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. Operating non-original content allowed Russian gambling mafia to save more than €10M in unpaid royalties. Novomatic obviously know all about illegal copies in CIS countries for years and can do nothing about it. Despite that GreenTube – online division of Novomatic – trying to make a deal with number one well know illegal gambling content provider of pirated games in Russia. Quite a strange decision in the field of online gambling for such a large and respected player, isn’t it?
Playson, established by 2 Russian entrepreneurs Sergey Tokarev and Rustam Gilfanov, never developed a lot of legal unique games. It was previously known as Globo-Tech company – large producer of counterfeit content, founded in Moscow in 2001. It has found “innovative” approach to produce game content for land-based casinos by copying hundreds of famous titles from Novomatic and NetEnt, like Book of Ra, Lucky Lady’s Charm, Dolphin’s Pearl, Ironman, Hulk, Gonzo’s Quest, Starburst, etc. Globo-Tech become especially successful after gambling ban in Russia in 2007. Starting from that year, majority of gambling operations in Russia moved online, and Globo-Tech 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-based addicted players. Such brands as Va-Bank casino, BestForPlay and Vulkan Deluxe were amongst the flagship B2C products promoted by the company. Following its bootlegger nature, Globo-tech/Playson also unlawfully used various protected brands and trademarks as names for its online casinos, such as Gaminator, Admiral, Vulkan, etc.
Keeping up with global practices, an affiliate program was established – firstly known as GGS Affiliates, and later renamed to Lucky Partners. It allowed any webmaster open and run illegal casino web sites with pirated content. 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. Thousands of sites been created and a lot of money laundering happening every day. Lucky Partners did a good job of educating the promising Russian market to operate only pirated content, causing major game vendors like Novomatic, Playtech, NetEnt to lose tens of millions of euros in revenue.
Seeing its profits rising, company started thinking about cleansing its reputation. Not stopping at pirating activities, Mr. Tokarev and Mr.Gilfanov decided to simultaneously run some legal business – 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. Such brands are needed in part to clear the reputation, and more importantly, serving as a cover for payment processing on the “black” sites.
All mentioned brands and 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, customer support and game development itself. They advertise very heavily on torrent and porn sites with illegal content via own pocket AdWise agency (https://adwise.agency/en/) – another facade project to cover shady advertisement campaigns targeting Russian customers.
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. The new partners of Novomatic Sergey Tokarev and Rustam Gilganov, as easy google search shows, were involved in sectors as money laundering, hacking or even terrorism. 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. 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.
It is surprise how bad Novomatic wants to make money in Russia, which put on the risk their reputation in Europe. We’ll be watching with interested of such “help” from Austrian and German customers of Novomatic and hope that top managements of Novomatic-online understands that “some money smells”.
