Parimatch CEO on Ukrainian legislation and the 1xBet fiasco
Sergey Portnov chats to EGR Intel about lobbying regulators and finding the right blend of youth and experience
As the Ukrainian government debates a draft regulatory bill on online gambling for the very first time, EGR Intel caught up with one of the biggest operators in the CIS region to get some thoughts on the market – among other things.
In a typically outspoken interview, Parimatch CEO Sergey Portnov reveals plans to launch the brand in India and Brazil and shares his views on 1xBet’s white-label suspension in the UK.
Parimatch CEO Sergey Portnov
EGR Intel: Is Ukraine looking to regulate a big deal for Parimatch?
Sergey Portnov (SP): It’s a huge, huge step. This has been 10 years in waiting so we are hoping that it will materialise. We would be a fully-regulated business and one of the biggest operators in the CIS region and number one by a mile in Ukraine. The regulation is comprehensive and would cover online casino, betting and poker. From what we know, sports will be a 7.5% tax on GGR, casino will be 12.5% and poker will be a fixed fee. There will be restrictions on retail because the government does not want a betting shop on every single corner or for it to become like a convenience store.
EGR Intel: Which operators do you think will enter the market?
SP: The regulation looks good enough for everyone to try and enter. All the Russian and Kazakhstani operators will try but for foreign operators, I would expect PokerStars and bwin/PartyPoker and then bet365 might come two years later once everything has been established.
EGR Intel: Are you in talks with the regulators?
SP: We are deep in the process. We want to inform the regulation, so it becomes legitimate and isn’t some bullshit to scare everyone off. Some guy might add a zero or a comma or change the wording of one little phrase and it will kill it, so you have to be very careful. The new Ukrainian government is proposing a very liberal approach which we support.
EGR Intel: Which markets outside of Ukraine are you looking to enter?
SP: India and Brazil. Territories that have already emerged and are mature but are emerging in terms of legislation. Entering into mature and regulated markets means all you do is spend money on corporate lawyers, KYC and compliance. If you want real cash and real profits you have to enter more unpredictable regions. That is the battle for us – India, Brazil and Africa.
EGR Intel: One of your biggest competitors is 1xBet. Was it a mistake for them to launch in the UK?
SP: I think it was a necessary mistake. They took a risky shot and they almost pulled it off. It didn’t go according to plan, but they will learn from the experience. Some people will say it was stupid, but I think they were utterly brave and crazy. They were close to saving those sponsorship deals, and they are still with Barcelona. I prefer their approach to operators looking to please the stock exchange, investors and the board, but admittedly it is two very different strategies.
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EGR Intel: I guess you haven’t changed your mind on entering the UK market?
SP: It is one of the worst markets to enter. Maybe it is the best for the market leader, but it is the very worst for new entrants.