IS Black Friday GOOD OR BED FOR AFFILIATES? IT DEPENDS ON WHO YOU ASK...


the initial feedback from affiliates seems mixed but generally positive


Although Black Friday primarily impacted players and the online poker sites that were still operating in the US post-UIGEA, there is another group of people who are feeling the aftermath of the DoJ's actions: affiliates. While the full impact isn't known at this time, the initial feedback from affiliates seems mixed but generally positive.

IS BUCK FRIDAY GOOD OR BAD FOR AFFILIATES.' IT DEPENDS OH WHO YOU ASK...

ONE OF THE REASONS that affiliates appear to remain optimistic is that most seem to feel that they are not necessarily at legal risk. As the main thrust of the charges against the online poker sites was associated with bank fraud and money laundering, many affiliates feel that the risk to them is rather low.

Another reason is that affiliates have more options available to them. Unlike many furious players, affiliates can continue to promote Full Tilt, PokerStars, and Cereus (Absolute Poker and Ultimate Bet) to their non-US traffic. Likewise, some see a short-term opportunity to move players from the big-three sites to smaller sites that continue to operate in the US.

Impact

However, everyone will feel some sort of impact. According to PokerTracker the net change so far at Stars, Tilt, and Cereus has been -28%, -35% and -65% respectively. This will translate into lost income for many affiliates.

Affiliates who focused on non-US customers as well as those who promoted other brands will feel the impact the least. In fact, longer-term, they may come out of this recent shake-up in better shape than before. Several affiliates are on a shopping spree at the moment, buying up smaller websites hoping to use their expertise in non-US markets to turn the sites around.

There is also optimism that this major industry shake-up may reverse the trend in the operator/affiliate relationship which has mainly been negative for affiliates, with poker sites paying out less, becoming more creative in what constitutes a marketing fee and tightening player qualification requirements.

Level playing field

With PokerStars and Full Tilt no longer able to use their US player base to fund customer acquisition in less profitable markets, their competitors are energised and feel like they have a fighting chance on a more level playing field. They're also looking to take advantage of the inherent chaos that results in an industry-changing event like Black Friday.

While Full Tilt and PokerStars executives are preoccupied with meetings about whether or not to lay off staff, what to do with their roster of paid pros, which long-term projects need to be shelved, and simply coming to grips on where they take their business going forward, their competitors are reaching out to affiliates, increasing bonuses and doing everything they can do steal business away from them.

It's unlikely anyone will unseat Stars or Tilt in the near-term as their player bases are still very strong, even after the player losses in the US, but it will be a tougher slog going forward. Greater competition between the poker sites can translate into better deals for affiliates who will play a bigger role in the battle. Many of the non-US facing rooms have been reaching out to affiliates with special offers, a move that is being warmly welcomed by affiliates.

Affiliate outlook

But it's not all roses for the affiliate community. Many affiliates, especially those that are US-based, are reporting problems getting paid out. Because some sites either credit the affiliate's player account or give them an option to cash out their monthly earnings to their player accounts, this could be problematic for those affiliates, not just now, but going forward as well. For instance, as part of its new cash out policy to refund its US players, PokerStars is insisting that players cash out the entire balance of their account. However, once the account has been liquidated, whether Stars will allow players to access their accounts and how this would apply to a US-based affiliate who has MGR customers is currently unclear.

It should come as no surprise that many affiliates who were too narrowly focused on a particular room or US-centric niche don't have as positive an outlook as other affiliates. For many of them, their best course of action might be to sell out to affiliates who can still market to Stars, Tilt and Cereus, or change their tactics and begin targeting non-US traffic.

While it may be many months or even years before we know who the winners and losers are from Black Friday (and there mav be many twists and turns to come), at the moment, it is looking like affiliates who can weather a short-term loss in earnings and focus on the long-term potential of a market in flux may come out on top.
 
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