Fortune Affiliates Retroactive Terms

[dominique]

I quote from their forum at CAP, and this is also what I was told in conversations with David and Anrit:

Fortune Affiliates is making this change because we have to not because we want to. We would love to offer Affiliates even more than we have previously but that would not be viable. The reality is that for quite sometime now Fortune Affiliates has been operating in very bad economic territory. We realized that this was due to our formula not reflecting rising costs in the industry and our expenses. So we are changing the formula to try and create a sustainable economic model (which is in Affiliates’ best interests).

Since this is a change out of necessity we need to look at the economic realities of each scenario. It would be great to apply this only to new players moving forward but that would not address the bulk of the profitability issues we are having. Since most earnings are paid on existing players this is where the change needs to occur. A change to new players only would just not be enough to make this a sustainable business.


We are hurting at Fortune Affiliates but unfortunately it is not only from last month. This has been hurting us for many months already and is not dependant on client performance but rather a formula that leaves us with almost nothing at the end. If this was a 1 month case we would not have changed the formula yet, but the reality is we changed the formula to create a sustainable business.

[Simmo!]

Originally Posted by casinomeister

It's viewable by God and everyone else, nothing is hidden from anyone, just we happy few are posting here. But if you really feel I should move it back, then I'll do it. If a few more of you feel this way, then fine.

Up to you CM. But my view is that there is a moral issue here also. Should affiliates be telling players that they can trust a company to honour an agreement where the affiliate has proof to the contrary?

[dominique]

By the way, I am not really blaming Fortune Affiliates for this. From what I deduce from the above statement by Fortune Affiliates, they are getting the shaft from FL.

This is what makes me think so:

This has been hurting us for many months already and is not dependant on client performance but rather a formula that leaves us with almost nothing at the end. If this was a 1 month case we would not have changed the formula yet, but the reality is we changed the formula to create a sustainable business.

A formula that leaves them with almost nothing in the end. So it was either FL allowing more marketing funds, or FA breaching contract with affiliates.

I understand FA was between a rock and a hard place. It is FL who is ultimately responsible for this mess.

And that is why players have a right to know. Did FL cause this because they are also in financial trouble? I don't think so really, but it certainly is possible.

Otherwise they just could care less about sticking by their contracts. Because they can get away with it. And so can all other online gambling businesses - the precedent has been set.

Sit back, do nothing and watch the avalanche. It has already started - Vegas Partners, Partnerlogic and Wager Junction have also breached contract.

[Webzcas]

It's viewable by God and everyone else, nothing is hidden from anyone, just we happy few are posting here. But if you really feel I should move it back, then I'll do it. If a few more of you feel this way, then fine.

It's your forum Bryan so it's your call. But, this forum is very popular and it would be interesting to get some feedback from players as well as affiliates, as this does concern them, maybe not directly, but along the chain it does. If Fortune Affiliates can change their T & C's without dialogue, if this goes unchallenged, what is to stop them doing the same again in the future? Furthermore, if they can treat their partners like this, who is to say down the line they won't do the same to their customers the players.

[spearmaster]

What Dom said is correct.

They said "financial trouble" - repeatedly, to boot. Obviously very well-rehearsed.

As for contacting a "few" affiliates - they did not make a contract with a "few" affiliates, they made a contract with each and every individual affiliate.

They 500% said "financial trouble".

Casinomeister, you have now been exposed to the BS arguments by both parties - you have heard exactly the same shit I have heard for a month, and you are now being snowballed by these programs even though you are not an affiliate.

In short - you are now no longer a partner as far as they are concerned, because they have to present the same arguments to you without acknowledging the fact that they:

* Breached their agreement with affiliates
* Are NOT in financial trouble
* Are NOT in partnership with affiliates

This is a well-rehearsed sham that you are now being exposed to.

[greedygirl]

I realize I'm setting myself up for a beating, here, but I'd like to ask a few questions...

After a discussion with FA, it is my understanding that the changes being implemented are being done so because the FA program is unable to acheive profitability. With this in mind, I'd like to make some points, as well as ask some questions. I am by no means taking sides on the issues, so please don't jump to conclusions as to my views on the overall situation.

What I have been reading within this thread (as well as similar threads on other sites) is quite a bit of innuendo that FL is in financial trouble. I'd like to understand how the fact that the FA program (in its old terms) is not profitable equates to financial troubles? It is my understanding that as a result of a poorly-written earlier FA agreement, FA is not profitable and if continued, FA would suffer losses. There is a HUGE difference between the affiliate program suffering losses as opposed to FL being in financial distress. To insinuate this to players is grossly unfair, IMO.

Now, remembering I am not taking sides on this matter, I would like to ask of those most vocal, if they were in the shoes of FA, knowing that the old agreement would most certainly create losses for the company, what you feel would be the best remedy? I'd like to further assert that the old agreement is just that...old. Times have changed and while affiliates continue to enjoy the higher commissions, the situation has changed for FA/FL. Higher costs all the way around are involved, yet affiliates have not (until now) been asked to bear the burden of these costs (gawd, I know I'm stepping on shaky ground with this comment). So again, I'd just like to know how could FA do things in a way that would ensure solvency for the program, yet keep affiliates happy? Clearly it is the old players in question which have the damaging effect on the bottom line. I don't have the answers, but I'm wondering if any of you would.

In the meantime, I would truly like to stress the point that IMO it is absolutely unfair to mislead players into the belief that FL is in financial trouble and that the players can possibly be affected in any way. There is simply no evidence of this (outside of a bit of word-twisting) and I believe it is just this side of slander to make such an assertion.

[Casinomeister]

Originally Posted by spearmaster

Casinomeister, you have now been exposed to the BS arguments by both parties - you have heard exactly the same shit I have heard for a month, and you are now being snowballed by these programs even though you are not an affiliate..

You mean people are BSing me?

Originally Posted by spearmaster

In short - you are now no longer a partner as far as they are concerned, because they have to present the same arguments to you without acknowledging the fact that they:

* Breached their agreement with affiliates
* Are NOT in financial trouble
* Are NOT in partnership with affiliates

This is a well-rehearsed sham that you are now being exposed to..

Eh? I may have lost you there. From what I've read and heard, it seems to me that FA's business model was short sighted and needed to be overhauled. Is it a sham, or a way of restructuring one's business?

As I mentioned earlier to Webcaz, it's a dynamic industry and it should be expected that companies change policies or modify them to ensure that they remain profitable and/or competitive. With this FA situation, I still see this as a change in reporting - and yeah, it sucks for some - but what else is FA supposed to do?

In an ideal situation, it would have been nice to see FA sit down and discus options with their affiliates. But with the environment of the Internet - perhaps this wasn't plausible. I am unsure what type of consultation they dealt with concerning this situation.

Originally Posted by greedygirl

Now, remembering I am not taking sides on this matter, I would like to ask of those most vocal, if they were in the shoes of FA, knowing that the old agreement would most certainly create losses for the company, what you feel would be the best remedy?

I hear Debbee on this one. I wish I would see more constructive criticism. This is a situation that no one has really offered any solution for. Most of you guys (and gals) know this business, know webmastering, and are problem solvers. So far, unless I missed it, I haven't seen any remedies offered. Faced with FA's problems, what would you have differently.

This works only if you don't think they are BSing everyone

I don't want to get into semantics on contracts or retroactivity or breaching this or that. But let's say webmaster X sells ad space to casinos. Casino Y has been on webmaster X's site for a number of years, but over time the webmaster's expenses increase forcing him to re-look at how he's financing the site. He decides to increase rates for all new casinos coming on board and applies this to the older ones too. Wouldn't this sort of be the same situation that your in (as the casino)? Here you have to pay out 20% more for the same adspace. That sucks, but in a dynamic business environment, these things should be expected.

For casino Y, was this a breach of contract or modifying a business model? What would have been fair? Not increasing casino Y's rates? That would have been unrealistic. And of course, Casino Y has the option of bailing out or biting the bullet an pay the increased rates hoping for the best. I

Isn't your situation the same sort of thing? The Aff program has introduced new terms - nothing is breached - just changed.

FA - question: Did you have your legal team look over this change before it was implemented? If so, what is their take on contractual agreements?

Finally, I understand how some of you are upset about this, but you may be making this out to be bigger than it is (OK look-out ~b). Dom mentioned that this may be the biggest thing ever to rock this industry - wasn't the biggest thing to rock it 9/11 and the US reaction? Or the loss of Paypal? Or scumware?! I'm just not convinced that it's as bad as your making it out to be (quick - duck!).

But it looks as though many of you are convinced it is.

endnote: I'm not siding with FA - I'm trying to review this situation as objectively as possible. Please don't confuse objectivity with endorsement or to concur.

[Webzcas]

Originally Posted by casinomeister

You mean people are BSing me?
Eh? I may have lost you there. From what I've read and heard, it seems to me that FA's business model was short sighted and needed to be overhauled. Is it a sham, or a way of restructuring one's business?

As I mentioned earlier to Webcaz, it's a dynamic industry and it should be expected that companies change policies or modify them to ensure that they remain profitable and/or competitive. With this FA situation, I still see this as a change in reporting - and yeah, it sucks for some - but what else is FA supposed to do?

They could have followed Money Mechanic's lead for one. MM have changed their conditions as well, but this only affects new affiliates who sign up and not existing affiliate partners. The prospective new affiliate is made aware of the terms and conditions which cover the program and can then make an informed choice as to whether to join or not. All current existing affiliates will not have these new terms applied.

By making this 'retroactive' change Fortune Affiliates, VPL etc are reneging on an existing agreement which was accepted and entered into between Fortune Affiliates and the Affiliate. Therefore if this is allowed to happen without the likes of Spear, Dominique, Simmo and myself voicing our concerns, who is to say that worse isn't to follow in the future?

It may seem far fetched, but there could come a time in 18months or even nearer whereby affiliate programs, having seen these current changes been implemented unchallenged decide to not pay affiliates for players provided after a certain time scale say 6 months. This could very well happen.

In an ideal situation, it would have been nice to see FA sit down and discus options with their affiliates. But with the environment of the Internet - perhaps this wasn't plausible. I am unsure what type of consultation they dealt with concerning this situation.

Well considering they didn't even take on board Spearmaster's suggestions I doubt very much they bothered to consult with anyone else. A guess on my part, but a guess based on Spearmaster's high profile within the industry.

If anything I feel sorry for the FA RM's, as they have always been very professional, helpfull and easy to reach whenever I have had a query. Unfortunately they are now getting the flack in some cases as they are the first line of contact at FA

I hear Debbee on this one. I wish I would see more constructive criticism. This is a situation that no one has really offered any solution for. Most of you guys (and gals) know this business, know webmastering, and are problem solvers. So far, unless I missed it, I haven't seen any remedies offered. Faced with FA's problems, what would you have differently.

It is quite simple. Without us promoting FA in the past, the players these changes affects would not very likely be playing at FA casinos or poker rooms. We would have directed them elsewhere. Therefore they would be worse off than they are now. This is why these changes in my view are so unfair. If I had known this would have happened six months ago, I would have not referred one player to FA as a result.

endnote: I'm not siding with FA - I'm trying to review this situation as objectively as possible. Please don't confuse objectivity with endorsement or to concur.

That's a given - It is good having a platform to air our concerns

[dominique]

Originally Posted by greedygirl
Now, remembering I am not taking sides on this matter, I would like to ask of those most vocal, if they were in the shoes of FA, knowing that the old agreement would most certainly create losses for the company, what you feel would be the best remedy?

I would positively love to answer that. Unfortunately I am not privvy to any details of their business. You can't suggest solutions if you don't know the problem. I am quite sure this is possible to do without breaking the law though.

Originally Posted by casinomeister

You mean people are BSing me?

I still see this as a change in reporting - and yeah, it sucks for some - but what else is FA supposed to do?

No one knows what else they are to do because no one knows what is really going on. Give me some facts and figures and I'll have a crack at it. I know for sure my solution would not be breach of contract, i.e. refusing to pay for players the way the contract with the affiliate provides for. Money mechanic introduced changes - and they managed to reverse the retroactive part of the clause and live happily aver after.

I hear Debbee on this one. I wish I would see more constructive criticism. This is a situation that no one has really offered any solution for. Most of you guys (and gals) know this business, know webmastering, and are problem solvers. So far, unless I missed it, I haven't seen any remedies offered. Faced with FA's problems, what would you have differently.

And again, show me the problem and I can try to find the solution.

Isn't your situation the same sort of thing? The Aff program has introduced new terms - nothing is breached - just changed.

The analogy doesn't hold. We were contracted to deliver a product for a predetermined reimbursement. After we delivered it (no, we can't charge ahead of time like you) we were told we will not be reimbursed as per the contract, but we had to put our earnings on a roulette table before we could collect.

We now have 4 programs in breach of contract. The rest is watching this right here. The minute the complaints quiet they will get busy finding the most profitable way for them to exist and one by one they will change the contracts after the fact. They will just not be bound by normal business law like anyone else on this world.

I would like to be able to trust those I work for - I work for free on the promise that I will get paid if they manage to convert the traffic I send and if they manage to hold on to players.

You guys don't have these problems - it's easy for you to talk.

PS. I have no proof other than the wording I pointed out above and the feeling I got from meetings and mails, but I personally believe strongly that this originates with FL and not FA.

[Simmo!]

Originally Posted by casinomeister

The Aff program has introduced new terms - nothing is breached - just changed...And of course, Casino Y has the option of bailing out or biting the bullet an pay the increased rates hoping for the best.

Briefly regarding this statement, I'd dispute that CM. A "change" to a business agreement constitutes an amendement which provides third parties with an option. A "breach" by definition directly conflicts with an existing agreement, in this case with a retroactive effect, that the third party cannot influence in any way, which it clearly has. We are unable to "bail out" regarding players already referred under the previous agreement.

Now onto the issue of solutions. I agree that this would be great, but a) they didn't approach us for solutions to their problem b) we couldn't do that without analysing their expenditure, and they're hardly going to let us do that!

Correct me if I'm wrong, but didn't they relatively recently take on new properties and the costs associated therewith? If they are in financial trouble, as they have suggested, why not *drop* properties and save money rather than take on new ones and more costs?

If they had emailed us all explaining the situation and asking for ideas, we probably wouldn't be here discussing this now. The dictatorial nature of the changes speaks volumes about our relationship. As Webzcas points out there may well be other ways, but obviously this one is the easiest option for FA.

What's done is done, and what they say now is unlikely to make a difference, although it would be interesting to hear their reasons for deciding on this course of action, rather than alternatives. They have clearly stated what they think of affiliates simply in the way they have dealt with this. Irresepcetive of the financial implications, we are clearly expendable.

OK here's a solution: FA & VPL give the affiliates back the players - well the email addresses of the players - they referred under the previous agreement so they can recommend alternatives? Yeah...can see that one happening!