Vancouver Sun story on Casino Affiliate Conference


Dormant account
Dec 12, 2000
On-line casinos bet on lucrative future for cyber-gambling
Companies fight outlaw image, Derrick Penner reports

Derrick Penner
Vancouver Sun

Friday, September 27, 2002

Vancouver Sun
On-line casino proprietor Bryan Bailey warns that gamblers must watch for scam operations.

The purveyors of online gambling are "either completely legitimate or complete scumbags," says Marc Lesnick, a New York-based consultant for the Internet gaming industry.

And Lesnick, who is hosting a gathering at the Sheraton Wall Centre of about 150 people involved in advertising online casinos, says legitimate owners work hard to prove themselves.

Setting up an online betting parlour would be illegal in B.C. or virtually anywhere else in North America.

Millions of North Americans, however, join an international audience who cast billions in bets through unregulated cyber-space at casinos hosted on computer servers in places where governments have chosen to licence them, such as Antigua, Costa Rica and the Isle of Man.

There are few rules about using a Web site to promote online gambling and direct customers to casinos, which was the subject of Lesnick's conference. It is a process called affiliate marketing. Webmasters advertise casinos and earn a cut of the profits from the gamblers they direct to casinos.

And while the short, wiry businessman with close-cropped curly hair and a stylish checked grey suit buzzes in and out of meeting rooms, making introductions and helping Web site owners network with the major Internet marketing firms, he battles that outlaw image.

"Luckily, the legitimate ones hang out together," he says, while waiting to introduce a reporter to Bryan Bailey, one of his guest speakers and proprietor of a portal called

Promoting online casinos with responsibility sounds like a contradictory phrase, but that was Bailey's topic at the conference.

"There is a certain element of the industry that is attracted to this which is really not up to par," Bailey says. "You're going to have the evil that is involved in it. Not so much that I'm trying to do an expose of these bad operators, but when they do show up I try to warn people and let them know what's going on. But I think they're more in the minority."

Gamblers themselves help to regulate the games, Bailey says. If a few of them smell a ripoff, they'll let other players know and the casino sites just won't get traffic.

He recommends that Web masters who promote casino sites for profit check them out. Most importantly, they should affiliate with casinos that are hosted in countries that licence them (there are 70 countries that do) and subject licensees to some form of regulation.

Bailey says in other cases casinos are extensions of well-established, land-based casinos. U.K.-based operations, for example, will operate an Internet presence from the Isle of Man, and would risk their reputations by ripping off customers.

North American governments have helped give online gambling its bad name by refusing to legalize something they don't understand, many online gambling promoters gripe.

Steve Everitt, the Vancouver-based North American marketing representative for a gambling affiliate program called Gambling Federation, says gaming is an accepted part of the culture in places like Europe.

"The difference is, here in North America governments haven't figured out how to make a buck," he says. "They just don't want the competition."

That, he said, has pushed the gaming to other jurisdictions.

"Over the past six years, [online gambling] has gone from being completely unregulated to rapidly regulated," says Ruth Parasol, international business development manager for iGlobal, the operator of two major online casinos, Starluck Casino Online and Party

Her company is registered in the British Virgin Islands, has offices in the Dominican Republic and Curacao, and out-sources back office functions to companies in India, but its casinos are hosted on an Internet server located on the Kahnawake first nations reserve in Quebec.

Picking multiple locations, she said, was simply a function of picking the most advantageous prices for labour and taxation. That is the direction business is going globally, Parasol says, and online casinos are perhaps just a little bit ahead.

And the computerized casinos are subject to the Kahnawake gaming commission's regulations that include rigorous background checks of operators and requirements that its computer programs be tested by the same independent agencies that check computerized gambling devices in land-based casinos such as BMM International.

On-line casinos are high-volume, low-margin businesses, Parasol said, in a market that is highly competitive and saturated, and whose margins are quickly drying up as they invest in audits and regulatory compliance where they operate.

Bevess Giwelb, who represents another affiliate program called Partner Logic, which promotes Intercasino gambling sites, said the accounting firm PricewaterhouseCoopers audits its licenses.

"In America and Canada there is a different viewpoint about gaming that it's a sort of underhanded and dirty environment," she says. "I work out of London and there's not that same feel."

Giwelb adds that the reputable casinos and promoters act responsibly about things such as problem gambling by pointing people towards sources of help depending on where they're located and posting warnings about the habit-forming nature of gambling.

"The people who are reputable as ourselves in the marketplace take on board that it can be a problem, just as cigarette companies will print on the side of a cigarette packet that this can be damaging to your health," she says. "You choose to buy that cigarette, and smoke it, but you know the score."

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