Affiliate marketing in Europe has been one of the most successful methods of growing online gaming in that region, accounting for anywhere from 25 percent to 35 percent of new player acquisitions. Affiliates compile lists of potential players and refer them to online casinos in exchange for fees of various kinds.
Nicky Senyard is the queen of affiliates. Her company, Income Access, helps compile the information that affiliates rely upon to collect their payments from online casinos and to confirm that players are indeed active. But the affiliate system will be much different in the United States because of the stricter regulations and fewer methods to acquire qualified players.
“Affiliates are an important piece of the iGaming world for three reasons,” she explains. “First, it gives the operator free exposure on a site with good traffic. Secondly, it gives them a third-party endorsement because the affiliates are independent. And finally, the affiliates usually have very specific niches and expertise that the operators do not have. So, when you combine those three things, and add the fact that affiliates are only paid upon successful registration, it becomes a very interesting business model.”
Affiliates are more than just a marketing device for the operators, says Senyard; they are partners.
“The affiliate doesn’t get paid unless he delivers a qualified player, so it is to the affiliates’ benefit to bring the best players to the operators.”
Affiliates have been compared to player agents or junket operators in the land-based casino environment.
“Just like junket operators, affiliates in Europe often get a piece of NGR (net gaming revenue), called revenue share,” she explains. “Affiliates can be paid in numerous ways. NGR is the predominant one, but there are other ways as well, usually CPA (cost per acquisition), which is a fee paid when a player signs up with an online operator.”
Unlike Europe, where affiliates are rarely required to be licensed, the three states that have legalized online gaming do have licensing requirements of some sort.
“Regulators are doing something very wise,” says Senyard. “They want to understand how players are acquired so they require either registration or actual licenses. To do any sort of revenue share, a license will be required.”
Those regulations are going to make the affiliate world in the U.S. somewhat different from Europe, according to Senyard.
“I see affiliates in the U.S. playing a very important role,” she says. “The extent of that role is going to change over time. The regulatory requirements are going to thin out that market and increase the cost for the operator, which I think is an unintended consequence.
“For that reason, the regulations might, might, change. What regulators are trying to do is valid and appropriate, but I think that when they find how this is going to spin out, it might evolve.”
Income Access plays a vital role between the operators and the affiliates.
“Income Access has a tracking protocol that actually manages affiliate programs,” she says. “We can learn what creative has drawn a player in, how much they have deposited and how much they have played on a daily basis, all related to an affiliate account. Regulators are just becoming aware of technology like ours, so that over time this may be a reason why specific regulations may come down in their intensity a little bit, because it offers complete transparency.”
Senyard understands online gaming and the relationship with affiliates, because she entered the industry in 1999.
“We realized there was a need to manage affiliates, so we developed the technology,” she says. “In Europe, we are currently managing more than 200 brands, and we expect to be as successful in the U.S.”