Article contribution by Otto Bergstrom from Cassaon-Casino.com
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”.
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.
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.
We are sponsoring the prizes at ASEAN Gaming Summit Poker Freeroll
We are excited to announce our first event sponsorship and we would like to thank our friends at All-In Translations for the opportunity and initiative. As a strategic partner of Asia Gaming Brief (organizers of ASEAN Gaming Summit), the honor is even higher. (see EEGMedia/EEGEvents engages in strategic partnership with Asia Gaming Brief)
It was great to see that All-in Translations will once again host the official poker tournament of the ASEAN Gaming Summit in March and we want to make it even more interesting for the players by giving some prizes on behalf of our company.
The tournament is a freeroll for delegates attending the conference and we will be sponsoring the prize pool with no less than three packages of great value.
Prize 1 (worth $1600): 1 Seasonal ticket for a company representative which includes access to 5 EEGEvents in 2018.
- Prague Gaming Summit – 29.03.2018
- Mare Balticum Gaming Summit – 08.05.2018
- Vienna International Gaming Expo – 30.05 – 01.06.2018
- Central and Eastern European Gaming Conference and Awards– 25-26.09.2018
- European Gaming Congress – 16.10.2018
The ticket includes access to the conference/seminar, complimentary lunch and access to all networking sessions.
More details about the events can be found on the official landing page of the events division: www.eegevents.org
Prize 2 (worth $550): Tickets for 2 EEGEvents in 2018 for a company representative.
The winner can choose from the above list of events.
Prize 3 (worth $900): Featured radio spot for 3 months and interview on iGaming Radio
The player who wins this gets the opportunity to present the company with a radio spot which will be streamed during peak hours on iGamingRadio.com. The radio spot can be created by the representative’s team or by the team at the first online radio dedicated exclusively for the b2b sector of the online gambling industry. A selected representative will also get the chance to take part in the Innovation Talks monthly show and discuss the latest innovation in the industry.
As you may already iGaming Radio is the first online radio streaming gaming related news exclusively through daily shows, interviews and press releases. The aim of the station is to keep its audience connected 24/7 with the online gaming industry by playing awesome music and serving the news first hand.
You can tune in on www.igamingradio.com
About ASEAN Gaming Summit
TECH TRENDS, CONVERGENCE, STRATEGY, RETURN ON INVESTMENT
20-22 MARCH, 2018, CONRAD MANILA, PHILIPPINES
The ASEAN Gaming Summit draws together the region’s leading operators, regulators and suppliers, who are successfully developing the next generation of gaming offerings, both terrestrial and online.
From new-style integrated resorts, addressing the premium mass market, to sports betting innovations and online gaming, this event is for anyone with an interest in this dynamic region.
Mark your calendars for 20 -22 March, 2018.
For any questions about the 2018 conference, send an email to firstname.lastname@example.org or visit the official website www.aseangaming.com
About All-In Translations
All In Translations is the only Language Service provider offering such a large variety of languages (70+) combined with a true enthusiasm for iGaming, hence their slogan “We speak your iGaming language”.
They are now a market-leading provider of language services to the iGaming industry. Their high-quality standards and service level are ISO certified and trusted by several of the biggest platform providers, developers, operators and affiliate marketers. The team helps companies like Playtech, William Hill, Betfair, Microgaming, Interblock, Betsson and many more to boost their online presence and grow their brands internationally.
The subject of iGaming has been their bailiwick since the company started up in Malta in 2008, meaning that all their linguists and project managers have both a strong knowledge of and a genuine passion for casino games, poker, sports betting, lotto, bingo, trotting, backgammon, roulette and more.
Visit their official website for more details: www.allintranslations.com
European regulators to ban binary options and crackdown on spread betting
European regulators revealed plans to outlaw one of the most popular trading products available to the public.
The European Securities and Markets Authority (ESMA) wants to ban the sale of binary options to retail clients.
The prohibition is part of a wider clampdown on the spread betting sector that would also see contracts for differences leverage (CFD) limits – the amount of risk/reward a retail investor can expose themselves to – dramatically reduced.
One year ago, City watchdog the Financial Conduct Authority (FCA), surprised the spread betting sector by unveiling its own plans to protect retail investors. A number of other European regulators followed suit and during this summer the matter was passed onto ESMA, so changes could be imposed Europe-wide.
ESMA said it will conduct “a brief public consultation in January 2018” on its plans. Once put in place, it would be the first time ESMA has used so-called “intervention powers” in financial markets.
The changes may come as a blow to some spread betting firms, which have booked bumper profits during 2017.
Others, of which CMC Markets has been very vocal on several occasions, believe the clampdown will help business by forcing rivals that focus on “lower-value” customers out of business.
William Hill airs concerns over NYX-Scientific Games deal
William Hill has said that it is to consider its options regarding Scientific Games’ proposed acquisition of NYX Gaming Group.
In September, Scientific Games agreed to acquire NYX for approximately CAD$775m (€525m/US$609.2m), in a deal it said would lead to the creation of a “global digital gaming and lottery powerhouse”.
However, William Hill has now said it will look in detail at the deal in regards to contractual rights it obtained when it enabled NYX to purchase OpenBet.
William Hill said “no decision has been made at this time” and, despite reports, “refutes in the strongest terms that any anti-competitive measure have been requested or is being demanded”.
The company added: “William Hill confirms that it has issued a conversion notice to convert its holding of convertible preference shares and has commenced legal action in order that it may also vote such shares at the special meeting of shareholders.
“William Hill does not wish to make any further comment on those proceedings at this time, other to confirm that it will continue to act in the best interests of its shareholders.”
William Hill owns and controls 6,800,000 ordinary shares of NYX and £80m of preference shares of NYX Digital Gaming, an indirect wholly-owned subsidiary of NYX.
Theses shares are initially convertible into approximately 40,723,339 ordinary shares of NYX, based on an initial conversion price of CAD$3.67 per ordinary share.
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