What is a White Label Casino?
“White Label Casino” is definitely a term that all of you must have heard at some point or another in your casino journey that has been a roller coaster. Unless you are an amateur, in which case you should stay and read as we explain to you what exactly a white label casino is.
A white label casinos are nothing but a completely operative online casino that you have “borrowed” from another entity. Actually, the word “bought” would be a better fit than the word “borrowed”. Let us explain this better.
Imagine 2 different entities in the casino scene, Company A that is already established as a popular casino/gaming provider and Company B that is looking out to take its first steps in the industry.
Let us discuss the steps that Company B should take for starting a new casino:
- Initial funding
- Licensing and registration
- Buying good casino products
- Structuring the online casino
- Branding and Marketing
- Attracting new “customers”
These would be the generic issues that Company B has to sort out. If we get into specifics, there would be a million more things that Company B has to do.
Now imagine Company A. They already have 1 successful online casino or maybe more. So they have a lot of connections in the industry and it would be a cakewalk for them to get licensing and good casino products and design a great online casino.
And since they don’t really need it, Company A will offer to sell a pre-designed online casino to Company B. If Company B accepts, out of the 6 steps that we mentioned, 3 have already been done by Company A.
Company A would have taken care of all the licensing requirements, it would have picked out all the casino products for you and designed the site in a very attractive way.
So all you have to do is cough up the money for the initial purchase. Mind you, this would be a looooot lesser than the initial funding that you would have to come up with if you were building an online casino from scratch.
And once you have bought the casino from Company A, you just have to give it your own name and take care of branding. Once you start up on marketing, you would automatically bring in a pool of customers.
Sounds so easy right? We are sure that you will be tempted to get your own casino now. But stay put. All that glitters is not gold. So, while there are a long list of advantages to getting a white label casino instead of building your own, there are some disadvantages as well. And since we wouldn’t want you to get into anything blindly, we have discussed everything in this article. So happy reading!!!
The technicalities behind White Label Casinos
The terms and conditions that are involved in the set up and functioning of a white label casino are pretty straight forward. If you understood our explanation with companies A and B, you would already have a broad idea of how everything works.
Let us now assume that you are a starting out in the casino industry and are looking for a gaming provider to build you a white label casino. Put yourself in these shoes and think about what you would look for.
You would obviously want an esteemed provider so that there is an assurance of quality. And all esteemed providers would have skilled teams working for them so you don’t have to have any qualms as far as the quality of the product is concerned. But all of this is not free.
You have to pay a pre-agreed amount upfront but like we already said this would not even be close to what you would have to spend if you were doing everything on your own from scratch. This pre-agreed amount is called a set up fee.
So once the deal is done, you will have to start promoting the product which involves branding and marketing that we spoke of earlier. And for this, you will get a share of the profits that the casino makes. Now now, since you are only doing a share of the work, you get a share of the profits. So don’t be greedy as this is a pretty good start for someone who is new in the industry.
Once you have learnt the ways of the world by doing this for a few years, you would be well equipped to handle your own casino. In the meantime, this is just an easy way to earn a quick buck.
4 Pillars of a Casino
We call this section 4 pillars of a “casino” and not a “white label casino”, because these 4 aspects apply to all casinos in general but we’ll see how each aspect becomes a lot easier in the case of a white label casino.
Pillar 1 – License
The importance of a casino license cannot be stressed enough. There are a lot of stories that surround online casinos, especially the ones in which you play with your real money. There is not a lot of clarity on how wagering your money online really works and players throw a sweat when they are unable to withdraw money.
Since this is the aura that surrounds casinos in general, it is mandatory for a casino to have a legal license from as many issuing authorities as possible as this helps you a great deal in establishing the first level of trust with a customer.
Because of its value, it is extremely hard to acquire a license. So it would help a great deal if your company already owns a couple of casinos with licenses, so that you are more likely to get your next casino licensed. But the same would be harder for a company that’s just starting out. So just let a third party take care of your licensing requirements.
Easy Peasy Lemon Squeezy!
Pillar 2 – Software and Games
This is the main part of an online casino that attracts players. The better your games than your competitors, the more players you will attract. And better games are available from the best gaming providers. And an established casino would already know which games to pick from which gaming providers.
For example, Evolution Gaming is the leader of Live Casino games while Microgaming can’t be beat when it comes to video slots. And this the elder company would know all of this, a start-up like you would not have to worry about this at all.
Pillar 3 – Money Money Money!
All casinos make money through deposits and withdrawals. This is no secret. All your associations with the payment gateways will be taken care of by the parent company. But depending on your deal, you can also choose the payment gateways that you want and other deposit and withdrawal features and other payment related issues.
Pillar 4 – Legal
We have all watched enough Suits to know that no deal can be done or no business can be built without a legal department. The entire terms and conditions and legal compliances of the casino will be handled by the parent company as well. You will obviously be given a chance to review it before it becomes official.
Now that we have covered the aspects, let us look into the advantages and disadvantages of White Label Casinos.
Advantages and Disadvantages of White Label Casinos
We have already discussed the advantages and disadvantages of White Label Casinos on a broad scale. Let us now make a list of some specific advantages and disadvantages.
Advantages of White Label Casinos
We should agree that there are definitely more advantages than disadvantages but then again all of this varies from one company to another.
- We already talked about something known as a set up fee. While this is obviously a lot cheaper than gathering funds for operating a casino from scratch, this is still a sizeable amount. While this is determined by the parent company that you pick, keep in mind that a parent company that is reputed for their quality may charge more than a smaller company.
And the money that you save here can be used smartly for branding and marketing. So choose a company based on your budget and the quality bar that you want to set.
- Since all of the important work is done by the parent company. There is no saying the amount of time they would take to deliver a online casino portal that you approve of. Although there is a time clause in the contract, this is always followed by another clause that says that providers can take time as needed depending on other third party operators that they partner with.
Keep in mind that the parent company is probably handling multiple clients like you while you are just waiting for them to be done with your product. And also, you don’t want to hurry them and compromise on quality. So get a genuine timeframe from the company and add a couple months to it just in case.
- Almost all of the major responsibilities are out of your hands. Especially the ones that require careful consideration like acquiring a license, developing the software and the casino structure. And this is just the tip of the iceberg. There’s a lot more that you are relieved from.
- When you get a white label casino, you will have a customer support team set up for you. The parent team will take care of this and assemble a team of executives who are familiar with how the casino structures work. This is at least work for the initial period after which you can slowly take over.
Like we already said, these aspects differ from company to company, so do your research before you get into anything serious.
Disadvantages of White Label Casinos
It is important to always see both sides of a coin. And while there is no doubt that there are some great advantages to adopting a white label casino, there are also some disadvantages.
- There is very little that you can control. Since what you get is an almost finished product if not fully finished, there is not much that you can tweak. And even this depends on the provider that you choose and your deal with them.
Some may give you autonomy to decide certain aspects but even these would be very limited. So make sure you are prepared for this relinquishing of control especially in the long run.
- While it may seem like promoting the product is entirely up to you. That may not really be the case. Since the reputation of the provider also rides on this. They may have some input on how you should handle branding and marketing for the product.
In short, it is almost like they are choosing your Christmas gift, it’s gift wrapper and placing it under the tree for you. While this is certainly an easy option, it may not always be the right option for you. Let us summarise everything before we finish.
Like any other business, there are a lot of risks involved. Also like any other business, the higher the risk, the higher the returns. If you set up your own casino from scratch, you would have complete autonomy over each and every aspect of the design, the games, the providers, the payment systems and everything. And even though the initial set up may cost a lot, your profits will also be huge if the business is successful.
With a white label casino, you pay a comparatively smaller set up fee but running costs in the long run will be high. And the harder aspects like acquiring licenses and making deals with providers will all be taken care of by someone else and you can just sit back and relax. Because reputed operators will not compromise on quality.
We can keep weighing such pros and cons all day long, but it’s this simple. Do you want to build your house or buy your house? How much of everything do you want to control? Just like every other business decision, this is not an easy one. So take your time. We hope this article helped you get things into perspective.