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Standing Tall

As the importance of affiliates grows in iGaming, the need for an organization that can vouch for its members increases.

Standing Tall

It was 10 years ago that online gaming was introduced in New Jersey. During those 10 years, the state has become the leader in online gaming in the regulatory scheme, the variety of games offered to players, and the transparency of the data that comes with iGaming.

At the dawn of iGaming in New Jersey, GGB formed an affiliate marketing company, iGamingPlayer.com, that we believed would be a huge success. I had covered iGaming in Europe since the late 1990s and seen how important affiliates were to the online gaming industry. Legitimate affiliates delivered qualified players and, in most cases, provided content that educated those players about how to play the games, what the rules were, and why it made sense to play at licensed and regulated sites rather than the gray- and black-market sites that were unregulated and answered to no one if the player had a beef.

Now to be sure, there were plenty of affiliates that delivered players to those gray- and black-market sites for exorbitant fees, but we knew the U.S. market would not be that wide open, especially in New Jersey, where regulations were fairly strict, but fair.

It was lonely to be an American affiliate. The existing overseas affiliate companies and individuals weren’t eager to go through the licensing process in New Jersey because it was somewhat costly, but also very complete, so any relationship they may have had with the gray- and black-market sites could be problematic.

So along with Jon Friedberg and Melissa Blau, two people who had started their own U.S. affiliates, we agreed that a professional organization was needed to guide the newly formed or foreign affiliates willing to enter the U.S. market. The organization, which we dubbed SiGMA (the Society for iGaming Marketing Affiliates) would offer advice on licensing and best practices, and provide a stamp of approval that may influence licensing or regulatory approvals.

Well, all did not go according to plan. First of all, the operators were wary of affiliates to start with, so getting them on board proved to be difficult. And if you didn’t get them on board, the entire idea of an organization representing affiliates slowly fell apart.

In the 10 years since legal iGaming was introduced, there haven’t been many changes. New Jersey was joined by Pennsylvania, West Virginia and Michigan in hosting iGaming sites. And Ontario just joined the list in the last few months and has proven the strength of iGaming—as opposed to just sports betting. Ontario has produced massive amounts of revenue for the province, with over 85 percent of that revenue coming from casino games, not sports betting. One of the reasons iGaming hasn’t expanded more widely are misconceptions that a SiGMA-style organization could fix.

We’re also seeing a backlash against some of the advertising online casinos and sportsbooks are creating. This should emphasize the importance of affiliates who can deliver qualified players, since the tried-and-true advertising vehicles the operators used may get taken away by legislation.

So the idea of an association representing affiliates has come up again. There still are the “bad” affiliates that work with offshore sportsbooks and casinos, none of which answer to any regulatory agency or government. Now some of these “gray” area affiliates have licenses granted by some offshore government entity that resides on remote islands in the Mediterranean or the Caribbean, whose main attraction is not their thorough regulatory schemes but the inexpensive licenses they offer.

As the importance of affiliates grows in iGaming, the need for an organization that can vouch for its members increases. At iGamingPlayer.com, we welcome regulatory scrutiny. We’ve experienced some unethical actions by operators who “steal” players we delivered to them or claim that the players we’ve brought to them in good faith, and in accordance with our marketing agreement, suddenly become theirs and they halt the revenue share we agreed to at the start. When we report these instances to the regulators, we get shrugs if not complete disregard.

Affiliates need an organization to stand up for them and represent their best practices and transparency. There are some very large and some quite small companies, but we’re all in the same business, and we need to stand up and show how affiliates can help operators and the states where iGaming is legal. Let’s not wait another 10 years.

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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