WHITELABELS
Introduction
If you pay attention to the details of the sites of many bookmakers, you will notice a notification that reads “Powered by”. Many bettors think that it means that some big brand name created a sort of subsidiary for legal and mostly tax evasion purposes. To put it bluntly. Nothing could be further from the truth. It is actually a very old practice used in almost every industry. For what concerns our world it is a very common issue to all of the best European betting exchanges, though you can find some application in sportsbooks as well.
What actually happens is that new companies that enter the industry and can conform with certain prerequisites can take advantage of a simple trade agreement and increase their clientele easily and quickly.
A contract between two enterprises
Let’s assume that there is a well-established online gambling provider with a strong brand. Let’s call it “Tom”. Let’s also assume that there is a new company under the same niche without a presence in the industry. Let’s call it “Jerry”. Tom does not hunt Jerry as in the comics. He actually needs his services for any number of reasons. For example, there may be restrictions in operating in certain geographical areas, or the fees to acquire a license are too high to the point of absurdity. There may also be prohibition of monopoly concerns.
To resolve the situation Tom agrees with Jerry on the following. Tom provides Jerry with his know-how and with access to his products. Jerry brings in a similar liquidity and a blank slate. Jerry will use what Tom gave him to establish himself in the industry and Tom gets to indirectly operate in areas where he could not. It is a quite acceptable trading practice on every sort of business.
Two examples of such agreements between betting exchanges are Orbit Exchange and Fair999. They are both powered by Betfair.
The actual advantage of whitelabels
We have already discussed what’s in it for the two companies involved. However, there is a third party here: the bettors. For them, the perk is that they get to use the odds and liquidity of the establishment that they know. Only the name changes. Not the way of doing business. In fact, in some of those whitelabels, that process is better.
For the greater industry, whitelabels serve the purpose of expanding and covering the needs of more people out there, especially in areas where the practice is somewhat backlogged due to the lack of great brand representation. They get to open a betting account with a broker that they otherwise could not.