Novomatic to Buy Russian Bootleggers

It sometimes happens when being on a buying spree large companies might come across seemingly delicious asset which soon reveals itself as a dark horse, causing more problems than benefits. Several trusted sources claim it is now time when one of the largest gambling players in Europe – Novomatic Group is standing just in front of such pitfall. Its next acquisition target is a relatively small company named Playson, owned by several citizens of sanctions-tied Russia, and is known for being responsible for much wider area of operations than just game content producing. What now looks like a perfectly legal Maltese-based content provider, in fact has its roots in long-established operations of counterfeit content on Russian gambling market, and surprisingly, most affected European company which is being hurt by such operations is the Novomatic itself.

Playson, established by 2 Russian entrepreneurs – Sergey Tokarev and Rustam Gilfanov, was previously known as Globo-Tech company – large producer of counterfeit content, founded in Moscow in 2001. Company based its games on the most famous titles from Novomatic and NetEnt, and become especially successful after gambling ban in Russia in 2007. Starting from that year, majority of gambling operations in Russia moved online, and GloboTech was one of the leading providers of both copied gaming content and platform solutions for blooming black market. Considering huge profits and incredible growth pace, it was no surprise company started doing casino operations itself, again using copies of famous slot titles from Novomatic and Igrosoft companies, – well known titles for previously land-base addicted players.  Such brands as Va-Bank casino, BestForPlay and Vulkan Deluxe were amongst the flagship B2C products promoted by the company.

Figure 1 Counterfeit Book of Ra game at Vulkan site

 

Keeping up with global practices, an affiliate program was established – firstly known as GGS Affiliates, and later renamed to Lucky Partners. By using offshore company registration, absolutely no licensing requirements and zero royalty fees due to the counterfeited content, brands included in GGS affiliates showed tremendous growth rates and allowed company to take significant share of shady Russian online gambling market. Number of URLs included in portfolio was growing – such names as Fortuna, Eldorado, Twistcasino, Velkam Deluxe, Geiminator-Slots, SuperSlots later appeared, all using same illicit content provided by Globo-Tech.

Figure 2 Counterfeit Book of Ra game at Super Slots site

 

Seeing its profits rising, company started thinking about cleansing its reputation – as a result, couple of seemingly “white” brands appeared on the market: Joy Casino, Casino-X and Pokerdom. This time, brands were using legal content from Microgaming, NetEnt and other vendors ( including “legal” part of Playson), and operated by a Cyprus-registered company called Darklace Ltd. under Curacao license of Pomadorro N.V., all gathered under umbrella of PoshFriends affiliate program. Interestingly, poker site PokerDom claims itself as being operated by Darklace Ltd., and at the same time offered inside Lucky Partners affiliate program, which is still in active operation.

Figure 3 WebMoney top-up page at Super Slots showing relation to Pomadorro N.V. and geiminator-slots.com

 

Figure 4 Geiminator-slots.co site with counterfeit Novomatic content

 

All these companies are known to be de-facto operated and administered by Ukraine-based company Lucky Labs. Masking itself as a game-developing company, Lucky Labs office serves as a main hub for full range of business activities: both “grey” and “white” casino operations, platform software development, affiliate program, marketing (carried under AdWise brand – another façade project to cover shady advertisement campaigns targeting Russian customers, including ads in pirated videos distributed via torrents), customer support, and game development itself.  Previously split between Moscow and Kiev, company moved all of its 400+ employees to Ukraine several years ago. Quite a strange move, considering Russia-Ukraine conflict and the fact gambling is completely illegal in Ukraine. It is no surprise such activities are not treated positively by Ukrainian authorities – owners of the company Sergey Tokarev and Rustam Gilfanov are currently under active prosecution, and were even put to the official Ukrainian president-signed sanctions list of banned individuals, which implies prohibition to enter territory of Ukraine as well as full assets freeze. And while Ukrainian special intelligence services keep investigating the illegal operations of these prominent Russian citizens, their group of companies seek ways to improve reputation by making ties with some reputable foreign companies.

Ironically, current possible target for the potential partnership is the company which was hurt the most as a result of shady part of Playson’s activities – unpaid royalties for the counterfeit Novomatic content used in Russian popular casino brands and produced by Globo Tech estimated to be more than €10M. Dozens of Russian online slots products still prosper based on this pirated content, and enjoy huge amounts of incoming traffic from both AdWise media buying and Lucky Partners affiliate program, and around 80% of the GGR is coming from the Novomatic titles.

Should the deal between Novomatic and Playson come to life, there will be a huge signal for the darker side of gambling market, especially in such countries as Russia, China, Turkey, etc that indicate any copyright infringements can be later justified and monetized. It is now turn of the large gaming companies to decide whether to send such signal.

 

 

 

 

 

 

 

 

Comments

comments