What Are White Labels and How Do They Work?

If you’ve spent any time at all in the world of online betting then you’ll doubtless have seen the term ‘white label’ used quite a lot. This is in reference to a company that creates a product, usually a sportsbook or an online casino, and then sells it to a different company that puts its own branding on top and advertises it as its own site.

Usually the brand owners behind white labels have an immense amount of experience about the world of online betting in general, often with links to gambling in other formats. They do it because they don’t necessarily want the hassle and responsibility of running sites themselves, but they do still want a cut of profits and letting a bigger company use their service is an ideal way of doing this.

White labels are in some ways like a franchise for betting, the brand owner pays for the service and attracts the users while the operator actually provides the product and manages the customer.

What Are White Labels?

There are plenty of people out there who wish to operate an online sportsbook or casino and yet have precisely no idea how to do so. How do you set odds? How do the online games work? How do gambling licenses work? How do you even build a site? These are the sorts of questions that people would need to ask themselves if they were thinking about opening a brand new sportsbook from scratch.

White label and third party platform providers take this stress away for the people and companies that want to offer a sportsbook and real money games to customers. They have all of the software in place, with the various companies offering different features, such as in-play and cash out. You can simply go them, tell them what you want your site to offer and they’ll sort everything out for you nice and easily.

How They Work

You can choose how much or how little of the process you’d like to be taken over by a third party platform provider. It might well be that all you really want to do is supply the branding to the site and have the white label take care of pretty much everything else.

Alternatively, you might already have a good idea what you’re doing and just need a little bit of help with certain aspects.  Either way the definition of a white label is a site that is operated by someone other than the brand owner and that means it is the operator holds the gambling license that makes them responsible for the customer, their safety and their funds.  The brand owner is largely just responsible for advertising, acquisition and incentives.

Different Levels of Service Label Available

Why Build A White Label?

The obvious question is why anyone want to use a white label in the first place. The answer, of course, is money. There are around 200 million people around the world who use the internet to place bets. It is an industry worth around £400 billion globally, so it’s hardly a surprise that some people might want to get themselves a slice of that particular pie.

Sport takes place over four continents, with millions of competitors taking part in various events. Put two flies on a windowsill and there’ll be someone looking to place a bet on which one will take off first. With that in mind, online sports betting is becoming more and more popular and companies want to be involved in the conversation over winning some of that money.

Just because there’s a will to do something doesn’t mean that there’s always a way, however. You might wish to be a part of the growing online betting industry, but if you have zero idea what it entails then you’re unlikely to be able to figure it all out on your own. That’s where white label providers come in, building the bridge between the two sides of that coin.

Even if you spent years developing a website that could take bets and offer various markets, the technology moves so fast that it might soon be way behind the times. Far better to ask someone else to take care of the nitty gritty for you, especially if that someone happens to be at the forefront of the world of online betting and keeping up with the day-to-day developments.

Frankly white labels are kind of like franchise models, you buy into the product and share the profits with the operator plus a fixed fee.  It requires minimal initial outlay as you don’t need to hire and employ people to run your site and handle your customers and you just focus on marketing.  This is the budget end of the betting industry but because the white label operator runs a tons of sites in tandem with the same system it means the quality is still good.

Making The Generic Into The Unique

The very nature of a white label site is such that it runs the risk of being entirely generic. White label providers aren’t stupid; there’s no money in creating a unique site for each customer. Instead what they do is provide each customer with pretty much the same skeleton and they are then able to add their own skins on top of it to personalise it.

There are automatic personalisations that take place in the order, of course. One company might want to allow customers to Cash Out, for example, whilst others won’t be bothered about that but will want to offer horse racing. One bookie might have a focus on banking options whilst another will be all about how deep the markets are that are offered.

It’s once the site has left the confines of the white label provider that it really begins to take on a look of its own. Obviously companies have their own branding and signage that they’ll wish to add to the white label software in order to make it their own, which is when the differences really start to show.

You can have two sites provided by the same third-party operator that will appear fairly unique. Perhaps the menus will look similar and work in the same basic way, but they may have a totally different focus or offer totally different services from one another and will have their own branding.

In fact, you might use both and not even realise that they’re in any way linked to each other.  It all depends largely on the operator itself.  If you look at two Progress Play white labels side by side it is obvious they are the same site, but as you climb the ladder and move away from white labels to licensed sites with thrid-party software you begin to see more individual characteristics.  SB Tech for example are one of the best at this.

How Much Do White Labels Cost To Set Up?

How much it costs to set up a white label site is one of those ‘how long is a piece of string’ type questions. The costs will vary depending on what sort of services you want to be provided by the white label company, but it’s fair to say that you’ll be looking at spending at least six figures even you only want to set it up in the most basic way possible.

If you want to do it properly, however, and operate a decent site then you’ll be talking around the £1 million mark. You’ll have to pay a set up fee, as well as the fee for a gambling licence. If you only want a sportsbook then that will be cheaper than if you also want a casino and bingo option, as an example. You’ll also need to factor in the commission that you’ll need to pay.

There’s no one size-fits-all answer to the question of how much it will cost because there are so many variables that you need to take into account. Basically, if you’re thinking of doing it and you don’t have either a large amount of money to do it with or an investor willing to give you said money, it’s probably not going to be possible.

A Lot Of White Labels Don’t Work Out

Unfortunately the nature of the industry means that gambling is highly competitive and many white labels don’t make it beyond a year or so before the brand owners start to reduce advertising and investment, leading to eventual death of the brand.

This is the budget end of the industry so you might expect a lot of brands might fail.  In fact, this is what makes a white label a good idea, with a white label the operator is responsible for the customer, which means if the brand fails the customer doesn’t lose out.  It effectively provides users with a way to try out a load of brands in a generally safer way than if each brand started up with their own license.

Still, white labels have been dropping away even more than usual in recent years and this is thanks largely due to the higher taxes in the UK now combined with tighter regulations around customer funds, verification and advertising – all mixed in with more and more competition and changing attitudes in general to gambling.  Operators have, in fact, been fined millions in the last few years for breaking rules around checking sources of funds and ensuring safe gambling.  This has caused many white label operators to start to pull white labels or even pull the service all together.

It highlights a clear issue between operators, who hold the responsibilities, and brands, who manage marketing and things like VIP clients.  In an age of responsible gambling these two worlds are becoming incompatible leading to several companies leaving the UK or closing their business to customer services,

EveryMatrix exited the UK white label market in 2019 following failings and others have reduced their number of brands.  Playtech even folded their white label sportsbook operation after failures by brands Winner and Titanbet that led them to lose their UK gambling license.

White labels are becoming more expensive to run in light of this, although it seems to be having a minor impact on the number of new brands emerging even if the risks of failure are now higher.  Progress Play are a good example of a company pushing hard into the UK white label market right now taking up the space left by other companies.

Again it is worth reitierating though that white labels can be safer than small independent brands.  There are a lot of examples of independent brands going bust and as they are the ones responsible for customer funds it means users don’t always get their money back.  A big example of this happening was in 2020 when MoPlay went under.

What Makes A Successful White Label?

Many of the white labels that do succeed have links to gambling in other ways.  A common example are land-based bookmakers and casinos that lend their brand name to an online white label run for them by a third-party.

This is a good arrangement as the land based operator doesn’t want to run a website so it is done for them but they are still a well resourced entity that understands the industry.  The existing branding also gives them a better advertising platform.

There are plenty examples of white labels that have had long term success and many get to the point where they apply for their own gambling license and will evolve to being independently licensed online but will still use a third-party platform.

Profitable white labels also rarely disappear rather it is common for brands to be sold between companies, meaning you might find the site switches platform and license but maintains the branding.  This is a good way to refresh a brand and one of the reasons it is done.