Article contribution by Otto Bergstrom from Cassaon-Casino.com
Cassaon-Casino.com bio: Launched in the fall of 2006, Cassaon-casino combines general game strategy, respected periodicals of the gambling genre and in depth-gambling articles. Of note to online gamers is that our articles cover various aspects of online gambling-from the basics to advanced strategy, online news, unbiased site reviews and industry interviews.When operating a business, owners and managers often find them in situations that require them to reflect on what’s right and what’s wrong. They must decide which course of action is ethical and what to do if it runs counter to the interest of the business.
Such decisions are often complicated by current developments in the business world. In today’s global village many online casinos operate across national boundaries. They must take into account the ethical standards of other cultures which may differ from those of their own country. In the grander scheme of things the Internet has given rise to new ethical dilemmas that comes with the technological age.
Fortunately, many online casinos strive to achieve the highest standards of truthfulness, fairness and trustworthiness. Casino affiliates, players and various other actors within our industry often wonder how ethical it really is? Regrettably there are operators whose quest for profits supersedes their integrity.
Ethics and Online Gambling
We’re witnessing the reweaving of the social, political and economic fabric that binds our planet, with long-term consequences that are more profound than those of the industrial revolution. As an affiliate that has been in the industry for more than a decade I’ve experienced its highs and lows. Affiliates are often seen as ”dispensable cash cows” to be tossed around at the whim of the egaming sites they promote. Life-time revenue is just a byword, not to mention rampant player and affiliate shaving.
Before I get to the meat of this article I’d like to define ”ethical issues”. What exactly does it entail? First of all it questions what’s right and what’s wrong. At times it goes beyond the scope of what’s legal or illegal. Individuals who face ethical issues are sometimes tempted to place self-interest and personal financial gain at the behest of others. If one looks at the online gambling industry from a wider lens there has been many unethical operators over the years. They operated along the lines that honesty does not always pay and doing the right thing can be costly.
Let’s have a look at the affiliate side of the business first and then the operator side. What is a casino affiliate? It’s someone who markets online casinos and receives a commission on player losses. In other words the affiliate is the condit between the player and the internet casino.
One glaring example of unethical behavior is fraudulent reporting of income. As affiliates we have a nice word for it: skimming. This conduct conceals the actual income generated by affiliates. Many affiliates are of the opinion that the stats reports the affiliate programs provide us with are a ”watered-down version”. In other words there are two stats reports: one for the casino and the other one for the affiliates.
I’d like to draw your attention to this thread started by ”Casino South Africa” over at GPWA (Gambling Portal Webmasters Association) in 2011:
”Hello fellow affiliates. Today I have something “Heavy on my heart” – In fact I am actually scared to disclose the information that I have. If I should die, I already have some people that will continue the cause! Many of you haven’t worked at an online casino and is likely unaware of how exactly casinos operate.
I have had the privilege of working at Casino’s, consulting on their Premises and working physically very close with these casino operators. During this time as an “Affiliate” I was extremely shocked at how vulnerable we as affiliates are – and how casino’s shave from affiliates, Trade with Affiliate Databases and how easy it is to remove affiliate tags from affiliates.” Casino South Africa”
To pinpoint the types of ethical issues that currently plague our industry one must ask the following question. What are the most prominent issues it currently faces? I’ll group them as follow: shaving is a problem, unlike yesteryear operators now have a short-life span, money laundering, tax evasion and fraud. I’m not implying that every single operator is guilty of these practices. Conversely, most operators are ethical in their business relationships with their affiliates and players.
Ethical Issues and Employees
In some cases employees (affiliate managers and other casino staff) engage in unethical behavior at the expense of the employer (operator). At the most basic level, they may fail in their ethical obligation to do an ”honest day’s work.” Once again this happens!
”I know there are many affiliates that trade in stolen databases. But how many of us worked hard to get traffic to the casino, just to get this traffic stolen by people working at the casino – selling it off to another casino? Most Casino Affiliate Managers will tell us it is because of the USA that retention is down. This is a lie, retention is off because Casino people steal databases, remove tags and our Player Data is exposed and left unsecured! Casino’s also has to make up for the loss in profit withdrawing from the USA have caused.” Casino South Africa
The igaming industry is fiercely competitive and the stringency of an employee’s ethical standards can be compromised as a result of pressure.
International Ethical Perspectives
Within its borders every country faces unethical business behavior. In extreme cases criminal gangs engage in business operations that might be characterized as evil, rather than unethical.
Affactive and Revenue Jet affiliate programs have been shut down due to fraud: http://www.casinocitytimes.com/article/affactive-revenue-jet-affiliate-programs-shut-down-following-owners-arrests-64611
”Gery Shalon, 31, and Ziv Orenstein, 40, were arrested on Tuesday at their homes in Israel. They have been accused by U.S. authorities of engaging in “pump and dump” stock manipulation schemes dating back to 2011. An indictment filed in New York charges the suspects — along with Joshua Samuel Aaron, 31, a U.S. citizen living in Moscow and Tel Aviv — with money laundering, identity theft, and securities and wire fraud.”
Affactive had a less-than-stellar reputation for many years. Top portal casinos like Casinolistings.com have blacklisted it: http://www.gpwa.org/forum/warning-affactive-refuses-pay-big-winner-219425.html?highlight=muppet
It’s evident from the above as to why Affactive, Revenuejet and Betuniq betting brand compromised their ethical standards: They followed the green-bill-road to earn profits at the expense of the player and affiliate.
”Over the weekend, Malta Today reported that three Italian firms – Uniq Group Ltd, Betsolution4U Ltd and FenPlay – have challenged the suspension of their licenses by the MGA. The firms are threatening to sue the regulator for millions of euros in damages if an investigation into their operations produces no hard evidence of shenanigans.” CalvinAyre (http://calvinayre.com/2015/08/02/business/italian-online-gambling-firms-sue-malta-license-suspensions/)
Since this incident, Malta’s reputation as a reputable gambling jurisdiction received a lot of bad press. It reached a stage where the MGA (Maltese Gaming Authority) said that it’s going to update its current legislation which gives Maltese authorities more leverage over the industry’s gambling market.
Unfortunately the online gambling industry’s reputation has been ”scarred” to a certain extent by unscrupulous operators and verbal posturing-people speaking more ethically than they act. As the old saying goes, ”The road to hell is paved with good intentions”.
Mitigating Circumstances
How does one prevent operators from shaving their players and affiliates? To a certain extent this responsibility now falls upon the affiliate.
Before an affiliate signs up with an operator, proper due diligence on it must be done first. By due diligence I mean: 1). Is it licensed in a white-listed jurisdiction? (Alderney, Gibraltar, Isle of Man or Malta). 2). Is the software of the casino regularly audited by prominent firms such as Ernest & Young, PriceWaterHouseCoopers and is the audited report (average payout ratios for all the games) displayed on its website? 3). Transparancy: Are the names of the owners/management listed in the ‘About Us’ section of the casino? I firmly believe that if an operator is transparent less affiliate and player shaving will occur. 4). Does the operator have steep WR (wagering requirements) attached to its bonuses, are withdrawals quickly processed, are progressive wins included in the withdrawal limit and do the games play smoothly? 5). Has the operator been blacklisted by Casinomeister.com or by other authority protals? 6). Are the affiliate programs working with hackers? These are just some of the questions affiliates need to ask themselves before they sign up up with an operator.
Why The AGCC (Alderney Gambling Control Commission) Leads From The Front
A shining example of how the online gambling should be regulated is the AGCC. This regulatory body meets world-class standards by attracting world-class operators.
Alderney is a very popular destination for a number of reasons. The island is one of the largest hubs for B2B services in the world and currently transmits high volumes of internet eGambling traffic with the technical capability to expand even further.
Unlike other jurisdictions Alderney does not apply any betting “taxes”, only fees that contributes significantly to Alderney’s economy to the extent of £5m per annum. Operators licensed here are above-board and treat their players and affiliates fairly.
Conclusion
I’d like to see an organisation set up that looks after the interests of casino affiliates. More often than not the majority of affiliates have not legal recourse or leg to stand on when it comes to dealing with rogue programs.
Today’s digital market place provides an abundance of opportunity and choices to any entrepreneur. We live in exciting times as new technology keeps on taking cyber gambling to new heights. The good news is that more and more governments are in the process of regulating it and harnessing its core principles by mass collaboration.
In itself the industry is not unethical or morally bankrupt-just the bad actors in it are. Gambling online is a great source of entertainment on condition it’s done responsibly and properly regulated.
