In the exclusive interview with LoginCasino.com, Pari-Match CEO Sergey Portnov shared his expectations for the possible legalization of gambling in Ukraine.
- In the context of a forthcoming Ukrainian Gaming Congress, tell us how interesting is Ukrainian and Western European market for you, and what could be considered its key advantages.
- As a matter of fact, twenty years ago we started in Ukraine, that’s why whis market for us is top priority, and it’s very promising. So, taking into account the possible legalization process, we aim for the top positions. The country is currently in the state of an extended crisis, but everything will change in a few years, and I think that Ukraine will become a second market following Russia.
- What will Pari-Match present at the Congress?
- The main goal of Pari-Match at the Congress is to become an active participant of the discussion regarding the topic of legalization of Ukrainian bookmaking. We want to explain to public and government that legalization of bookmaking is necessary, and the country will only benefit from creating a legal field for gambling business.
- Gambling, which has been more of a shady business and in a more or less sustainable state in Ukraine up until the mid-2000’s, was banned at all, but now the government literally wants to drag it out of the shacks and revive it, imposing the relevant regulation. How important is this, in particular, for the bookies?
- Nobody wants to work on sufferance. Shady business is unpredictable, it can’t be regulated. Any self-respecting company wants to operate in stable predictable conditions, which Ukraine currently lacks. That’s why we make efforts to create such conditions, taking into account the interests of bookmakers, and not only of the state.
- Will gambling legalization simplify the process for core businesses and open additional possibilities? Or it won’t have any serious effects and reforms?
- One shouldn’t look for rapid changes from the beginning, because the market isn’t reacting at such quick pace. There’s a crisis in Ukraine, so all segments has slowed down their development and are now in the standby mode. But, sure, issuance of legislation in our sector will give a boost to operators willing to enter the market, but they won’t shape it radically from scratch and invest enormous funds. This will come in time, in harmony with the common prosperity of the country and rehabilitation from the latest events.
- Future Law of Ukraine on legalization of gambling will separately specify a paragraph ‘online’, to regulate gambling industry online. Have you encountered such laws? What kind of key mistakes can the government make in the process of drafting these laws?
- All European market is more or less regulated in terms of online and offline. Belarus also has great regulation, where online segment is permitted, in addition to rational tax percentage. I.e., online regulation is not new for bookmakers. If they create legislation only for offline, it would leave online in the shadow completely.
The key mistake from the government would be the situation in which it won’t take into account the market environment and start inventing a wheel again. This would lead business further in the shadow, because nothing new should be invented in this law – at least 50 leading countries have made it for us. Just choose the best one, some kind of hybrid model with regard to Ukrainian mentality. It’d be unacceptable if they start introduce taxes from other segments (tobacco, alcohol) in betting and gambling business as a whole. There’re concerns that people who don’t understand how the industry works will be trying to impose their tax models. That is the biggest risk here.
- What would you call a rational taxation policy for gambling, allowing the country not only to earn profit, but nurture businessmen?
- I think that 100,000 dollars a year would be an acceptable fixed payment for license. And 5-10 per cent tax on the income.
- Betting exchange is an alternative to the betting shop. What is a fundamental difference and what can bring more income?
- Betting exchange today is a synonym for Betfair. Such associations come into mind when you hear this term. Betfair is a British company, which created its first exchange in 1999. But this product has limitations in the context of implementing its potential, and such exchanges are not for all players. There’s a limit on bets functionality: one can’t make express bets. It wasn’t for nothing that Betfair has opened a betting shop within the limits of its exchange. They understand that conventional betting shop has its specific features and differences, it’s easier and more simple for players. Ultimately, Betfair has united the things that shouldn’t have been united – betting shop and exchange on one website. And some sources claim that it has plans now to merge with Paddy Power.
The difference between a betting shop and betting exchange is that players, not bookies provide their odds on the exchange. This market is liquid, they took their niche, but they won’t ever make it over the top or become monopolists on the market. Yes, they’d have to eat their piece of the pie and be satisfied.
- Bookmakers nowadays are most associated with football, most popular kind of sports in the world. Does this correspond with the trends dominating inside the industry and is football really the most profitable and interesting sport?
- The reason for football success is that it’s being broadcasted almost everywhere in our countries. It’s also the principal kind of sports for Europe. And any source of mass media – TV, news portal – will first and foremost highlight football. It’s deeply penetrated into our mentality, this is sport number one socially. This is the fixed standard. Bookies just follow this trend. In reality, bookmakers play a vital role in development of other sports as well. Thanks to live bets, today there’s a lot of attention to basketball, handball, volley-ball. Previously, few people were interested in what kind of teams were there and what rules did they play by. Today, football is only 20% of all live bets. Even less, than basketball. I.e., football is on equal terms with basketball, volley-ball, handball. For new players, football will always be the number-one-sport. But for professional punters, football is just one of the equally understood sports – hockey, basketball, tennis.
- Corruption in football is a sore point in this sport and among its investors. During the last year, not only in Ukraine, but almost in all Western European countries, there have regularly been dramas, fixed games etc. How do bookmakers react to such situations? Can one avoid and secure oneself from such situations? As even the user not experienced in betting understands that scams are trying to cheat on the service.
- Fixed games are a big problem. One can write a book on that. On the one hand, bookmakers are developing sports, but on the other hand, they tempt people to manipulate the results, when they have access to players. Looking on the bets pattern, one can become pretty sure if the player is betting on fixed games. 9 times out of 10 we make the right projection. In such cases, we even don’t return their money back, just pay out the bet, and close the account. But the user opens up an account again, for example, for his wife or friends. It’s hard to handle them. Meanwhile, we haven’t invented powerful tools for preventing the game on suspicious matches. It’s impossible to secure oneself. Because its sports, many sportsmen are involved, hundreds of thousands. FIFA is fighting this, the whole world is fighting this, and we also tackle this.
- How do you see a path of gambling development for bookmakers in Ukraine throughout next 10 years?
- Let’s not race into the distant future. But I think that in 10 years, Ukraine will see the same situation, as in England. Cash is almost absent there, everything is done through cards, via the Internet. This social system in Britain is well structured in all aspects: banking, gambling etc. – everything is perfect. When we reach that, lots of things will change, for example service will become better. Meanwhile, CIS countries are long way from scenarios taking place in the West: In England, 8 out of 10 people have web coverage, in Ukraine – 1 out of 3 have access to Internet, it’s about 30 per cent of population.
Bookmakers can develop this market, if they won’t be disturbed. Government often creates many limitations paralyzing the market. The simplest method is to ban, and not regulate. But if the mutually beneficial conditions would be created, Ukrainian market could see a rapid progress. Ukraine has a large potential in this betting business.
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