White label casinos, are – today – more common than ever before, and more and more operators are choosing to use white label solutions rather than forking out the time and financials associated with setting up a new, individual branch.
In this post, we’re going to be taking a look at what white label casinos are, how they operate, and what the main differences are between independent casinos and white labels. Let’s begin by taking a look at what white label casinos actually are.
What is a White Label Casino?
LCB offer a great insight into what white label means – and you can read their explanation below:
“The term is referring to a service or a product produced by a company, which is then supplied wholesale to another company, which in turn, sees the product being rebranded as their own – with both parties then taking a cut…
…White labels are a common online franchise and seem to be the perfect way to start an online casino business. Experienced developers within the iGaming industry set up the white label, who then sell it onto a third party.
The third party is then solely responsible for the marketing for that casino brand, but this may come with no support or management – depending on the deal.”
A white label casino works using this exact principle – and it’s basically a pre-set casino platform that has all of the functionality and facilities ready to go. A company who want to create a white label casino simply need to pay a fee to the white label company, and they then get to put their branding on the casino technology. Users of the site will not immediately know it’s a white label casino.
Why Operators Choose White Label Casinos
There are a number of reasons why operators tend to choose white label casinos as opposed to starting up their own site – and below, we’re going to take a look at some of the most common reasons why.
Licensing: Perhaps the biggest benefit of white label casino solutions is the fact that operators do not need to apply for their own gambling license. Doing so is often an expensive, drawn-out process, and when an operator chooses to work through a white label casino, they attach onto their license, instead.
Fast Setup Times: When you launch a white label casino, the framework is already built. Aside from a few branding bits and bobs, the entire website is ready to go, and this saves new operators from having to build their own site from scratch. White labels can launch in as little as a few weeks, and because everything is already done, the only real thing to worry about is marketing and player-acquisition.
Easy Management: Many white label solutions offer not just the website, but also customer support, payment processing, and more. This means operators can get started – offering their services – far quicker than they would be able to otherwise, and it means new white labels can get up and running – and maintain their casino operation – easily and quickly.
Benefits of White Label Casinos
Take a look at what Melior Games say about the benefits of white label casinos:
“The most annoying and nerve-racking part of any business is obviously the beginning. Opening a new business takes investments, commitment, motivation and most importantly time, because you need time to develop and craft your product, while also keeping an eye on the budget and thinking about risks and potential failures. This is a huge dilemma for software companies – should we spend a year developing unique apps or just find somebody to do it for us and start business in a week? Believe it or not, but the second option is extremely popular. You probably would be surprised to find out that thousands of apps and games are not even made by the so called ‘creators’, but are claimed to be their own. There’s nothing criminal about it – white labeling is a perfectly legit business practice that involves selling blank or custom made casino software and giving companies the opportunity to brand them as their own. Why do companies choose to buy ready-made software instead of developing their own? Well, there is a whole spectrum of reasons, the most obvious indicator is money and time.”
Of course, the benefits don’t end there – and they serve as the perfect way for operators to launch themselves into the casino sphere, in as little time as possible. However, it’s not all good news – and there are downsides to white labels, as you can see below.
Downsides of White Label Casinos
As with anything in life, there are some downsides associated with white label casinos, and one of the biggest, and most prominent is the high revenue share that many white label solutions require.
Because white label solutions often offer extremely low start-up prices, they need to make their revenue from somewhere – and most choose to use a revenue sharing approach. This means that operators will pay a percentage of their earnings to the white label solution, and over time, this can be bad news, as it can represent a fair chunk of their profits.
In order to combat this, white label casinos will generally ramp up their marketing efforts. This is because acquiring new players is a top-priority for them. Generally speaking, white label casinos need to attract more players than conventional, standalone casinos in order to stay level.
Another downside of white label casinos – from the operators point of view – is that they may have limited control over the casino. For example, most white label solution providers will require operators to process all their payments through them – and this is because of the licensing requirements that the white label provide is responsible for.
While, admittedly, there are downsides to running a white label casino, generally speaking they’re a pretty good way for new operators to penetrate the online gambling market. Without white label solutions, the marketplace would likely be overcome with big name brands; newer, smaller operations would probably struggle to enter the market, due to the highs costs involved.
White label casinos are definitely growing in popularity, and it’s likely – especially given the increasing costs associated with running an online casino – we’ll see more white label sites opening up in the future. Whether certain regulators may look to clamp down on white label casinos one day (due to potential issues with license sharing) remains to be seen, but as of now, it’s a legal, and simple way for operators to start-up a new casino operation, and it seems to be working well!