Online Gambling Affiliates in the US: Preparation, Adapting Will be Key
There is an excellent report by John Mehaffey of LegalPokerSites.com on the legal landscape of online gambling in the US and how current affiliates with 10 plus years of experience may or may not be able to gain access. This, we at Gambling911.com believe, is a must read, especially in the wake of Nevada, New Jersey and Delaware legalizing Internet gambling within the US, albeit only inside their borders.
While Mehaffey correctly notes that the US market will be virtually untapped once US-based casinos begin offering real money online gambling, he also points out that established gaming companies are less likely to be as generous to affiliates as their European and Costa Rican counterparts have been in the past.
MGM, as an example, offers a 3 percent commission on hotel sales (excluding other amenities such as room service, Internet usage and food service). Most current online gambling affiliates are accustomed to revenue shares in the 25 percent to 50 percent range.
Some experts disclosed to Gambling911.com that these types of affiliate models have contributed to the failure of underfunded online poker skins in recent months and, as Mehaffey mentions in his article, most of the big name poker companies like PokerStars, Full Tilt, 888 and PartyPoker, already drastically watered down their own affiliate programs (888.com only offers a CPA program).
For affiliates to enter into revenue sharing deals with US-based Internet gambling firms, they themselves may need to apply for a license (at least in Nevada). A CPA model similar to that offered by 888.com might be one way around this obstacle as the affiliate is not technically sharing in the profits but rather receiving a payment for each registering new player referred to the site. Some companies could see this as a grey area. In fact, Gambling911.com has always viewed this model as a grey area when dealing with US-facing online gambling sites operating in other jurisdictions and has instead opted for strict media buys.
Marketing budgets will likely be large for publishers that produce unique content that ranks well for regulated online poker searches, Mehaffey notes. Content driven sites like Gambling911.com, PokerNews.com and CardPlayer.com will be valuable to US online gaming companies. Quite a few agencies retained by these gaming companies are already reaching out to Gambling911 to get their content featured on the site.
That’s not to say online gambling affiliates reliant on the revenue share model will not have a home in the USA.
Mehaffey’s piece assumes that the MGMs and Caesars and even Zyngas of the world will lead the pack when it comes to legalized online gambling in the US. That might be the case early on but quite a few of these companies operate as giant bureaucracies.
This week we learned that the Tribal casinos are looking to forge a relationship to bring their own brand of Web gambling to the forefront. The Seminoles in Florida have proven a formidable competitor to their long established and deep-pocketed Vegas counterparts a la the Hard Rock Hotel and Casino franchise.
History tells us that newcomers can easily move to the front of the line provided they have the proper resources and innovation, especially on the marketing front. Bodog and PokerStars were once babies learning to walk in a field full of relics the likes of BetOnSports and Paradise Poker, both of which 10 years ago were considered industry giants. Sportingbet, PaddyPower and Bet365 are UK examples of wagering firms able to build dominant brands in the shadow of more established companies like William Hill and Ladbrokes.
- Payton O’Brien, Gambling911.com Senior Editor