Regulate betting; banning it helps no one: Parimatch

While India’s gambling laws do not allow sports betting companies or betting sites to operate within the country, there is no such law for companies outside India. In the absence of clear regulations or central laws, many offshore betting sites, which obtain licences from Curacao, Malta, and the Virgin Islands, have been offering services in India. But now, with the Union Information and Broadcasting ministry banning advertisements for such entities, business is seeing slower growth. Mint caught up with Anton Rublievskyi, CEO of Parimatch International, one of the largest betting companies offering services in India, and had advertised its sister site, Parimatch News, till the government diktat. In a no holds barred interview, Rublievskyi spoke about the lobbying by a large fantasy player, the need for proper regulation and the cost of prohibition for gaming and betting companies. Edited excerpts:

Betting and gambling are not allowed in India, and the government has placed a ban on all ads by betting firms. Has it affected your business in India?

First of all, India is a huge market for betting and gambling, and remains highly unorganized and underground. Estimates peg this market between $50 billion and $100 billion annually. Now compare it with bookmakers like us, who have global licences and are offering services in the Asian market. Between all the offshore online bookmakers, we do monthly deposits worth $1 billion from India alone.

We had launched in Asia at the end of 2019, just before covid, which accelerated online business. And while lakhs of players have started using our online platform, still there are a lot of people, who prefer placing bets in the black market via phone and messaging services. This black market has been there for 30-40 years. If you visit any paan shop in Delhi, Mumbai, Bangalore or other cities, and say you want to place bets, you will find an agent right away.

In such a market, removing our ads from TV or other marketing channels will of course hurt, considering that for any company, to advertise on TV, and sponsorships is a very fast way to reach millions of people. But at the same time, it will not significantly change the industry, as every bookmaker will find ways to reach their customer base.

So, are you of the view that gambling should be allowed in India?

Look at some of the most developed countries in the world, the US, Canada, the UK and Australia, all are tier I markets, and all allow betting, and all have proper regulations in place. It is a big source of revenue for the governments, the rules are open and understandable for everybody so that the players are protected. Betting companies pay taxes and nobody’s hiding anything.

If you talk about India, I think everyone is aware of what is happening here. There is one big lobby against gambling companies, run by a big fantasy sports operator, which is trying to get the rules in its favour.

Parimatch operates across 15 markets, and I have explored 30 to 40 markets myself. In my opinion, the government cannot prohibit gambling and betting. The more you try to prohibit, more people will gravitate towards the black market, which is bad for any company as well as customers. Instead, if you bring in a central law, and put proper regulations in place, it’s a win-win for both the players as well as the platforms, and the government can earn revenue. Unfortunately, as of now in India, they are doing it in the absolutely opposite way. There is no regulation, and now they are trying to prohibit the market. Look at alcohol, India consumes a huge amount of alcohol. There are states where alcohol is prohibited, but you will see huge lines outside the liquor shops in bordering states.

The Centre is concerned about the well-being of the people, as betting can be addictive and is likely to cause players to lose objectivity...

If people like to watch cricket or any other sport and bet on their favourite teams, it’s their choice. I don’t think the government is doing the right thing by prohibiting something, more so as it is a democracy. People must always have a choice. I am not saying there should not be regulations. Regulate it, give me instructions, and we will do everything to promote responsible gaming. There are huge amount of sports fans in India —cricket, football, mixed martial arts, tennis and basketball fans. You take a cohort, and there are millions of fans. When you are watching, versus when you are betting on the game, it’s not about money, but entertainment.

Responsible gaming is a very important part of our business. We are continuously updating our system to identify patterns of players and monitor if they get addicted. There are ways of exclusion, where we can stop giving them access to our platform. As and when we identify addicted players, we send them some learning material and if the behaviour continues, we stop offering services. They are allowed to withdraw all funds and we do not accept new deposits. Sometimes, if a player is too addicted, they may join other platforms or create fake accounts or accounts, but this is less than even 0.3% for us.

It depends on the market, but it’s not a big percentage. Moreover, for any bookmaker, it is important to keep such behaviour in check as addicted players are not good for their reputation. They don’t understand the limits sometimes, they lose money and don’t know when to stop. Ultimately, they start putting blame on the platform. They start writing negative reviews, hate comments, etc on the internet.

Having said that, India identifies poker as a game of skill, right? But the amount of addicted people in poker is much higher.

Even in a game of skills there has been a debate going on and many real-money gaming apps or services are banned in a few states.

Exactly, even for these games of skill, companies are facing a lot of new issues from states. Moreover, high taxation is also pushing this industry offshore. Today, it’s an online world, which is much more open. There are no borders. If I’m a poker player and I have to pay 28% of my winning, what stops me from going to pokerstars.com or other international platforms? I can deposit money there and I can play there. Now, is it good for India to lose this flow of money? Of course not. It’s better to keep it inside the country and create proper regulations for that.

I think that if you’re prohibiting advertisements, and trying to block the domain, it’s like the dry law. And we all know what happens in the case of dry law — the cost of alcohol increases, and the people who are addicted, want to drink more.

So, from our experience, it will not do anything good to the country, it will not protect the players, it will just push them outside of India, and they will play on the website with a different country. You can’t block applications or online domains, you block one domain, there will be 100 new domains.

So how much are you spending on advertising and promotions in India?

It’s important for us to have a strong brand, a strong product, and a strong support system - the three things that you need to be successful in the market. I can’t go in specifics, but we have budgets of millions of dollars for the region. We’re sponsoring some cricketers for Asian markets, some football teams, and some cricket teams in new T20 leagues. This is a part of our marketing strategy to support our brand. We also use influencers here. But this is just one part of the marketing budget, which was TV, out-of-home, radio, etc. There is another part, which is equally big, and that is performance marketing.

But now you are not allowed to do advertising on TV or digital platforms. Are you stopping performance marketing too?

We are not doing a lot of performance marketing by ourselves. It is done by affiliates and different affiliates are doing this in different channels. Yes, some channels are difficult to get into with regulations, but we aren’t going to either Google or Facebook or YouTube directly. The affiliates are doing this indirectly and we are paying them on the basis of conversions or what they call in performance marketing, cost per action. In our case, the action is -- deposits on the website. They (the affiliates) can do this via whatever channels they have access to, they can find players’ databases from their own sources.

Sometimes the affiliates acquire a database of some sports fans, say people who are interested in cricket. Often they do some kind of marketing activity and with some retention with them. And they give them access to gaming sites.

With new diktats, is there any impact on the business?

I think every global operator like us, who was providing services based on Curacao licensing service, or license from Malta, or the Virgin Islands, is facing problems with local payment solutions providers now as the service providers are facing issues with the government. Because of this, the customer is not able to deposit or withdraw money. The customers are losing the most. But as I said, the market will adopt.

What I can tell you is that we’re trying to have a dialogue with different states and central governments regarding the situation. Because we really think that any kind of prohibition of any service is bad. It’s much better to sit and agree, yes, there is a lot of negative PR about betting companies, but it’s not true.

Also, if you look at our average ticket size, it’s not that big. You’re sitting in Starbucks, I think that your spending there for a coffee and a snack is probably 3-4 times more than the average player is spending in India, Bangladesh, or in Africa.

We have more than 2 million players across the globe and yes Europeans can spend 200-500 euros per month, but in countries like Nigeria, Tanzania, Bangladesh, or India, the average ticket size is much less than $100. Sometimes even less than $20. India’s average is not more than $50.