The Regulated US iGaming Market needs Affiliates to thrive

A shade over 2 years ago, Nevada became the first US state to legalise online gambling (poker). Since that time, we have seen the first legal poker site rise and fall, New Jersey and Delaware follow the Silver State’s lead, with the former accepting play on online casino games, and we’ve participated in an unmelodious collection of regulatory debates in states such as California, Pennsylvania and Massachusetts lobbying for, and against, iGaming legislation.

We’ve seen billionaire-funded attempts to roll the market back to UIGEA, or worse.

But most of all, we haven’t seen a lot of players.

We have to look at New Jersey in particular here. Plain and simple, you’re going to see Nevada or Delaware struggle to reach critical mass offering poker alone, even with player pooling just around the corner. Online casino requires less need for a tight ecology, but volume is still essential to ensure margins kick in effectively and true month-on-month growth can occur.

Comparing NJ with the Nordics

New Jersey has a population of almost 9 million – a shade under that of Sweden and very nearly twice that of Norway. The Nordics offer arguably the greatest micro-melting pot of player knowledge, value and conversion rates of any region on the planet, with player value of an online casino customer 75% greater than that of the established UK market.

Whilst EU law has allowed unregulated brands to advertise in Sweden and Norway’s National Government Pension Fund has billions of Kroner invested in offshore gambling, operators are restricted in a far greater sense in the way they can market to potential customers than licensed operators in New Jersey… with one exception.

The humble affiliate.

The portal owner, the email marketer, the blogger, the Facebook tipster, the forum moderator, the PPC whizz, the new-fangled app builder all represent the glue that has put Sweden and Norway on the iGaming map, driving heavily-critiqued competition – and consequently product and market understanding of the Nordic casino player.

It’s a glue that is sorely lacking in New Jersey. Hell, the way the market looks, a webmaster won’t even get a sniff at it for an ounce of financial stimulation.

It isn’t too hard to become vendor registered as an affiliate in New Jersey. This would see you sit on a relatively strict CPA deal, and you may garner enough traffic to get something prepaid arranged, or some other form of media-based deal.

But to sit on a revenue share deal, that’s an altogether less appealing process – a process that includes full ownership character appraisal demanding things ranging from your finger prints to your toddler’s savings account details and the need to bring in legal advice to get things done “cheaply”. Not the end of the world for many affiliates, but here’s the:

Million Dollar Question

Why would bother with the rigmarole if you can earn more money by sending money to unregulated online casinos?

This is the very crux of the ongoing UIGEA fallout that WILL keep regulated operators behind the curve until it’s resolved. Since 2006, offshore operators have relied almost unilaterally upon affiliates to acquire players. Here you have a classic chicken and egg scenario that probably weighed heavily on the Pennsylvanian legislator’s pen as he drafted a recent bill that would see a would-be affiliate need to stump up – cue Dr Evil – ONE MILLION DOLLARS to obtain a license to promote regulated poker.

The tangible association of the affiliate with illegal online gambling is there. Offer a viable alternative, even an incentive, to break those ties and, just like that, the problem of the offshore casino or poker room disappears for good.

Devil’s Advocate

For the sake of those not as intrinsically involved in marketing channels and budget as I am, let me throw some facts your way.

Google

Facebook

Amazon

eBay

are all affiliates. They receive revenue in return for advertising and selling products or services. The inexactness of existing legislation, or its interpretation, in New Jersey that permits pre-paid advertising on sites like NJ.com or sports sponsorship deals bwin.party has with the Philadelphia 76ers and the New Jersey Devils displays a commercial naivety at best.

Newsflash: these commercial arrangements can only happen if they achieve a return on investment – ergo their very existence is dictated by player losses and any renewal or continuation effectively sees the recipients earning out of players’ pockets. I’d love to see Mark Zuckerberg send his fingerprints to the DGE if we’re doing things “properly”.

One might argue the ins and outs of what is proper when it comes to the regulation of advertising, in particular online. The bottom line is stringent regulation stifles growth – not just for affiliates either.

Affiliates create Market Knowledge

A late-2014 survey conducted in New Jersey indicated that under 10% of New Jerseyites even knew online gambling was legal, which ought to be bonkers considering the plethoric nature of billboard and television advertising the moment you land at Newark or cross the Hudson from Manhattan.

But for me, it’s not bonkers. The advertising, I’m sure very well thought out by brand managers and agencies, pushes brand and price heavily – repeating the successes of software partner brands in Europe. The issue is there is zero differentiation on product and consequently zero in terms of tangible comparison for the customer. What’s more, there is zero requirement for the operator to improve product or service delivery. It’s a turn off of the highest order, made infinitely worse when a customer does come to research ‘regulated online poker’ or ‘regulated online casino’ product in the Garden State, the independent resources ranking highest still push offshore, unregulated brands.

The DGE, via complaints from New Jersey’s handful of fully licensed affiliates, has formally forbidden any affiliate operating using a vendor license (our friends on the low rate CPA) from advertising regulated brands alongside the shady, higher earners.

What’s an affiliate to do?

The choice is simple. Earn more now by ditching the regulated brands and see what happens in the future. Affiliates, particularly those still operating as one man bands, tend to be from the “make hay whilst the sun shines” school of thought. Unlike the rest of the industry, they’re not the sort to sit back, play by the rules in the hope that a panacea is delivered out of the stresses and strains of state-by-state lobbying and bill redrafting. Regulators may well be irked by this approach, but they only have themselves to blame.

The solution is simple. Give affiliates FREE access to the market, let them do what they’re good at – namely independently appraising good and bad practice of online casino and poker operators for the greater good of the playing public, providing the substance to branding and becoming the glue the burgeoning regulated US iGaming industry needs to make targets stick.

Regulators – welcome affiliates with open arms and in one foul swoop you’ll expedite the demise of offshore gaming, build market knowledge and create the critical mass your licensees yearn for.

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More Linkbuyer Fun and Games

Today

Mug Linkbuyer: hi
Me: hi there
Mug Linkbuyer: we are selling Gambling Links
Mug Linkbuyer: ?
Me: and?
Me: Mug Linkbuyer: if you are Intrested tel me
Me: interested in what?
Mug Linkbuyer: Gambing Links
Me: The sweat glands of a cow are in its nose
Me: now that is interesting
Mug Linkbuyer: tere maa ke choot
Mug Linkbuyer: now tat is intresting
Me: Maria isn’t a very Hindi sounding name
Me: I don’t buy links – I like doing affiliate deals that get me traffic
Mug Linkbuyer: ok
Mug Linkbuyer: Gambling affilates?
Me: yep. It’s what I do
Mug Linkbuyer: show me
Me: show you what?
Mug Linkbuyer:gambling affilate
Me: I was worried you were asking for something else there

Affiliate Management – How to Sell Your Brand

There are lots of ways in which one can sell a brand. That brand has no doubt undergone some form of brand development to firmly attempt to establish said brand at a pivotal position in the brand’s chosen market. And the brand’s products and services have no doubt been thoroughly conceived and implemented to create a full suite of delightful offerings to prospective and existing customers.

So why then, would they trust you, a badly lazy individual, to spearhead the launch of your service to the affiliate community. The company’s only be going a short while, so it’s not like you’ve even had time to become disheartened enough to completely disengage from all sense of positive action and attitude. I’m sorry, but it is “efforts” like this that keep affiliate managers, in general, at junior to middle management and affiliate programs as the cheap alternative to proper marketing in the eyes of senior management.

Well done sir.

Click the image below if your eyesight isn’t up to scratch…

Dealing with Douchebags

[10:02:58] Affiliate X: Hey Tom, how are you? Jsut a quick follow up with you to see if you had chance to go over the email with the offer we discussed for our facebook tipping page last week?
[10:03:14] Tom Galanis: hi mate
[10:03:20] Tom Galanis: I don’t think I received it
[10:03:26] Tom Galanis: could you send again?
[10:04:09] Affiliate X: Sure, give me a few mins. Will let you know when I have sent it
[10:08:56] Affiliate X: Resent, please confirm you received it. Cheers
[10:09:25] Affiliate X: From XXXXXXXXXXXX@gmail.com
[10:11:55] Tom Galanis: received – could you tell me the following: how big is your email database? how many are active?
[10:12:25] Tom Galanis: bottom line is this – from your proposal, any one of my clients is going to want to work on a CPA basis if you are “guaranteeing 10 customers”
[10:12:53] Affiliate X: It is basically people off the page who have signed upto receiving the horse racing email tips from us. There is around 200 at the moment
[10:12:53] Tom Galanis: I can’t see anyone going for the £500 flat fee
[10:13:19] Affiliate X: Ok mate, I can’t do anything on a CPA basis as we have a few prepaid deals on there and obviously they take priority
[10:13:27] Tom Galanis: to give you an idea, I get anxious about signing off £500 flat fees for a mailshot to 200k databases
[10:13:52] Tom Galanis: 200 potentials is not going to excite them, I’m afraid
[10:14:09] Tom Galanis: so tough to monetise facebook traffic
[10:14:13] Affiliate X: Sure, but it is not just the email that they will be being promoted on mate
[10:14:36] Tom Galanis: I appreciate that, but I can’t see anyone getting 10 customers from the facebook page
[10:15:08] Affiliate X: bxx3xx have with us and Wxxxxxx Hxxx have been working with us for about 2 weeks and have 4 new depositors
[10:15:59] Affiliate X: Not sure why you don’t think any new depositors will come from it. You can’t get anymore targeted to people on a tipping page, can you?
[10:20:10] Tom Galanis: well, how are you generating traffic?
[10:21:07] Tom Galanis: I could get 1045 people to like my dead dog’s funeral page – the question is, how active are they?
[10:21:49] Affiliate X: Mainly through liking comments on other betting related pages which results in them coming to our page and liking ours. You can see how active they are by looking at the page mate
[10:23:00] Tom Galanis: If you’re confident, why not work on a CPA or a revenue share?
[10:23:16] Tom Galanis: I could even give you a percentage of the turnover with one of my clients
[10:23:21] Tom Galanis: far more lucrative
[10:24:07] Affiliate X: The only reason is because I have prepaid deals with 3 other clients and obviously I want to keep them happy and deliver more players for them so they renew with us
[10:24:14] Tom Galanis: I’ll be honest with you. Most affiliates wanting a £500 flat rate – and I’m not labelling you as one – do nothing to warrant it and operators rarely see a return
[10:24:32] Tom Galanis: If you were using the funds to personally fund prizes, then great
[10:24:52] Tom Galanis: so your clients include bxx3xx?
[10:25:30] Affiliate X: I am running a campaign for bxx3xx through a betting portal and I am working with Wxxxxxx Hxxx direct
[10:26:04] Tom Galanis: which portals do you have? I notice a few linked to
[10:27:07] Affiliate X: I don’t have any sites but we have a few being built as we speak. I mean it is a guy that owns a betting portal that is running the bxx3xx campaign through us
[10:27:18] Tom Galanis: Jxxxxxx Bxxxx?
[10:27:41] Affiliate X: Not with the bxx3xx campaign but the racetips and bettingon sites we promote yes
[10:27:56] Tom Galanis: how does that deal work?
[10:28:04] Affiliate X: Flat rate for a month
[10:28:56] Tom Galanis: so how do you make money from bxx3xx?
[10:29:40] Affiliate X: The guy who has the betting portal paid us for 10 new depositing players, like the deal I mentioned to you. We delivered the 10 players and now he has renewed with us for a further 10
[10:29:56] Tom Galanis: ah ok
[10:29:58] Tom Galanis: I see
[10:30:23] Tom Galanis: surely, my interest is dealing directly with them then?
[10:30:37] Tom Galanis: I’ll be getting traffic from their site and also from you
[10:31:00] Affiliate X: Not sure what you mean mate?
[10:31:43] Tom Galanis: well, if I already have a deal in place with the betting portal, I should mention that we’d be keen on seeing some more Facebook traffic
[10:31:48] Tom Galanis: and he’d do the deal with you
[10:31:56] Tom Galanis: takes an element of risk out for me
[10:33:40] Affiliate X: I am not sure he would as I asked him if he wanted to run one of his other brands and he said he just wants to run one at a time
[10:34:25] Affiliate X: It’s totally your call mate, if you want to speak to your clients and see what they say then do it but if you don’t feel comfortable with it then leave it. As I say mate, it’s totally your call
[10:35:48] Tom Galanis: if you’d consider a CPA deal, it’s workable
[10:35:58] Tom Galanis: from your perspective, I can’t see how your model is sustainable
[10:36:10] Tom Galanis: and operators won’t pay an affiliate who isn’t going to hang around
[10:37:32] Affiliate X: I am here for the long haul mate. What makes you think I am not going to hang around?
[10:40:09] Tom Galanis: I can see that’s your intention – but your model isn’t sustainable
[10:40:21] Tom Galanis: bookmakers won’t keep paying you £500 a month
[10:43:01] Affiliate X: It is not necessarily every month. It is when each 10 new punters have been delivered and if we continue to deliver the punters I can’t see why the bookmakers wouldn’t want more?
[10:43:50] Tom Galanis: Surely you would prefer a £51 CPA?
[10:44:55] Affiliate X: Yes, but not while we have prepaid deals in place as they take priority for obvious reasons
[10:45:10] Tom Galanis: but you would earn more money from that CPA?
[10:45:34] Tom Galanis: my point is – eventually, this model will stop delivering players
[10:45:48] Tom Galanis: and you’ll be indebted to bookmakers
[10:45:56] Tom Galanis: I assume you’d pay them back
[10:46:05] Tom Galanis: but others might be a bit more sceptical
[10:46:23] Affiliate X: Yes, but I am not sure why you think it will stop delivering players when there is between 30-50 new likes coming in per day?
[10:46:36] Tom Galanis: a CPA deal offers them security, build trust and a sustainable partnership
[10:48:40] Tom Galanis: the way a lot of affiliate managers will see this is – £500 – that’s not a lot of my budget is it? But if he gets 6 of those deals in every month, that’s a £50k salary
[10:48:49] Tom Galanis: let’s be honest here – the page isn’t a lot of work
[10:49:00] Tom Galanis: 1045 likes doesn’t get me a return
[10:49:24] Tom Galanis: I’m turning down upfront deals for websites that rank 2 or 3 on google for some unbelievable keyword terms
[10:49:57] Tom Galanis: they are far more stable and get considerably more (roughly 1000x) traffic than your page
[10:51:29] Affiliate X: Sure mate, as I mentioned it is totally your call. I am not forcing you into anything but just trying to get my point across by telling you the punters won’t dry up with more new people coming on the page on a daily basis and they are all targeted not just people that are interested in other things but they are interested in betting
[10:53:10] Tom Galanis: I’m sorry. It just won’t work for any of my clients. It’s an unsustainable model and I cannot believe Wxxxxxx Hxxx and bxx3xx are paying to be sat there. Best of luck, but I’m out
[10:53:26] Affiliate X: No worries at all mate
[10:53:33] Affiliate X: Best thing for us to do mate would probably be, if we have any CPA deals become available then to give you a shout but at the moment I can’t run a standard CPA deal over prepaid deals when I have promised players to those that have already paid me
[10:54:42] Tom Galanis: Realistically, you’ll be looking at a £10 CPA from most bookies – customer value from Facebook is so low
[10:55:26] Affiliate X: For what reason is it low?
[10:56:31] Tom Galanis: Customer Values from Facebook are low
[10:56:40] Tom Galanis: bookmakers have stats on all of this
[10:58:42] Affiliate X: Ok mate, we have had a couple of good redepositors across the 2 brands we are working with
[11:01:51] Tom Galanis: 2 redepositors isn’t going to cover £500 though…
[11:02:17] Tom Galanis: you need to remember that bookmakers will be expecting to make at the very least £1500 from a £500 spend
[11:02:39] Tom Galanis: 2 good redepositors won’t do that for anyone, on average
[11:03:10] Tom Galanis: you’ll need to be very lucky – and some of the best affiliates I know have not made that luck through facebook
[11:04:42] Affiliate X: It is 2 good redepositors over a 3 week period, what if another 2 good depositors come in another few weeks, then another 2 and so on?
[11:05:21] Tom Galanis: what if indeed
[11:05:34] Tom Galanis: why not work on a revenue share deal?
[11:05:47] Tom Galanis: this is my point – if you’re confident, you’ll earn more money that way
[11:06:39] Tom Galanis: you’ll also have the bookmakers’ support on any future work
[11:06:43] Tom Galanis: the site, for instance
[11:06:56] Affiliate X: We are confident but we are tied to these deals at the moment as I mentioned and as I said if we ever have any room for a CPA/Rev Share deals then I will contact you but for now we are tied to these deals and our priority is to deliver for them
[11:08:08] Tom Galanis: sincerely, best of luck with that – my advice would be to focus on delivering for Wxxxxxx Hxxx. Those guys are pretty ruthless when it comes to getting money back
[11:09:17] Affiliate X: We are over halfway to delivering what we promised to them mate and they have only been running with us for 2 weeks, in another 2 weeks the first campaign will be done and dusted
[11:09:28] Tom Galanis: great stuff

Escalation: Argentine style

This is my story of the week. The UK sends Prince William and a f*ck off destroyer to the Falklands and the Argies, realising they do have a considerably weaker armed force (unlike 30 years ago) have decided to hit us where they know they can beat us. Football.

They have renamed their football league the General Belgrano League. Superb.

Now watch the UK bookmakers hit back with specials on last year’s General Belgrano Division 1 runner-up Lanus’ Copa Libertadores clash with Brazilian side Flamenco:

“If Flamenco sink General Belgrano side Lanus, we’ll refund all losing bets”.

I’m copyrighting that one by the way…

Gross to Net Deductions justified at Betfred Casino

To all affiliates who (love to) question the deductions operators make when taking their gross win numbers to a net revenue on which affiliates are paid, take a look at the latest press release at Betfred, where an affiliated customer nailed the Beach Life slot progresssive yesterday for the tune of £5.1 million.

Now, progressive jackpot contributions made by operators are often bundled into this gross to net conversion rate at a fixed percentage. Try telling the affiliate whose player hit the jackpot that this isn’t worth it… imagine seeing 30% or so of £5.1 million coming off your earnings.

Said affiliate would stand to gain from any of the money the player decides to drop back to the house too.

There was a recent thread on GPWA explaining a recent change to Betfred’s gross to net conversion (for the better actually) that caused the odd infuriated post to emerge.

Justice for the affiliate program and the affiliate manager on this one

Entry for Email Put Down of the Year

Hi So and so,

No it is not. You are not allowed to bet through your affiliate account, which I will now be closing with immediate effect.

Regards,

Tom Galanis

—–Original Message—–
From: So and So [mailto:soandso@soandso.bg]
Sent: 09 December 2011 06:03
To: Affiliates
Subject:

Hello! I have a personal betting account with you and affiliate account with user name soandso. I want to ask is a possible to recieve any commissions / negative or positive/ and from my own bets that i made in my betting account?
Thank you!