WHITE LABEL PROJECT COMES UNDER FIRE (Update)

10 August 2007

Players and affiliates go to detective mode on 32 white label sites

This week saw an extraordinary volume of irate online player and affiliate posts over some 32 ostensibly individual online gambling websites which carried games from the reputable turnkey provider Microgaming.

White label sites usually carry the games of, and are administered by the main licensee of the software provider, leaving the owner free to market the venture.

Such a large number of 'new' operations from a top of the range provider that usually launches quality rather than quantity when it comes to online casino and poker room operations was bound to attract attention sooner or later, and this one certainly did after one of the owners started posting on the Casinomeister online gambling information portal.

What investigating players and affiliates subsequently discovered proved to be an unwelcome surprise to most - the sites were not full Microgaming licensees at all, but "white label" operations commissioned or sub-licensed through a respected Microgaming licensee - Playshare.com, which owns two full MGS online casinos in Casinoshare and Grand Monaco Casino.

It seemed that white label operations with unfamiliar names and little if any indication to players of their association with Playshare had sprung up without explanation, using the main licensee's backend and games to carry on their business - presumably for a share of the profit.

The growing furore brought a representative of Playshare to the forum, who admitted the "cat is out of the bag" and assured players that his company would ensure they were paid; that full due diligence had been exercised before turning the white labels loose on the gambling public, and that they were monitored.

However, the discovery of links to sex sites on the Casino2See.com website made that appear unlikely. And an email offering affiliates $3 000 for introducing possible white label partners indicated that the recruiting net had been cast wide.

The discoveries implied that a white label strategy had been deployed without either software provider or licensee finding it necessary to publicise a departure from a trusted business practice. A proliferation of significant numbers of previously unknown online casino sites appeared to have been the end result.

Players in particular are sensitive about white label operations, which at the low end of the market tend to lure players in with bonuses, only to disqualify winnings by declaring that only one bonus is claimable from the main licensee. If the white label does not clearly indicate that it is associated with the specific main licensee, it leaves players open to abuse and is therefore perceived as deceptive and unethical.

Some players have personal reasons for not wishing to give their business to particular online casino groups or play certain softwares, and unidentified white labels could deceive those players into giving their patronage to a firm they would prefer not to visit.

Another aspect to the white label trade is that a major player requirement is being paid on time, and having the security of knowing that if an operation fails they will be looked after - a strong Microgaming tradition. It is therefore important for players to know who is really behind the white label, making transparency a critical priority. Players need to know upfront with which group and software the white label is associated, and in the current case this was not clear to most.

Although white labels tend to "unnecessarily clutter the online gambling landscape" as one poster put it, these "sub-contractor" operators are not necessarily bad. White labels can be useful to address niche markets or regions where the licensee does not have entre, and provided they are introduced in a transparent manner and with professional due diligence beforehand, and policed responsibly this sort of venue can be justified in this role.

The other side of the coin....

Playshare CEO Max Wright stepped up to the plate to address the issues with candour in the following public statement:

"Over the last few days we have worked closely with MicroGaming to define new WL rules. From now on we will be aligning our WL strategy with the strict guidelines that we and MicroGaming have set out.

"It is clear from this thread, and we absolutely agree, that for any WL campaign or program to be successful the following should be taken into account:

* Upfront and public announcements about the scheme and accept responsibility for the careful selection, vetting and probity checking on the applicants.

* Develop strict monitoring and system controls, together with clear guidelines on what is acceptable in terms of player respect, player protection, player privacy, spam and general marketing.

* If these guidelines are infringed, then there is provision to terminate the white label's casino or other necessary steps that need to be taken.

* Originating brand identified on white labels

* Clearly state that PlayShare takes full responsibility and operates all the payments, operations, support for all the players.

* Players and affiliates need to be assured that they will be safe and respected.

* The "About Us' page is going to be updated as we agree it is not clear. You can see some info at <a href=" http://www.playsharepartners.com" which is a site undergoing some fast work now.

* We are going to make this information such as payment processing far more accessible and more obvious to the player.

"PlayShare acknowledges that there are areas for improvement in our White Label Program and we are committed to working on these areas.

"I trust that you feel reassured that all your concerns are being addressed and I invite you to get in touch with me should you require anything further."

Turning to specific player concerns, Wright made the following additional comments:

He said that the WL program started in April 2007, when many of the listed 35 Playshare white label brands were test accounts, dormant accounts or pitch accounts that did not evolve into operational units. The objective was to gain access to niche markets that would otherwise have been hard to penetrate, he said.

Wright accepted that in hindsight his organisation had "....not been as transparent as we could have been and are correcting this by updating http://www.playsharepartners.com, making clear the WL scenario with regards to player funds and who operates these casinos.

He pointed out that with regard to terms and conditions, Playshare had made clear where the player stands with regards to opening offers. "However, we are going to make this easier for the player to spot as not every player actually reads the terms and conditions before playing. The player will only be affected with regards to the opening offer and all future offers will not be affected as every account is treated separately," he said.

Asked about the screening process for new WL owners, Wright gave an undertaking that each white label applicant will go through a screening process, such as personal background checks. He reiterated that PlayShare takes full responsibility for the players so that they are not compromised. And going forward, marketing will be strictly monitored.

Addressing the Casino2See links with sex sites, Wright revealed that this had been an oversight and that he had had the links removed. "This will not occur again," he assured.

Returning to the suitability of WL venues to reach niche markets and certain regions, Wright informed players that the WL initiative had just begun, but venues aimed at specific areas of business will open in October or November. "We had only just launched and so are still in the early stages, and have already learnt some very valuable lessons," he commented. "These marketing campaigns will not benefit our current players, as they are acquisition promotions to get new players on the site."

He added that the public debate on the WL issue had "....definitely got us thinking and given us a kick and so I am putting a lot more resources and my time to improve the white label program for the better. Over the next few days and weeks you will see changes."

Playshare's CEO went on to acknowledge that setting up "hundreds of white label brands" is not productive and is damaging. "All new partners for the future will only be set up as white labels if they have something strong to bring to the table such as an existing powerful brand," he said.

Clarifying a question on where his group's responsibilities rested, Wright said: "PlayShare manages all player funds and takes full responsibility for all purchases and cashins on behalf of the White Label. If the White Label goes under and closes their operation then the players will continue to play on the casino and Playshare will honour any associated bets. The Player will not be compromised."

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