#16: When Politics Meets iGaming

Let's talk about how politics can really shake things up in our industry, especially when it comes to online gambling in places like Bangladesh. 

It's a perfect example of why we can't ignore the political side of things when we're looking at new markets.

You know, it's funny. Despite all those PESTLE frameworks we learned about (yeah, I'm looking at you, business school), we often forget to actually use them in real life.

I'm guilty of this too. When I finished my Masters in marketing at CIM, I pretty much chucked those fancy frameworks out the window and got back to business as usual. Looking back, I was probably wrong to not revisit them once in a while.

In today’s essay, we'll dig into the specifics of what's happening in Bangladesh. Trust me, it's more relevant to our industry than you might think, and there are lessons here that apply way beyond just one country. 

Current Political Landscape in Bangladesh

So, here's the deal: Bangladesh is in a bit of a political pressure cooker at the moment. There is significant tension between the ruling Awami League and the opposition parties, primarily the Bangladesh Nationalist Party (BNP).

There are allegations flying left and right - corruption, electoral fraud, you name it. The opposition is basically saying democracy is going down the drain. Result? Protests in the streets and the government cracking down hard.

Now, here's where it becomes relevant to online gambling. This political situation is leading to frequent internet shutdowns and ramped-up surveillance. Online activities are significantly impacted, including gambling.

Political Impact on Online Gambling

The government’s conservative stance on gambling is influenced by both political and religious factors, leading to strict laws against both physical and online gambling. This has created a hostile environment for online gambling operators who face significant legal and operational risks.

#1: Internet Shutdowns and Censorship: The government frequently resorts to internet shutdowns and censorship to control the flow of information and curb dissent.

These shutdowns disrupt all online activities, including gambling. Operators cannot provide consistent services, leading to a loss of users and revenue.

According to reports, these internet shutdowns are part of broader measures to control political unrest and are often implemented during protests or elections.

#2: Increased Surveillance: The government has increased digital surveillance to monitor and suppress political opposition. This surveillance extends to online gambling platforms, making it risky for operators to function.

Users are also wary of engaging in online gambling due to potential legal repercussions and privacy concerns.

How has this situation impacted online gambling metrics?

Let's take a look at what the Blask Index is telling us about the Bangladesh market from May to August 2024. It's painting a pretty clear picture of how political instability and internet shutdowns are shaking things up.

At first glance, the index shows the market holding steady at around 800K to 1M. But then things get interesting. We see some sharp drops in mid-June and late July. These line up with times when political tensions were running high and the internet was getting cut off.

Here's the curious part: after each internet blackout, there's a quick jump in the index. It's like everyone rushes back online to place bets as soon as the internet's back up. But this boost doesn't last long. The market soon dips again, showing just how unpredictable things are due to the political situation.

What does this tell us? Well, it's a stark reminder of how closely political actions, like internet shutdowns, are tied to market stability and business operations in the region. It's not just about regulations anymore - it's about whether your customers can even get online to use your services.

This volatility makes planning and operating in the Bangladesh market a real challenge. Anyone looking to do business there must be attentive and adaptable

The dip in the Blask Index suggests a significant market contraction. This drop could have caused operators in the Bangladesh market to lose an estimated $54 million in eGGR (estimated Gross Gaming Revenue) during this period.

I double-checked this data through trusted affiliates…

I reached out to Alina Famenok, CEO of Already Media, to get some real-world data on how the situation in Bangladesh is affecting affiliate marketing. Her insights give us a clearer picture of what's happening on the ground.

This is far from the first time we’ve seen this…

Remember Kenya? They decided to crank up taxes on betting stakes. Result? Major operators like SportPesa packed their bags and left town. 

Then there's the Philippines. They went on a bit of a warpath against Philippine Offshore Gaming Operators (POGOs). The government was worried about tax evasion and national security.

And who can forget the good old USA? Back in 2006, they dropped the Unlawful Internet Gambling Enforcement Act (UIGEA) bomb. Suddenly, banks couldn't process online gambling transactions. The industry took a big hit until states started legalising it on their own terms.

What's the takeaway here? Political decisions can turn the gambling industry upside down faster than you can say "jackpot". It's a stark reminder that in this business, we're not just playing against the house - sometimes we're playing against the government too.

Lessons for businesses in volatile markets

The situation in Bangladesh offers critical lessons for businesses operating in politically volatile markets:

#1: Diversification: Don't put all your eggs in one politically wobbly basket. Spread your bets across different markets. If Bangladesh goes offline, you've got other revenue streams to keep you afloat. 

#2: Regulatory Compliance: Stay on top of the rules because they change faster than a chameleon in a disco. Keep your ear to the ground for any legal shifts and make sure you're always playing by the book. It's a pain, but it beats the alternative of legal headaches.

#3: Adaptability: Be ready to pivot faster than a politician's promise. Internet shutdowns? Have a plan B. Increased surveillance? Beef up your security. New laws? Be ready to change course. It's like playing chess, but the board keeps rearranging itself.

#4: Engagement with Local Stakeholders: Make friends in interesting places. Build relationships with local stakeholders. They can give you the inside scoop on any potential issues.

Which other markets face risks in the near future?

• Nigeria - Political instability and frequent policy changes are creating uncertainty in the gambling sector. This environment may lead to increased regulation and is driving a significant portion of the market towards offshore operators.
  

• India - The complex political landscape has resulted in conflicting regulations and legal uncertainties across different states. This situation is indirectly contributing to the growth of offshore gambling markets.

• Brazil - Political changes and slow progress in establishing a comprehensive regulatory framework have left a gap in the market. As a result, many players are turning to offshore gambling operators.
  

• Turkey - Strong governmental control and stringent regulations on domestic gambling have inadvertently led to the growth of a substantial offshore gambling market.
  

• Egypt - Political instability coupled with a strict regulatory environment for gambling has created conditions favourable for the expansion of offshore gambling markets.

Conclusion?

Whether you’re an operator or an affiliate, having a diversified strategy is so important. This isn’t so much an article about Bangladesh but a case study for how your business can be severely impacted by situations that are unrelated to gambling.

Sometimes those Business 101 frameworks can be so basic they’re boring. But dust out your PESTLE analysis, and it may just help prevent an absolute disaster for your business.

And to finish off…

Let me know what you think of this essay. Hit reply. I’m curious to know if you liked this topic and whether you have any thoughts on the subject.