The secrecy of Microgaming

jstrike

Dormant account
Joined
Nov 16, 2010
Location
Europe
Microgaming as the worlds largest software provider to the gambling industry do have a responsibility. And I think it is interesting and legitimate to ask questions related to why they don't take that responsibility. Their behavior and way of doing business will still contribute to the fact that many people are skeptical to the gambling industry.

This is a phenomenal point, but just to play devil's advocate here, this raises another question: Does a company have an obligation to uphold the reputation of its industry, against its own limited interests, i.e. strictly for the well-being of its competitors, for the sake of decency, morality or social justice? Some people say yes... but where's it written that's a reason a company should or shouldn't act? It's the law of the jungle out there. If/when MG understands that damaging the industry's reputation is hurting them more than the short-term gains help them, they'll turn around and join an organization of concerned casino owners. If not, they'll go down, and people will still gamble online. They aren't Standard Oil or Ma Bell, or the Chicago mob. They don't own infrastructure, they aren't a monopoly, and they don't have a lock on the business. They're more like Blockbuster Video. A big, slow, replaceable dodo bird. And you can't really blame Blockbuster for the fact that movies these days suck.

A public act of contrition and transparency by Microgaming, for past mistakes and to clarify their corporate dealings, even if it were purely done in the company's own self-interest, would be just as compelling as one done for the sake of altruism (and it would be hard to tell the difference). It would go a long way toward setting a standard that would force other private operators to follow suit, which in turn might do some good for the industry as a whole. And if they have shareholders, that would be something the company should be responsible to them for. If not, who cares? If a few more of their operators go rogue, and they keep whistling the same tune, they'll be eaten alive in a few years by Playtech and all the other providers waiting in the wings, especially the ones with business models that encourage transparency and strongly punish bad operators.

I get your point; MG uses different masks so they're never implicated, only their operators go rogue, but somehow never them directly. But if a plurality of MG operators are shown to act unfairly toward players, the market's right here, and it will punish bad behavior before the chips hit the ground. The industry will survive and be better for it afterward.
 

rainmaker

I'm not a penguin
Joined
Dec 28, 2010
Location
-
Your question is difficult to answer. I have no clear answer. I think every company do have some kind of a responsibility towards the society. The reason I believe so, is because:

1. It is good for their business
2. It is good for the industry (in whole)
3. It is good for the society

I would not say that they do have a responsibility just for the purpose of others, but I see every company in the same industry, as integrated parts where the industry will gain reputation based on how each company behaves. This will especially means that large companies do have an "extra" responsibility for their own and for the industry's sake.

The history has shown us that people/countries will not tolerate companies/industries who don't take responsibility. These companies/industries will at some point be f**** by the masses. In a modern society will this be done through the use of legal regulations . Have we seen this in the gambling industry? I don't even need to answer that question. Would these regulations have been avoided if companies like Microgaming would have taken larger responsibilities from the beginning? Probably not avoided, but most likely would there have been less interference.

I am not saying that a company like Microgaming needs to "reveal" trade secrets and stuff, but to hide their business in a tax haven, allegedly surrounded by mailbox companies, trusts and secrecy is a bad way of showing responsibility.

The way Microgaming is doing business was quite popular in the past. But times have changed. Even the oil companies today practice transparency. They are even committed to the environment. Why? Because it is good for their profit and good for the industry/community.

The German government actually bought a stolen secret Swiss bank account data on 1500 alleged tax evaders from an informant in 2010. How did the public react? They where applauding of course. Why? Because people don't like it when somebody is scamming the society.

Another example is G20. They agreed to define a blacklist for tax havens in 2009. And this tendency will only get worse if companies like Microgaming doesn't take more responsibility, in my opinion.
 

Casinomeister

Forum Cheermeister
Staff member
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Jun 30, 1998
Location
Bierland
I'm going to have to respectfully disagree with a number of you here; MGS is probably one of the most player focused software providers in the business, and I feel that relatively speaking they are very open to what and how they operate.

Some people have mentioned that MGS needs to get involved with player issues. Well, legally, they can't. There is a thread that some of you might appreciate (especially Rainmaker, Gremmy and jstrike since you weren't members last year). This is when I and a couple of other industry folk (Jetset, and Micki from KGC) visited their offices last Spring. We used this thread as reference, and I subsequently posted the answers there as well. It was a Q & A of sorts. https://www.casinomeister.com/forums/threads/meeting-with-microgaming-what-do-players-want.36887/

This meeting was spawned by the ton of misinformation that was being spewed on the more popular message boards concerning Grand Prive. That was cleared up and a number of other issues (software and gaming questions, etc.,). Admittedly, there are some loose ends, and I may have got the figures for the Eurolinx issue incorrect, but the bottom line is they are not "secretive" at all. They only thing they keep close to chest are the normal things that most businesses keep confidential.

There is a plan to do this again, probably sometime this summer.

MGS is probably one of the most responsive software providers in the business. Quite a few of us have been dealing with them for years (me, twelve), and there have been no snakes found under overturned stones. If there were snakes, we'd all know about it by now.

Every business is going to have problems, and every business makes mistakes. I think it's unfair to beat up a company for things that are being assumed, imagined, or from what someone else told you who heard it from someone else.
 

rainmaker

I'm not a penguin
Joined
Dec 28, 2010
Location
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Every business is going to have problems, and every business makes mistakes. I think it's unfair to beat up a company for things that are being assumed, imagined, or from what someone else told you who heard it from someone else.

I agree Casinomeister (about player focuse and responsive), but the sentence above was unnecessary. An attempt to ridicule the discussion. Yeah, things just pops up in my head and I write it down in my posts, or I ask my imaginary friend :cool:

Second, my OP was not about players issues, neither was my later posts.

This discussion is legitimate in my opinion. I have not even started to include Belle Rock in this thread yet :rolleyes: but I understand when to stop, so I will leave this thread alone.
 

Casinomeister

Forum Cheermeister
Staff member
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Bierland
I didn't mean to ridicule any discussion; sorry that I came across that way. I was just making a general statement. :oops:
 

Tengil

Senior Member
Joined
May 4, 2006
Location
Finland
Well in that meeting they totally dodged the poker fiascos which both amounts to millions in lost player funds. Instead they tried to play the victim. And operating a poker network is different than just giving a casino license. They just wanted to maximize the rake at all costs.

Plus Jo Remme wasnt actually the owner of Eurolinx, it was Runar Eidem.
 

vinylweatherman

You type well loads
Joined
Oct 14, 2004
Location
United Kingdom
Microgaming are not the only software supplier guilty of such secrecy. Rival are just as bad, and RTG ran to Costa Rica, and hid behind companies such as Hastings. It seems all private companies are secretive.

When the Microgaming director said "when the time is right", he was probably thinking about a time where the owners decided to cash in by floating the company on the stock exchange, or even selling it to a larger company.

They are still strong because the newer entrants such as Rival and Top Game have had even WORSE issues when it comes to shattering the trust of players.

International moves are being made to crack down on tax havens, and this will offer fewer hiding places for such companies. Governments could also change tax laws, so that rather than trying to tax the profits after they have been moved to the company HQ, they will tax the TURNOVER as it is made, which will be in the country they are generating these profits. One tax already exists for this purpose, VAT, which is an EU wide tax.
 

jstrike

Dormant account
Joined
Nov 16, 2010
Location
Europe
The other thread's enlightening, and it highlights one constant in the industry: People get emotional when there's any perception that a software company or an operator is being sketchy. All it takes are a few chickens squawking and suddenly everyone's ruffling their feathers. Once the public perception is negative, it's hard to pacify people without substantial gestures (read: Money). And there's no reason it should ever get to that point. I realize I kinda jumped on the blame bandwagon here, so I shouldn't have done that. I agree with rainmaker that this is an industry-wide issue and that each company has an effect on the industry; I might disagree in principle about where a company's main obligation lies, but the central point is that this boils down to each company's obligation to provide more transparency and better public relations.

I think there's a case to be made that the model under which MG isn't itself a master IoM license-holder, and therefore is legally barred from dealing with player issues, is basically flawed. MG profits when its licensees profit; they may not own or run the RNG or the servers, but they can pull their software license anytime, and then the servers are useless. Having the power to physically shut down a casino, or the power to merge its database with another, is tantamount in some ways to running it.

To put it another way, if you want to open a casino in Vegas, you have to go through all kinds of background checks, audits and licensing hoops with the Gaming Control Board. And yes, it would be ridiculous to hold Bally responsible if, for the sake of argument, the Imperial Palace's database "lost" 90% of an account you asked them to hold. But part of the reason it would be ridiculous to blame Bally is that Bally is also licensed by the State of Nevada. You know for a fact that they aren't, and cannot, be in cahoots with the casino. They can't bring in any new game, or back of house system, or anything, without every inch of it being pored over by the (smart) tech analysts at the NGCB. The licensing process for any new machine or system that's going to tie into the revenue network is arduous, expensive and slow. Every piece of equipment is held to the same standards, there are random audits; the law states that no one who writes code for a system is allowed to actually install the system on the final hardware, and every code change has to go through the NGCB before it's installed by someone else. If you have a problem as a player with a machine or a system, Ballytech has a phone number and so does the NGCB -- and they'll be more than happy to investigate it.

Now compare that with the IoM setup and MG's role as the sole, major or even partial software provider for a given operator. Firstly, they're providing both a back-of-house system and the games themselves. Secondly, they have unknown levels of access to the code on production servers. If they themselves were their own operator or the holder of the master gaming license for all their licensees, this wouldn't be a problem, and there'd be a lot less restless natives, because everyone would know where the buck stopped. If PokerStars the software blows up someone's account, PokerStars the card room has to take the heat for it. That's a different level of responsibility. I think the perception that the buck doesn't stop anywhere in the MG universe is the main reason there's a bigger pool of people waiting to gripe about them than about publicly held companies or private provider/operators who actually run their own software. That's a PR problem rooted in a particular corporate culture and a particular structure, and I think to Rainmaker's point it does in a sense damage the industry's image to have that model be so prevalent.
 
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