My hosting business is purely as a reseller. It's very important to me that my clients do not know that however.

A client who has several accounts with me now asks about opening a new VPS account for a purpose that my supplier "officially" doesn't allow but I happen to know that in many cases they turn a blind eye. I don't want to say what it is, but let's say it's running gaming sites. If someone has a gaming site as long as it doesn't cause any problems on the server, even if my supplier sees it, they won't say anything.

But the minute it DOES cause a problem, they might tell my client (my supplier provides support directly to my clients via a white-label support site) that "We don't know allow gaming sites" and then I look stupid when the client says, "Huh? Our host CaptainBlueBeard said it was just fine."

Not only do I look stupid but my supplier might get upset and say "Sir, why are you telling your clients we host gaming sites when this is explicitly against our policies, as you well know?"

So I guess I will tell this client of mine that CaptainBlueBeard's policy is that

We "officially" don't allow this but if it doesn't cause any problems, then we turn a blind eye.
Unless someone has something better to say.