Regulation of sports betting in India will be a win-win: Parimatch International CEO Anton Rublievskyi

Parimatch, an international sports betting company, has its sights firmly set on emerging markets, including India.

Founded in Ukraine in the mid-1990s as a retail-only business, Parimatch has evolved into a pure-tech company, with operations across the Commonwealth of Independent States (CIS), Europe, Asia, Africa and Latin America.

Parimatch entered the Indian market last year and has been aggressively marketing itself, most notably during the recently concluded India-England cricket series.

We caught up with Mr. Anton Rublievskyi, CEO of Parimatch International (PMI) to better understand how the company is dealing with the ongoing Russian war in Ukraine, its expansion strategy and consumer learnings, especially from India.

Rublievskyi also offered insights into the user trends we can expect in the iGaming industry and the ethical, legal, regulatory and tax hurdles facing betting service providers.

Finally, Rublievskyi, who became an entrepreneur while still a teenager, shared tips for others looking to start their own ventures.

Here are the edited excerpts:

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Question: The ongoing Russian war in Ukraine is obviously a matter of great concern. Being a Ukrainian yourself, and Parimatch being a Ukrainian-origin company, can you share with us the impact of this conflict at a personal level? Also, how is Parimatch, as a company, responding to this crisis?

I think everybody knows from news [how bad the] situation is [in Ukraine].

Everyone [on our team] was in Kiev that day. We woke up from bombs falling down [on our] native city…[on] our homes. [On] a personal level I don’t think I was feeling anything more dangerous in my life than that day.

It’s a fact that [the war’s] affecting lives of millions of our Ukrainians everyday…people losing everything…businesses, houses, apartments, families…so it’s awful. This should not happen in the 21st century.

I, with my wife, my kids - I have three kids - was evacuating from Kiev the next day and saw the big [number] of tanks and military planes near us. I don’t want it to happen to my country, my family, my friends…We lost a few employees during this war, which is very painful.

Definitely it’s impacted our Company. For Parimatch, CIS markets were the beginning of our company. When [the war] happened we stopped our franchisee deal with Russia, so we lost our Russian part of the business. Later on we canceled our franchise in Belarus, so we lost our Belarussian part of the business.

Definitely, it [also] impacted Ukrainian business a lot. And of course, our headquarters and the majority of the core team was located in the central part of the Kiev…right next to the President's House. So it’s 100 meters from Parliament…and it’s impacted people’s lives.

[For the] first probably one or two months, the focus of all top management and company was helping people move to safer places. We’re helping people actually move forward…to accept this situation because it happened. Somehow we need to continue our lives, our business.

Overall, I think as of now, we survived. We moved some people to our different offices across the globe… in Dubai, in Cyprus… in safe part[s] of Ukraine near [the] European border. But still, [a] big [number] of people [are] living in Kiev even now. We are trying to adopt to [these] new realities, which we don’t know when it will get over.

On how Parimatch is supporting Ukraine's war efforts:

We spent a lot of money…I think the last time I saw the number it was 70 million hryvnias - which is approximately two-and-a-half million dollars - to support the different needs of the government, of the army, of people who got into different situations [and] need medical treatments, food...I don’t know…helmets…and…lots of different things. So we were doing this for [the] first three months.

We were bringing different items from Europe to help our army…night vision things like drones and a lot of equipment. Historically our army was not that rich and powerful because we are actually [a] very peaceful nation and never thought that this could happen.

We, as a company, were feeling that we are not as helpful as soldiers - we can’t go actually and participate in the war - but from economical part [sic] there is a still a big influence we can give. We helped our army a lot and still continue to do this. We think that we have to do it and we don’t have any choice. So, right away, shareholders allocated some big budget and we started helping our country.

Question: Ever since its launch in the mid-1990s, Parimatch has gradually expanded its operations – first across the CIS region, then Europe, and now Asia. What drives PMI’s entry into new geographical markets?

[Today] we feel that in tier 1, tier 2 markets like the US, Australia, New Zealand [and] Europe there is no big room and no big opportunity to get into [these] markets and build it as a big business. There's big taxes, big competition, there are a lot of different regulations and becoming a big player there…it’s tough.

I joined the company back in 2019…and we decided to focus only on emerging markets...[i.e.] Asia, Africa and Latin America.

There is a big set of challenges in each of [these] regions, but there is [also] a big opportunity because the markets are very young and there is a big year-to-year growth [in these] markets. There is a penetration of mobile devices [and] of [the] internet.

There’s a big investigation that we [make] before actually choosing some markets….based on population, internet, mobile penetration, GDP per capita and other insights.

Question: In 2021, Parimatch entered India. How happy are you with PMI’s India journey so far?

I was doing business in India for five years before I joined Parimatch. I was living in Gurgaon and I think by that time I was already [learning] all [the] things we need to have in our business to adopt it for India.

India is different than other countries. But for us [it] was a surprise…that a lot of things that were done for Europe, for Ukraine, were accepted by Indians.

If we will divide Asia into a few parts like South-east Asia and Indian continent…then South-east Asia is completely different in terms of product acceptance, in terms of UI/UX that they want to see, in terms of games that they want to have, in terms of even in trading markets that they have…and India is more like European way of using the product. It was a surprise for us, so we didn’t do a lot of adoptions for our product for Indians across the globe.

Question: What are PMI’s business development goals for India?

Our goal in any region or continent that we operate in [is] we always want to build [our] brand.

Trust-to-brand is a big thing in betting, in gambling…in our industry because if you take 10 different companies across the globe doing sports betting, they are doing pretty much the same thing right? It’s just the matter of the touch and feel of the product, the trust that you will get paid…that nobody will cheat you.

I think this is actually our fuel inside the company that we always want to provide our customers with the best product and best experience.

[The] trust that we are building in any market we operate in is giving us results. For 25 years, we built some reputations and the main focus is actually to be honest and open with our customers and never try to somehow cheat them.

In [the] long-distance it’s better to keep customers with you for a long period of time rather than getting some big profit or revenue from a customer for a short period of time. Some competitors of ours [are] doing this but our goal is to build [a] long term relationship with our customers, and this is our biggest milestone.

What service are we providing, how long [are] people spending with us, what is the retention of customers, what is the monthly churn, what is the speed of interaction with our product, what odds are we providing, are these [the] best odds available in the market, [what] margin are we having because this is a very low margin industry…[these are] our main milestones.

Qustion: Coming to the iGaming industry, what market trends do you see – both globally and within India?

This is a very standard-tarised (sic) industry. So even though there are a large number of players globally, there are some particular trends in the iGaming industry.

First, if we’ll take this industry five years back, probably 70 percent of all bets of the customers were in the ‘pre-match’. Later on, as soon as mobile device penetration [began], we see in almost in all our regions significant growth of live bets. This is a significant change because previously, people were using computers to place the bet [but] now you can sit on your sofa, you can watch TV and additionally you are doing bets, right?

Another trend is casinos. I think five to seven years back, probably most companies [were] having not more than 20 percent share of casino...I mean live casinos, slots and different types of products. Now, in most parts of the world, it is moving to a proportion of 50-50. So casino is [a] more easy product to use because you don’t need to understand what is ‘bets’, how you will place, how it’s calculating. You can just go to the roulette and put some money to the red or black or a number.

I was visiting Goa, so there is [the] Big Daddy Casino in the river…there’s a ship. It was [a] Wednesday. There was a huge amount of people playing there with family….there is a kid’s room. I was in many casinos across the globe but I never saw [a] kid’s room inside [a] casino. They’re just leaving their kids there and they go and [are] having fun. This is [the] fun we are trying to give through [our] product…through their smartphones [and] their computers.

Also, I think there is a big trend of different kinds of instant games. This [is] probably something I see big potential [in the] next three to five years. Some very simple games that [people of] any nation like India [were playing since] their childhood. If you [are] providing them [a] similar experience [of a] very known-to-them game they were playing 20 years back, it attracts them and gives them additional fun.

Retail [betting] unfortunately or fortunately is dying because to place live bets, you have to sit in that retail [shop and] watch match there. But if you are spending time with your friends or with your family at home, you can’t place live bets in retail. So retail is dying, tech is growing and when tech is growing, there [are] big synergies with big tech companies like OTT.

There’s Smart TVs [where] you can watch cricket and you can bet right from your remote control…nothing stops you from doing that because your cart is probably connected there. So [these] kind of things definitely will happen…

I don’t think there will be some Web3.0 [innovation] in this industry because it is pretty much [a] traditional industry.

Question: What user preferences have you noticed among the Indian gaming community, especially during major leagues like IPL?

So of course [in India there’s a] big focus on cricket. [But] there are some other unique sports like kabaddi.

We were the first betting company in the world to provide the trading line for kabaddi. We were partnering with the Pro Kabaddi League in India because there is a big fan base for kabaddi in other Asian countries like Bangladesh and Sri Lanka.

How we support customers from Asian countries is different than European customers.

Indians, if they write in, they want [an] immediate answer. If they don’t get it, they will create five to seven tickets…and if there is a technical glitch [or] if we are in a situation when we are having some problems with our product…of course it’s millions of tickets in support.

We adopted our way [in terms of] how we are solving the issues for the Asian region. People want to get fast withdrawals [or] small withdrawals.

In some countries, we have some minimum withdrawal limits. In Asian countries we decrease it almost to zero so you can withdraw any amount…because some people want to deposit-play-withdraw.

For them, this is something that is creating trust. In this situation [our] company is usually having a loss, because we can’t make money on small numbers. We are making money only on big volumes because we have commissions for your deposit [and] for your withdrawal.

If you are playing, let’s say, for 100 rupees, we will definitely make a loss on this transaction. But in [the] long run, this is our acquisition channel because we are showing that we are the product you can trust.

Question: Parimatch was one of the sponsors in the recent India-England cricket series. What’s your thought process behind sponsoring big-ticket international sporting events?

Our thought process [is the same] everywhere across the globe.

Our customer is always [the] sports fan. We never target customers with the message that ‘you can get money’…you know ‘work-from-home money’ or ‘become a winner’.

We’re targeting mass audience of sports fans. For them, watching TV with their favorite team…and seeing Parimatch brand there…this is how we [are] actually creating the trust of this customer. He can associate our brand with his favorite team…and understanding that this company probably is not a fraud because they [are] having enough scale and amount of money to sponsor this kind of team.

For us, being a sponsor in different levels of sport, of different sports, is [the] main marketing strategy we’re following almost in all countries of the world.

Even the Parimatch Foundation that we have in many countries and we are now starting this process in India as well…we are helping kids with sports. We are allocating money from this Foundation to schools [and] stadiums to buy equipment.

[The Foundation money is also used] to pay salaries to sports teachers because we think that sport is a way of getting kids busy, showing them how you can get some results, how you can train your body, how later on they will understand how they can train their brain and achieve some results.

Question: India is probably unique in a sense, because a single sport (i.e. cricket) is so dominant compared to other sports. In this context, Parimatch stands out for its sponsorship of football teams in the Indian Super League like Kerala Blasters and NorthEast United FC. Please elaborate on your Company’s strategic objectives in non-cricket sports in India.

Every time we go to any market we discover which sports are popular in this market.

India is a cricket-first country. [But] if you will look at the population of Asia, of India…it’s billions of people. So if we are talking about any sport, it can be ice hockey, tennis, MMA, volleyball or badminton…there is a big audience that still watches this sport (sic). So imagine that the amount of people who are fans of badminton in India, is actually [equal to the] whole population of Ukraine.

When we are doing any marketing activity or sponsoring any kind of team or tournament, we always measure the coverage of this tournament, amount of viewership, amount of people who [are] actually watching this sport, the cost per view we are receiving, the cost per coverage of the viewer…and then we make a decision.

Definitely in any country and any region we operate in, we are trying to diversify our business and we don’t want to be associated with, let’s say football only or cricket only.

We want to have as much fan base and players’ base divided into different segments because sometimes you can acquire [a] customer who is [a] fan of let’s say volleyball, but still he will be [a] fan of cricket. But his acquisition in the channel of volleyball will be much cheaper than getting him into cricket.

So I think when we are entering any market, we are covering the big part of the audience, the masses of fans, and then step by step we are going deeper, and going [into] more niche sports as well.

Qustion: In Ukraine, Parimatch became the first company to receive an official betting license. In a country like India where gambling is still to be uniformly legalized, how is Parimatch navigating around the regulatory hurdles?

Wish that Parimatch could navigate the regulatory space of India, but I think the regulatory space of India is navigating everybody!

You are rightly saying that regulation of iGaming, of gambling, is a matter of State…and probably you are probably aware that there are three states in India that have local licenses.

As soon as a big state starts regulating gambling like Maharashtra let’s say, then the speed of acceptance of these kinds of licenses and activities will be much faster. But for sure there will be some States [that] will never be regulated.

From our experience that we see globally, everything is moving towards regulation, and regulation is [a] win-win for both parties. For [a] player, it’s safeness.

Most of Africa is regulated. In any country in Africa, you can go and get a license there, pay taxes…there is a Gaming Board. If you are a player and place a bet for 100 dollars and [the] betting company is not paying out if you win, you can always drop a line to [the] Gaming Board. The next day, the company will have problems and there will be investigations started.

From the side of operator...this is [a] transparent and long term business that you are building. So we are definitely participating in different roundtables across regulations. We have different representative lawyers in India and in different countries…and our position is that regulations should happen, and this is, I think, a matter of time.

In India, you know that it’s not [a] very fast decision-making country. There are a lot of problems apart from gambling that have to be solved. If you put the priorities then the regulation of gambling will definitely be very low.

On the high GST rates in India

I think the biggest problem with regulation when it will be available in the market will be with the GST. GST is probably the biggest pain in any industry that you can imagine in India.

When regulation happens, it should be [after discussions] with the companies who will be present in this market. [At] the end of the day, any betting company is getting to the market to get some revenue and profit, right? If it’s not possible to make any revenue…then who will be working with the license and go into this market?

If a Tier 1 market in the world like the US is having regulations, if the UK, almost all Europe, all Africa is regulated, then I don’t think nothing (sic) stops Asia from getting closer to this and also having a proper transparent regulatory system. Yes, it will be based state-by-state, but I am sure that in the next three to five years it will definitely happen. Not too fast, but it will happen.

Question: You mentioned GST, which is making the news in India right now, with a proposed 28 percent GST being levied across gaming. According to you, what would be the ideal tax rate for the online sports betting industry?

We have our revenue, we call it ‘GGR’…Gross Gaming Revenue. That's our margin from the whole turnover. From our experience, if this tax from GGR is higher than 20 percent you can’t make business in this country. (In Africa, we are paying 15 percent.)

After that, you have all your expenses, marketing, employees, operational expenses, and then out of your bottomline, your EBITDA, you are paying some profit tax. So our margin is very less… it’s less than five percent. So paying some additional taxes from turnover, or from deposits, or paying some GST is just not possible to work.

Question: When it comes to legalizing gaming or betting in India, the classic counter-argument, of course, is that it is addictive. We have also seen news reports in India about how families go into debt and some individuals even end their lives. What are the steps Parimatch is taking to be a responsible betting platform and ensure that users aren’t adversely affected?

This is [a] very good political or media position to talk about the addictiveness of gambling. But it’s a big discussion. There [are] a lot of things that we can say [are] impacting people’s lives.

Everyone is addicted to something, right? Somebody is addicted to alcohol, somebody is addicted to smoking, somebody is addicted to fast food, somebody is addicted [to] driving fast and losing their lives. So this is something that is a matter of big discussion.

Talking about gambling, any big gambling global company like Parimatch [or] our big global competitors, [we are] having responsible gaming and we never focus on acquiring or continuing our relationship with addictive players.

We do have special systems in place…special reporting, and if we see that person is addictive and he’s actually playing just to spend money or just to win money, he’s getting rejected in-game. In licensed markets, it’s required by law, so there is a special procedure that you need to [follow] in the UK. Not only do you need to decline him in, let’s say, refill his account or play, you need to inform some special agency that will contact him. Then he will have a session with [a] psychologist to get this addictiveness out.

If you are taking more than one million players of Parimatch across the globe, the average spend of the customer is usually no more than $30-50 a month. So we’re talking about [a] very small percentage of people who [we] are calling ‘gamblers’ that are addictive.

For us, it’s always good to have the usual fans of the sport. So our main audience [is] people who are having fun.

You need to work more with education…you need to fight the betting companies that [are] saying that ‘this is easy money’, ‘this is guaranteed money’. Inside your product, you need to educate that ‘this is [just a] game’…and then there will be no problems like this. But addictive people will find addictiveness in anything, unfortunately, and then there are special institutions that help them to get out from that.

Question: You became an entrepreneur at the age of 18. What advice would you give to young Indian entrepreneurs, especially those looking to start a business in the sports industry?

The success of any business is based on two things. The first is trust. You need to trust in something that you are doing. To trust in something that you are doing, you need to have some arguments as to why you are trusting this. Right?

Second is…[it’s] a lot of work so you need to have a lot of patience, a lot of enthusiasm to do your business, your project…to build your product.

Sometimes there will be failures, sometimes there will be wins, but you need to trust in something that you are doing. Don’t listen to anybody who is telling you ‘this is wrong’, ‘you will never make success’, because nobody knows.

In [the] same industry somebody can be successful, somebody cannot be successful…but from my experience you can only be successful if you trust the business that you are doing. And of course, [it’s] a lot of work. So I don’t trust all [these] ‘success about success’ articles that ‘just do this and you will become a billionaire.’

You need to trust in your business and work a lot and this will, with high chances, bring you success.