Alexey Khobot: The early years in Russia and evolution of Fonbet

Having delved into the evolution of odds calculations, the use of bots in bookmaking and the history of live streaming in Russia, Alexey Khobot – the brains behind the first software for Fonbet – is back for more on the company’s inception in 1994, what the betting market looked like 26 years ago, and laying the groundwork for success.

Fonbet was founded by Anatoly Machulsky, a chess grandmaster with an analytical mind. A man who loved betting on sports events spotted an opportunity across the border.

“As soon as Irish ‘Plus-Minus and CASHMANS’ franchise opened in Ukraine, Matchulsky realised there was a similar opportunity for Russia,” said Alexey Khobot. 

“The idea of starting a company that accepted sports bets with fixed odds appealed to him as he could use pure mathematics, probability theory and sports analytics to develop odds for events that were both attractive for customers and profitable for the owners. Fonbet’s whole reputation comes from Machulsky. It passed on to the next generations as well.” 

The mantra for Matchulsky’s leadership of the company was the following: “We carry out everything we promised. Do not chase after instant profit. Be honest today, and you will be rewarded tomorrow.”

However, his relative lack of experience in starting and running a business led him to seek out a business partner who would allow him to focus exclusively on bookmaking.

“Common acquaintances introduced him to Vadim Sidorov, who was launching and helping businesses in related fields to grow,” Alexey Khobot explained. “After Fonbet was founded, Sidorov focused on all the administrative, legal and accounting issues, while Machulsky had complete control over bookmaking with no interference from Sidorov. Sidorov received a fixed salary for his services, which grew as the network of betting shops increased.”

Establishing a reputable business was a key concern for both Machulsky and Sidorov, said Alexey Khobot, who believes that by the end of the 1990’s – a time where banks were closing with no option for people to recoup savings – depositing and maintaining a balance with Fonbet was considered more reliable, particularly in comparison with its competitors. 

He recalled: “What choice did we have? We could not just not pay out. We did not even consider it. Tell someone we were not going to pay them? That would have been absurd. Some of the other companies would not pay out if there was big money involved. But now betting companies are big business, and nobody cheats anybody anymore.” 

One factor that underpinned the early Fonbet success was its extensive in-play choice of odds, and the fact that it figured out how best to display everything on a single browser page so the information could update in real time without freezing.

He shared: “Nobody could do that; you had to choose individual championships even with the overseas betting companies. Otherwise all the websites crashed. This is what made F.O.N. into a brand. Now the brand ‘feeds’ the company.”

Vindication of this brand value came through potential suitors for buying the company back in the 1990’s. Asked whether a mooted deal with Rambler – for a reported million dollars – could actually have taken place, Alexey Khobot replied: “Who knows? If someone is interested in acquiring the company, then the business is worth something. 

“And no one ever gives up such thoughts (of selling), but before the market was empty and now it is strictly divided among the bookmakers.”

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