Paruyr Shahbazyan makes money based on the amount of traffic that he drives to online sports betting operators. He and his company, Bookmaker Ratings, are appropriately classified as being a part of the affiliate marketing industry, which is expected to grow to $6.8 billion by 2020.
It is easy to scoff at an online affiliate marketer, but entrepreneurs like Shahbazyan are earning considerable amounts of money by generating leads for third parties. Bookmaker Ratings generates revenue through revenue share agreements (25-40% lifetime commissions on net gaming revenues generated by referrals), fixed costs from depositing players and pay per click.
From the aforesaid revenue streams alone, Shahbazyan expects $2 million in U.S. dollars by the end of the year, with costs of $700,000 to operate his business.
Shahbazyan fashions himself as a true entrepreneur in the sports betting industry. His website is one of the largest sports betting-related sites and he believes that his site, which operates out of Russia, is successful mainly due to the fact that people in Russia do not tend to trust bookmakers.
"We earn bettors' trust by doing two main things: firstly, we help them to solve any bookmaker related issues that may arise and, secondly, we provide unbiased bookmaker ratings," explains Shahbazyan. "In Russia, it's hard to find a bettor (that bets regularly) who isn't aware of us."
Bookmaker Ratings also currently operates in the United Kingdom, Ukraine and Armenia. Shahbazyan hopes to expand to additional European countries as well as China in the near future.
Shahbazyan is aware that his operation may be faced with legal scrutiny if it advertised and/or was based in the United States. As such, he is benefited by existing within Russia. However, even in Russia, Shahbazyan finds himself dealing with a plethora of legal hurdles.
"Right now there are more disadvantages than advantages," says Shahbazyan. "Regulations have become very tight. In July, Russian censoring authorities blocked our site from linking to offshore bookmakers. We were told that we are only allowed to link to sites that have a Russian license. While there are many Russian licensed offline bookmakers, there are only four bookmakers who, at that time, were legally accepting online bets."
Additionally, online betting ads are currently banned, according to Shahbazyan. He claims that he is able to work around the prohibition based on being classified as a review site, and thus does not fall under the bookmaker advertising ban.
"Although even if we did, the fine is not significant," says Shahbazyan. That mentality seems to mirror the mindset of many entrepreneurs, which is to do your best to operate above board, but sometimes the risk of a slap on the risk is worth the reward.
Shahbazyan is proof that an affiliate marketing business has the potential to net over $1 million per year. His concept has worked in the sports betting industry, where his biggest competitors are topbukmeker.ru, overbetting.net, sports.ru and championat.com, with the first two sites being gambling-related like Bookmaker Ratings, while the other two focus on sports in general, although they do heavily advertise bookmakers.