Microgaming Endures Two More Defections

The parties involved aren't saying much, but IGN has confirmed through sources that King Solomon's and English Harbor Internet casinos have severed their ties with software supplier Microgaming.

Microgaming announced earlier this week that two of its licensees stopped using its software, and that the company was no longer liable for any gaming activities conducted on the sites, but didn't specify which sites.

Company officials reached for additional comment had nothing more to say and deferred all statements to a press release the company distributed on Oct. 5.

The company didn't give a specific reason for the relationships ending, but pointed to what it referred to as high industry standards.

"It is well known that Microgaming imposes very strict regulation on its operators," the company said in the statement.

An official with one of the defecting casinos said that the decision was based solely on business. "Microgaming is pretty steadfast on their royalties," the representative said.

Claims have been made that Microgaming isn't bending on its royalties during slow times for the industry while other software companies are making amendments to work with their operators.

"They (Microgaming) are competing against software companies where royalty rates are substantially lower," an anonymous operator told IGN. "When you are in a growth market it is not a problem, but when you are in a declining market, which is what has happen in the last six months because of the credit card issues, it is a serious concern. You have to address it by either lowering your royalties or making adjustments and they aren't doing either of those."

IGN was also able to confirm through numerous sources that one of the defecting operators switched to software developed by Golden Palace Online Casinos, a former Microgaming licensee that now uses proprietary software. It's believed to be Golden Palace's first sub-licensee of its software. Officials with Golden Palace couldn't be reached for comment regarding the agreement.

OddsOn has also benefited from the defections. An official with the gaming software supplier confirmed that one of the former Microgaming affiliates is now onboard as a licensee, but the official declined to say which one by request of the client.

According to the River City Group's "Gambler Monitor" report, King Solomon's, English Harbour and Golden Palace are all among the ten most recognized Internet gambling sites.

Microgaming, a privately held company, hasn't commented on how its revenue numbers have been affected by the loss of the three heavyweight licensees.