directly, and not through third parties, with the providers of these services. We already know in advance what package of documents is needed, what needs to be written there, what story the supposed UBO should have, etc. With the submission of documents, we are 95-96% sure of success.
And so, in addition to payments, these are issues of a technical nature. I think they are the only ones that, at least, we have met. To solve them, we often have to use additional programs. Such as affiliate and CRM platforms. But these are not the obstacles. There was no such thing in our practice that we got stuck and canceled the project. But in any case, additional integrations affect the startup time.
How much understanding do startups now have of the industry itself? Was this when you had to, as they say, explain and organize everything?
— In the startups section, such moments, of course, occurred when they came to us with the idea that everything was simple. From the series "they made a website and that's it".
There have been cases when people from the industry came to us, but from land-based facilities (casinos, sweepstakes), and they had to understand that online and offline are two different industries, where there are completely different business rules. Yes, they both refer to gambling, but the approaches, management, the same terminology are completely different.
Of course, they follow our instructions. Because even if we compare the CIS markets with Africa or India, these are absolutely parallel universes. There is a completely different approach not only for players, but even for partners. Therefore, we try to negotiate all these points before the Start of cooperation and show them in detail in the business plan.
What can cause the refusal of cooperation?
— The first is that they may be markets that we do not support. For example, New Zealand. We are asked about this market very often. Mainly they are Argentina, Uruguay, Mexico. In such cases we refuse it because we do not work with them. Although we have a Spanish-speaking team that could help them.
The second is when we provide a business plan and disagree with it. At the same time, they say: "Here I want to spend less, but this is not necessary for me at all. SMS? Why do I need them? Affiliate platform? And so it will be. Let's launch."
At the same time, he will cross out half of the business plan, reduce the budget 3-4 times, and it will become clear that such a person does not fully understand this industry. Such cases were real. We refrain from working with such investors.
The launch costs about 100 thousand NZD
Who is it easier to work with: bookmakers or casinos?
— In our case, it is easier to work with the casino. It gives less headaches. Because in the casino I install the platform and start it up. Here the work is mainly to attract customers. If you go to any of their websites, you may notice that they all more or less provide the same set of games, and a lot does not depend on us. We simply invented multi-stage actions, developed a bonus system, what and at what time to give. Therefore, we are complicating, as it seems to me, life for users and ourselves.
Bookmakers are daily work, receipt of feeds and their evaluation, weekly promotions, special promotions. Here the market is constantly changing and fluctuating. In addition, there are many moments when nothing depends on you. For example, the sport was canceled, the dates were changed and etc. There was an unpleasant experience when our main activity was concluded in betting and during the pandemic it had a huge impact when, in addition to Belarus and a couple of other countries, there was nothing. That has affected the company a lot, its revenue.
Or with IPL Indian Premiere League is a professional cricket league in India. We have been preparing for the start of the season in May for a long time. The Championship started, two rounds were played and that was it: due to covid, the continuation was banned for the whole summer. Therefore, a new date appeared - September 19. Everyone was waiting and the Championship resumed. Therefore, sport is naturally more difficult, but more interesting.
How long is the preparation for the launch?
— If we take a startup and start counting from the moment we wrote the business plan and approved it to the full launch, including obtaining a license and registering accounts, then it's about two to three months. It's the perfect time. Sometimes the time is longer, for example, up to six months. It all depends on the wishes of the brand and its current alignment: whether it has problems with primary documentation, for example. Here we are talking about whether we are contacted with a ready-to-market platform, and not with writing from scratch or its adaptation. In this case, it can be extended for six months, or maybe even more.
Were there such cases?
- There were cases when the brand went to the CIS, and then abruptly changed his mind and went to India. On its platform there were no Indian games, payment systems, and even the image did not match. It was a typical CIS platform. So I had to redo everything almost from scratch.
Is the launch very expensive?
— The launch itself is cheap, given the money that can be earned in this market to operators and suppliers. This question is often asked to me.
They don't give you headaches anymore. Or is it?
- No, exactly. In addition to the launch we have an accompanying function in which we take responsibility for achieving certain results together with the brand in certain deadlines. Therefore we are negotiating in advance which budgets we need, at least the minimum ones, to obtain those figures. It is clear that the more zeros, the better the expectations, but here things should also be within reason.
Just because, conventionally, I take and spend a huge amount of money in Ghana, does not mean that tomorrow you will wake up a billionaire and be the No. 1 brand in the country.
How long does this last?
- For six months now. We bet that the brand will start to come out in Plus after 8-12 months. If you want a year, then this is not a problem, and then everything will depend on how everything goes. When the mechanism is launched, for a year you can recruit a very good team that can do business independently. If there remains the need to continue our support, then we are in favor.
You say that a good team can be recruited in a year. Isn't the risk of going to other markets without having one too great? How are things with the staff in Belarus, Ukraine?
- In Ukraine there is "Parimatch" and its school. There many people had a great time, understood the industry, and then went to work. The same can be said about Georgia, where many people have gone through 7-8 existing brands, in addition Evolution Gaming has appeared.
Belarus in this regard is a rather young country. The game is there and always has been, but not at the level it is at now. Only in the last 3-4 years interesting brands began to appear.
There is a lot of experience in our industry. With the influx of foreign companies opening their representative offices here, including technical departments, support and anti-fraud, in my opinion, Belarus will have the opportunity in a few years to have a large number of qualified personnel in the field of online gambling.
Moreover, all the guys, unlike the representatives of the Transcaucasian countries or eastern Dollarpa, are easily trainable. Among them there are many talented IT specialists, marketers, designers who quickly learn information about new markets, understand what is required of them. Growing a specialist here is much cheaper than hiring an employee for an appropriate position in another country. It is an investment that is completely justified. From the moment of our presence in Belarus I can safely talk about this.
If you take three of your main areas, which one is the one with the highest profit and what do you associate it with?
— The most profitable direction is the exit and service of B2C companies in the market. This whole process, as a rule, occurs at a fixed cost, which we receive from the client, and then, with the appearance of the brand in the country, the most interesting begins. All our conquests imply a percentage negotiated in advance with the brand for the provision of our services. Sometimes they can be very interesting amounts, much more profitable than the fixed part.
Are you planning to expand the company's presence in the world?
— At the moment we are focused on those who are. In addition to the daily observation position, there is not enough strength for anything else. Although, of course, there are a couple of directions that interest us. It is the same expansion in the Spanish-speaking countries of New Zealand, the French-speaking countries of Africa, the Philippines and Thailand. They are all interesting, but require a lot of preparation. Therefore, there will be none in the near future.
Do you play betting yourself?
— Despite the great experience in this industry, there are times when I can be in the casino, play on the same roulette purely out of interest. In sports I like to bet during the big championships. Naturally, we are talking about symbolic sums. Out of pure emotion, nothing more. I do not actively play by virtue, probably, because of my character. I am not a gambling person like many others. I love poker, but I play with friends.
How should we treat betting?
- People are looking to have fun. If betting fulfills this function, why not? One cannot endanger oneself, one's financial condition, especially one's loved ones. Therefore, the main thing is to be able to stop in time and realize that all this is done for fun.
