Online gaming: Gambling on a third party service

While St Minver is not a well-known brand in its own right, the pan-European, multi-currency business operates online gaming and gambling for 96 partners including household names such as Yahoo! Games, Telefonica, lastminute.com and Virgin Games.

Working with a "white label" business like St Minver suits organisations such as Yahoo! perfectly, believes Leigh Nissim, managing director of St Minver UK. "If they want to provide things like holiday booking engines and job boards, they can increasingly go to another company to provide an unbranded out-of-the-box - otherwise known as 'white label' - solution. We put a skin round it to make it feel and look like Yahoo!, although in reality it's a third-party service."

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Nissim explains that companies such as Yahoo! are able to use their high-profile names to gain trust - an essential factor in gaming. Meanwhile St Minver brands all the different games, and necessary websites to provide those games, for the company and works out a marketing plan. "The customer actually deposits their cash and plays the games with St Minver, but it's all via the host brand," says Nissim. "We also look after issues like fraud, security, customer service, financial risk, payouts and chat management."

It is this potential for an effortless partnership on behalf of the host brand that Nissim believes has enabled St Minver to grow rapidly as a business since its origins in 2003. Indeed, the company, which now has 110 employees, made £1.7m profit alone last year.

Another major factor contributing to the firm's success is that St Minver pools players for the various brands it works with from right across Europe, he says. "Pooling - more commonly known as liquidity in gaming - is a very important concept because the higher the volume of players that you have, the more players you attract."

St Minver was formed in September 2003. "Our chairman Gary Shaw had a technology background and could see the potential of internet casinos," explains Nissim. "So he joined Victor Chandler to deliver white-label deals that weren't a million miles away from what we now deliver. But with Victor Chandler, it was never the core of their business, so Gary decided to set something up on his own and he bought out that business with another investor who has an interest in high technology companies."

At the same time, St Minver entered into an exclusive agreement with Boss Media, a listed gaming software developer, to operate the poker network. "As a company, we have a policy not to develop games ourselves because we believe the skill-set for operating games and writing them are very different," says Nissim, who adds that as such they use different software developers for each aspect of their gaming portfolio.

The big-gest challenge was getting the gaming licence. "These aren't easy things to get, but we managed to get one of only 14 licences in Gibraltar. This was essential to getting decent banking which in turn is essential to getting customers." By January 2004, St Minver was running online gaming and gambling for the likes of lastminute.com, while also growing Gala casinos, Gala bingo and poker.

Bearing in mind that a lot of the technology in place at this point was poor and new, it was a stressful year, admits Nissim. "Sometimes, it all fell down and hundreds of people would be left screaming because they were in the middle of a game. But you iron these things out by virtue of experience."

By 2005, St Minver was building up its portfolio of branded customers and it also proceeded to build a pan-European bingo network. "It was that year when we started to spread our wings into Europe and by the following year, we'd got into areas such as Sweden and Russia," says Nissim.

As for the future, St Minver's aim is to widen its games portfolio further by introducing black jack tournaments and of course, to get more big brands on board. "We are also looking to stretch our geographical reach to areas such as Latin America," says Nissim.

It's not all plain sailing, he admits. "I would say technology is the big ongoing test for us. You have to tailor all the software - for which we use a provider - and mould it to the relevant brand. That's not easy."

Recruitment is not without its obstacles, either. He says that rarely do people have all the skills St Minver needs. "For instance, we recently wanted someone to run our online bingo, but there are only a handful of people who do that worldwide. So you have to get someone on board from bingo halls and casinos who have no online experience, and train them up, which has its own set of challenges."

Also difficult for St Minver is the fact that it's not a high-profile name itself. "When you're talking to a prospective customer, there's a good chance they won't have heard of you," says Nissim. "Then there's the fact that there are other online gambling companies who are prepared to offer a £2m or £3m cheque to buy an advertising deal rather than build the brand's content with custom-branded games as we do. My difficulty is therefore convincing the customer that he shouldn't take the cheque today because it's a short-term approach and that they should focus on building £10m-plus in revenues and a customer database over a longer period."

But he's not too worried: "We have a proven track record of understanding customer brands and working with them, and that's our main strength."