What is a white label casino?
White label products have existed long before the concept of a white label casino was even a possibility. The name derives, literally, from a white label. Manufacturers would make products featuring the plain label on the packaging on which someone else could affix their branding creating the appearance that they were the manufacturer. A white label casino is, effectively, the same concept. The gaming site is set up and maintained by the operator, but they have left the digital equivalent of white labels for someone else to apply their own branding.
White label casinos bring many benefits so, today, many online casinos are actually operated in this way allowing brands that may not be directly associated with online gaming to enter the market. The Sun newspaper, for example, may have a long association with bingo in its pages but has no direct expertise in online gaming. By using a white label solution provided by Nektan they can operate their Sun Play site with relative ease.
The gambling ecosystem
White label casinos sit in the middle of the gambling ecosystem. Although an online player may feel they are interacting with the brand, they are actually using a site managed on the brand’s behalf that sits at the centre of a web of relationships. The most important relationship will be between the brand who provide the name and the white label operator who actually control and run the site. This one-to-one relationship is where the look and feel of the site is developed and the content agreed. The operator, however, will sit at a centre of the network that makes the casino possible, holding the casino licence, dealing with payment processors and negotiating with the individual game developers to run the site.
Their client, the brand, will usually just be the face of the casino, driving customers to the site, paying the operators fees and taking their profits. Essentially, the white label operator does everything that makes the platform work and that is what makes them such a popular option.
Looking at the customer’s journey with an online gaming site, although their introduction to the site may be via the brand’s promotional activity virtually all their subsequent interactions will be with the operator. So, the customer acquisition, including the ‘know your customer’ checks and promotional offers will be managed by the operator. The white label company will also be responsible for the games offered, managing the contracts with developers. Any payments from or to gamers will be processed through their system and if the customer has to contact the support team, the staff they end up dealing with will be employed by the white label, not the brand.
It may seem that the brand simply has to sit back and receive their profit. The white label operator will give the brand analytics and customer data, which they can use to inform their marketing, but it’s entirely possible for the casino’s owner to be a largely passive partner. Essentially, the brand owner is responsible for providing their name and the customers — and by extension their reputation — for the white label to provide the service that makes the profit.
How it works
The process of creating a white label casino starts with the decision by a brand that they want to start a casino but do not have, and do not want to manage, the necessary resources to operate one on their own. They then work with a white label partner to develop a site.
Since the infrastructure is already in place, and in almost all cases will already be in use by another brand, the development can be rapid. A straight-forward deployment of a package may only take a matter of weeks since it is largely a case of providing the design details to a pre-existing template.
The costs are also significantly less. While it is difficult to assess the likely costs of establishing and running an online casino it is easy to imagine it quickly running to a six- or seven-figure sum. Aside from the infrastructure required to host and run the site, it would require significant developer manpower to design, code and implement, then the licensing costs of games, fees to payment processing partners, and registration and licensing with the Gambling Commission.
Most white label operators are opaque about their costs, but BetConstruct, a UK-based company that includes Panda Poker and LVbet among its clients, is remarkably open about its prices. Set-up fees start at €10,000 for a basic casino, with a full white label solution offered at a 30% revenue share.
The ease of set-up is the biggest and most obvious advantage of a white label solution. Without it, it is hard to imagine the plethora of gaming sites available at the moment, and certainly not some of the names attached to online casinos. Sun Play has been mentioned, but rival newspaper The Mirror operates an online casino using Jumpman, while Virgin — admittedly a diverse brand — use a Gamesys platform. Even those already associated with gambling will opt for the ease and expertise that is provided by a white label solution. Aspers, who run a chain of physical casinos in the UK, turned to Daub Alderney for their online presence.
However, the ease of management is also a major factor. By reducing the running of a casino to a single contract a brand makes huge savings. While there is still an operating cost — often a revenue share although some white labels change fees instead or in addition to a share — because the actual operator works at scale their per player costs are significantly less.
Opting for a white label solution is not without some disadvantages for the brand. Ultimately, it requires them to cede some control over their name and this carries a reputational risk. They are reliant on the operator delivering a good and consistent service which does not always happen and white label operators have closed, sometimes at short notice.
Even discounting this risk, after all, the benefit of this a white label implementation is that a replacement can be set up remarkably quickly, there is a general lack of control over the site. Beyond branding the white label operator will have a level of consistency across all the third-party brands they operate. Without this they would effectively have to manage and support unique sites, removing the cost benefits of the white label approach. This does mean that many sites look very similar. This is not just gambling sites aping each other’s design; in many cases they are literally the same site with different graphics.
Finally, the ongoing costs are high. While it might not seem unreasonable for the operator to claim a significant share of the revenue, they are the ones doing the work after all, for some brands this might start to feel too big a share. There is, obviously, a profit to be made in running an online casino. While using a white label may be a cheap and easy way to get started, as a site’s client base grows it can reach the point at which it becomes viable for the brand to become an operator and cease the sharing the profit.
The future of white label casinos
It is hard to imagine online gaming going anywhere, and therefore just as hard to imagine white labels going too. However, while they have enabled an explosion in UK gambling sites their future might not be as bright.
The issue of white label operations has become a subject of the review currently underway of the Gambling Act 2005, the law which governs UK gambling. Specific criticism has been made of their use as a backdoor to the UK market, allowing foreign entrants easy access by using a white label’s licence.
But even without the review the current regulatory framework has caused white label operators to consider their positions. Earlier this year the Gambling Commission fined an operator, FSB Technology, who they found were not keeping a close enough eye on three of its third-party websites. They were also issues with additional conditions on their licence requiring it to improve the areas found wanting.
Other operators have also withdrawn from the UK market following Gambling Commission intervention. In 2019 EveryMatrix, which had operated Sporting Index’s casino, among others, saw its licence suspended over concerns about how it was dealing with problem gamblers. They subsequently withdrew from the UK consumer market. Six months later Viral Interactive announced they would no longer be operating in the UK. They had not been subject to any formal Gambling Commission action, but cited the “ever-tightening regulatory framework” as part of the reason behind their decision.
Despite these examples, though, the market still appears remarkably vibrant. There are hundreds of UK gambling sites and most are provided though white label arrangements. Although UK regulation may be getting stricter, the impossibility of regulating the whole internet makes it unlikely that future changes will attempt to end white labels entirely. Instead, looking to balance the demand from customers and businesses to trade against the need to protect consumers and the vulnerable. Given the gambling industry’s long history of adapting and innovating, this is likely to be a challenge to overcome rather than an insurmountable obstacle.
John Delaney - Chief Editor
John Delaney is a well regarded expert in the online casinos within the UK. After finishing his degree in Computer Science at the Univesity of Manchester he worked with the biggest names in the casino industry including Entain (previously GVC) and the 888 group.