Angry Futurebet Licensee Speaks Out

An angry Futurebet licensee has spoken out.

This is an extremely interesting thread and should unveil some mysteries to the newbies on the board.

There are several observations one could make.

1) it’s interesting that the number-one client of this software vendor is grossing only about 100K per month (in the period cited). That should remove some of the blue sky expectation for some of you would-be operators who read about the big numbers and have similar expectations.
2) I share the opinion that the licensor royalty should be calculated after the processing expense. What some of you may fail to realize is impact of processing on the net cash flow. The processing fee (and charge-backs) are calculated on the gross, therefore assuming a 50% hold, the bankcard processing is actually 10% to 14% of net income (depending on the MDR and charge back rate). If you add a 35% royalty fee (which is outrageous in my opinion) to the 14% cost of processing, you are left with 50% net income to operate with.
3) This thread does not make it clear that the hold back is not an expense. However from a cash flow perspective, subtracting 10% hold on cleared funds (which now becomes 20% of the net income), the operator is now left with 30% cash flow to operate with. How in the world could he be expected to operate? Pay marketing costs, pay expenses, etc. Especially when there is a payment in arrears of 30 days increasing to maybe 6 weeks when things go off the banking rails upstream.

A couple of observations (free advice); you should be very wary of a deal where the software vendor controls your processing account. Find your own processing. It may take you awhile, but the solutions are out there. Secondly from this example you can see how difficult it is to operate on usurious royalty fees. As an operator, you are taking ALL the business risk. Meanwhile the software vendor is taking virtually no business risk whatsoever and he is creaming your profits.

As for this particular vendors claim that he spent 2 million in developing a gaming solution, they must have gone thru some costly learning curve. Decent programming can be bought for 30.00 USD per hour. Assume even 25% overheads on 2 million, that leaves 50,000 hours of programming at 30USD/hr. Go figure.

Negotiate your royalty fee so that it leaves enough cash flow to operate and get your own bank account.



Webmaster why are you removing my post that all im telling other investors out there which companies are good and bad. So far if you read some of them instead of deleteing it you would know that were are about 5 other people that agree with me. So dont delete the post. There are other people that post more than me, dont you think that is considered spamming. Im posting once a month or maybe once every 2 weeks. Depending if FUTUREBET will pay up. IF not than i will keep posting in every forum. So if other people out there see this thread deleted. just rememeber to post up the link of the FUTUREBET SCAM at www.7seascasino.com/global

Pay up futurebet and we will stop advertising you site. Im sure the word of mouth advertising is doing wonders for your company too.

Originally published in 2002

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