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Global removals and a new licensing strategy for turnkey provider
Last week we reported on the mysterious departure of CYOP Systems International head honcho Mitch White (the company has still not responded to several requests for more information on his move) and his replacement with Gaming Transactions and Red Felt boss Patrick Smyth.
It seems that Smyth is not one to let the grass grow beneath his feet, judging by the volley of press releases this week from the company announcing new moves in both a geographic and business strategy sense. The company is moving its headquarters to the United Kingdom, and its operational activities to Costa Rica, home to many online gambling firms but yet to introduce specific online gambling regulations.
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Changes in the laws in the United States regarding i-gaming payment processing and the impending licensing of i-gaming companies in the UK, are the reasons for the decision to move say CYOP spokesmen, who explain it is a "prudent course of action" and reveal that CYOP will be establishing a strong European base. The potential rewards are substantial - CYOP quotes analyst numbers showing that the EU gambling market is valued at about $70 billion.
CYOP's wholly owned subsidiary, Red Felt Software Ltd. is already domiciled in the United Kingdom, and has announced a new licensing strategy for the group.
In terms of this new approach, Red Felt will no longer take a percentage of net wagers from its US-facing licensees. Rather, it will take a fixed monthly fee covering the following services provided by the company:
Management of gaming software
Hosting and collocation of web servers
Hosting and collocation of gaming and transaction servers
Technical Support and Security Monitoring
By structuring the software fees this way, Red Felt believes it has positioned itself so that it will not benefit from wagering that occurs in the USA, and will therefore remain in compliance with the Unlawful Internet Gambling Enforcement Act of 2006 (included in HR 4954, the Port Security Improvement Act of 2006)
Non US-facing licensees will pay an upfront set up fee, a percentage of the net and a monthly hosting fee for:
Fully built gaming site
Non-Download gaming software
Real Time live reporting
Hosting & Server monitoring
Credit Card Processing
Smyth commented, "The company intends to target opportunities outside the USA enabling it to be amongst those first to market in emerging areas of opportunity. Given that North America is approximately two to five years ahead of the rest of the Internet world, there exists an opportunity for start-up ventures in areas such as Asia due to the relative ease and low cost of marketing as compared to the Americas."
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