Ivan Montik grew up in Minsk at a time when the republic was embracing a tech revolution. Belarus remains one of the most repressive states in the Former Soviet Union (FSU) but oddly, the IT sector there has flourished, winning a world class reputation as home to some of the best engineers in the world. And it was that pool of talent that is the bedrock of the success of Montik’s company, Softswiss, that produces platforms and other tech solutions for online gaming companies.

In the last three years revenues have doubled every year and from its traditional markets in Europe, the company has expanded internationally. It is growing fast in South America, with a big footprint in Brazil, but has also acquired a platform in South Africa and is making its first moves into the US market.

Montik, who has always been interested in business, has a flair for entrepreneurship. He has been adding fintech to software development and other tech services he provides for the iGaming industry, that is worth around €48 billion a year in just Europe in gross gaming revenue (GGR) – the total value of player bets or stakes minus the amount paid out to players as winnings. However, like many entrepreneurs from Emerging Europe, he believes the biggest upside will come from the Global South markets that have just started to hit their stride in the last few years and the IT industry in many areas is already putting in explosive growth.

Tiny conference stand to Bitcoin pioneer

After studying mathematics and programming at the elite State University of Belarus in Minsk, but switching to business halfway through, Montik established Softswiss in 2009. He then restructured the company in 2012 to focus on iGaming after the Republic’s first big tech company acquisition deal, which was in the iGaming sector. By then, Montik had already set up and sold a successful car washing business, among other things, before going to work for Austrian bank Raiffeisen to run the large corporate customer accounts, and then to KP Media, owned by the legendary American entrepreneur Jed Sunden.

Having set up the Kyiv Post in 1995, Sunden went on to transform Ukraine’s media scene and was hoping to do something similar in Belarus, hiring Montik as a manager to help. However, when Sunden balked at upping his investment Montik started to think about what’s next for him professionally.

Speaking about his job at Raiffeisen, Montik says, “I learnt a lot from that: how to deal with money, balance sheets, and big businessmen. It also taught me to treat your staff well.” But after a few years of banking and media, Montik returned to his first passion: the tech sector, which was booming all around him.

Belarus and its High Tech Park (HTP) had already made Minsk an international tech hub that was mainly focused on outsourcing. The park was the brainchild of the founder of EPAM, Arkadiy Dobkin, who got Belarus’ IT sector rolling before eventually listing on Nasdaq in New York, Belarus’ first and only US IPO in 2012, where he and the company are now based.

At the end of 2011 in a prelude to EPAM's public offering, Israeli billionaire Teddy Sagi, founder of the leading publicly-listed online gaming firm Playtech, bought Viaden Media, founded in Minsk by Viktor Prokopenya, for a reported €95mn. The deal changed Montik’s whole approach to business. He had set up and was already running a software service like many others in Belarus, but this deal refocused him on creating unique products.

“Everybody from our industry, from IT, was looking at this deal with huge interest, of course,” Montik told bne IntelliNews in an exclusive interview. “I saw this case, and I was wondering why I'm doing the service when I can make my own products and eventually find a very good exit.”

Softswiss went into iGaming at the start of the next year. Montik focused on the gaming industry and built his first iGaming platform with a view to launch it at the start of 2013 at the International Casino Exhibition (ICE) conference in London, one of the biggest gaming conferences in the business.

 “And we did it!” said Montik. “In a half a year, we created the first version of the product, and some games as well, without any real knowledge of the industry.”

Softswiss had a tiny ten square metre stand at the conference, whereas the big players, like Playtech, had hundreds of square metres. But on the sidelines of the event, Montik says he found similarly sized small gaming site operators and his first customers.

The way that the business works is there are operators that have sites and existing customers, who gamble as a form of entertainment. However, these operators do not tend to build their own sites and are always looking for suppliers that provide the platform and new game formats. One of Softswiss’ big competitive advantages was the platforms tended to be unstable and crash regularly, downtime that cost the operators money. Softswiss claimed to provide the most stable platforms in the industry, a claim that was true, based on Belarus’ superior coding skills.

The way they get paid is the operator doesn’t buy software or pay fees but shares a percentage of the revenue with the supplier. In this way the operator and supplier both have a vested interest in the success of the other and small companies can grow together to become big.

And being a supplier is a much simpler job. The operators are governed by the gambling laws in each country where they have customers – online gaming is not permitted in every country. However, the suppliers are not subject to the same rules. Softswiss has companies in Malta and in the Isle of Man, amongst others, both of which are havens for online gaming which gives easy access to other markets.

“Some of the incumbents have been around since the end of the 1990s and were stuck in their ways. We are from a new age. We are from a new era that used the newest technology at that time,” says Montik. “There are a lot of brilliant people in Belarus from the IT industry as well that basically push this idea… that our technology is much more stable. At that time, a lot of platforms weren't just having down times all the time, they thought it was normal. We changed that. Our solution had no downtimes at all.”

Bitcoin

The quality of Softswiss’ engineering is the bedrock on which the company is founded and Montik is constantly innovating in partnership with his operator customers. The company’s claim to fame is it was the first in the world to integrate cryptocurrency into its gaming platforms.

In 2013 Cyprus was hit by a large banking crisis. The Mediterranean island state was a favourite banking offshore haven for many businesses and even middle classes from Eastern Europe. At the time, Montik was watching capital starting to flow into bitcoin for the first time, so he began thinking about the possibility of using bitcoin as a gameplay tool – something that has never been done before.

“I said to my guys – let's integrate Bitcoin gameplay into our platform, so we can accept payments and have fraud prevention and player protection, incorporating bitcoin into the gameplay itself,” says Montik. “So, we did it, and we were the first in the world to do this. By the autumn of 2013, we had a queue of clients waiting for the setup.”

The creation of a bitcoin platform made Montik a minor celebrity in the cryptocurrency world and drew a lot of attention to Softswiss and its services.

“This was a real turning point in my career where we started to be known as a crypto casino supplier company, or something like that,” says Montik. “Even now, when we don’t really have a major bitcoin operation, people still know us for it because we were the first.”

Robust revenue growth

Today Softswiss is reporting robust growth in its core iGaming business, with gross gaming revenue (GGR) – all bets minus wins – across its platforms reaching nearly €700mn this September alone, as the company explores expansion through acquisitions and strategic spin-offs.

Montik said there are no immediate plans for an initial public offering (IPO) of Softswiss itself, citing the company’s maturity and complexity. “The business is already on this level that to have an IPO is quite complicated,” he said. “I can't explain to myself or to my partners why we need to have an IPO. But there are some parts, like the fintech business, that might be eligible at some point.”

Montik said the company's monthly GGR positions the firm among the top B2B suppliers in the sector. “We’re not the biggest, but we are one of the largest from the supplier point of view,” he said.

The company was founded in Belarus in 2009, first as a software services business. After the country was rocked by the mass demonstrations that broke out following Belarus President Alexander Lukashenko’s blatant falsification of the presidential elections in August 2020, the operation was moved to Poland and Georgia – both IT hotspots in the former eastern bloc. Montik, who moved to Germany in 2016 with his family, said he was back in Minsk on holiday in July, 2020. After the police started arresting opposition leaders he has not been back in Belarus.

Since going into iGaming in 2012, Softswiss has pursued a strategy of horizontal diversification. Montik has launched several parallel businesses outside the core platform, including CoinsPaid, a B2B cryptocurrency payment gateway, and Affilka, offering tools for managing and tracking affiliate programmes for iGaming and other online businesses, which work with partners who send traffic in exchange for rewards.

Montik confirmed that while Softswiss will remain privately held, CoinsPaid could become the group’s first candidate for an IPO. “It’s like Revolut, but only in cryptocurrency and only B2B,” he said. “I don’t have experience with IPOs, but I think it’s quite an interesting exercise.”

CoinsPaid offers software solutions for cryptocurrency acquiring, including point-of-sale systems and e-commerce integrations. “If you want to pay in crypto instead of fiat, we have the solution for that,” Montik said.

Similar to the strategy of the much bigger peer EPAM, Softswiss is also actively investing in mergers and acquisitions, particularly in game studios and new technology startups, including a reporting tool developed by an external founder. “We invested and put them into our infrastructure to help with growth and got, obviously, some share of it,” Montik said.

Gambling

Gambling has a bad reputation, but Softswiss and most of the operating companies are careful to avoid compulsive gamblers and have built-in checks and precautions to prevent punters from getting into trouble. Montik says that the services he produces is closer to Netflix than it is to a casino – it’s a popular form of entertainment, not a way to get rich fast.

 “You need to understand that online gaming, and that's why it's called iGaming, is completely different to the gambling world. People that are playing online are completely different people – 99% play just for fun, for entertainment,” says Montik. “No one wants to work with people with problems. It just creates headaches for everyone.”

The operator monitors people’s playing habits and if they spot a problem then limits are imposed, or a cooling off period is enforced. In bad cases the user is simply banned before they can get into trouble.

In iGaming the key metric is the RTP, or the “return to player,” which measures how much a game gives back to players in the long run. A higher RTP means better odds for players, even though in the short term, actual results can differ widely because gambling outcomes are random.  The operators are looking to capture a customer and keep them.

Montik says like Netflix, iGaming becomes a habitual form of entertainment with a wide variety of games the punter can choose from. Slot machines in a pub or café have an RTP rate of at best 50%-60%, whereas iGame sites enjoy rates of 96.5% on average, according to Montik.

New markets

With Softswiss growing strongly, Montik has been casting about for new markets and has targeted several of the leading Global South countries as offering the most opportunity, having already moved into several South American markets and South Africa.

While Softswiss is a European company, Europe remains a difficult and bureaucratic place to work in the gaming industry, says Montik. Softswiss holds a B2B licence in Malta, once considered the epicentre of European iGaming regulation, although Montik said its value has diminished as more EU countries implement their own licensing regimes.

“Each country wants to have its own regulation, invest its own money, create some bodies, and hire people far away from the business,” he said.

The EU is supposed to be a “common market” but the fragmented nature of regulation across Europe — where countries like Estonia are considered progressive, while others such as France maintain near-monopolies — undermines the EU’s principle of borderless trade.

“There are a lot of lawsuits on the European level right now about this,” Montik said. “The EU is supposed to mean the freedom of movement for capital, labour and goods, and it doesn’t.”

If Europe is overregulated, the new markets are underregulated with many governments only starting to address the legal regime needed to govern gaming. Softswiss is accelerating its expansion in South America as Brazil’s newly regulated online gambling market emerges as one of the most promising globally and has already established itself as a market leader.

“Almost all the countries in South America and Latin America understand what is online gaming, online dating, and they are creating the regulation. Brazil introduced the regulation only in January and the business is now booming.”

Montik said Brazil's legalisation created significant opportunities for technology suppliers, with the market projected to grow from €4.8bn today to €10bn by 2029 in gross gaming revenue (GGR), which would put it on a par with the revenues from the current European business. Looking at the size of the sector, the UK is currently the biggest market in Europe, says Montik, who is hoping Latin America will become the engine of growth.

The company first targeted Brazil several years ago in anticipation of regulatory change. More recently it has been actively promoting itself with a partnership with Rubens Barrichello, an ex-Formula One driver and Michael Schumacher’s partner at Ferrari. “He is representing Softswiss as a non-executive director in Latin America, in particular in Brazil,” says Montik.

South America’s iGaming potential, particularly in Brazil, Mexico, Colombia and Peru, is increasingly drawing attention. Mexico, with a population of 130mn, and Brazil, with over 200mn, offer a young, digitally engaged user base and a favourable climate for rapid digital adoption. Montik said many industry players underestimate the “power of South America”, where economic and digital development levels in some cases surpass parts of Europe.

Despite the online market’s liberalisation, Brazil still lacks regulation for land-based gambling. “It’s funny, because literally I can’t think of any country where online is regulated and offline is not,” Montik said. Offline gambling has been banned in Brazil for years, although the country’s players were previously the world’s largest source of outbound casino tourists, known in the industry as “junkers”.

South Africa opening up

Softswiss has expanded its operations into South Africa as well through the acquisition of a long-established local sports betting supplier.

Montik says South Africa has the second-fastest growing online gaming market globally, after Brazil. “We decided to invest in this market and establish ourselves there,” Montik said, citing both economic potential and a gap in technological standards among existing suppliers.

The acquired company, which had operated in the South African market for over 30 years, has given Softswiss immediate access to local licensing and certification. “To go into the country from scratch is quite difficult,” Montik said. “It would require a lot of time to get all these approvals... so we chose a much easier way to speed up our entry into the market.”

Softswiss has already launched one operator using its platform in June, with several more in the pipeline for later this year. Montik said the move mirrors the company’s earlier expansion into Brazil, where it introduced its modernised solutions to replace outdated technologies used by legacy operators.

“We do the same move we did ten years ago,” Montik said. “With the most reliable, most stable, most modern technology, we want to penetrate this market with our solutions.”

Belarus and Russia are now closed to outsiders

Softswiss has halted its operations in Belarus and does not plan to pursue opportunities in Russia or Ukraine in the near term due to political and regulatory instability, founder Montik said.

The company obtained a Belarusian online gambling licence shortly before the 2020 mass protests, but ethical concerns led Softswiss to abandon its plans and quit the country entirely. The bulk of the company’s engineers were based in Minsk, but they were all offered the option of relocating to Poland or Georgia and many left.

Belarus had created a viable online licensing structure, with requirements tied to land-based operations. “You needed to have four years in land-based, like slot halls or casinos, to set up an online business,” he said. Softswiss had partnered with a licensed operator and purchased a slot hall to support the licence application, but the project was shelved following the political crackdown. 

Ukraine, which introduced its online gambling regulations in late 2021, has also faced disruption. “The licence regime was well established, but now they have completely dismantled the current regulator and created a new one,” Montik said, referring to a recent restructuring of the licensing authority as the cash-strapped government hunts for fresh sources of revenue.

“Even Zelensky said that a lot of soldiers gamble when they have breaks from the front,” he said. “I think they just want more money,” he added, referring to the government’s shifting approach.

In Russia, online gambling remains effectively banned, with the government restricting activity to a handful of designated land-based gaming zones, including the seaside resort town of Sochi, which also hosted the Olympic Winter Games in 2014. Montik confirmed that Softswiss does not operate in Russia. “Online is also kind of banned,” he said, citing a fragmented and unattractive regulatory model. “But of course it goes on.”