THE FUTURE FOR AFFILIATES JN A CONVERGED INDUSTRY


The regulation of markets in Europe and, more specifically, the US is pointing to a period of convergence that will see US land-based gaming brands integrating with the expertise of the European online operators.


Converting affiliates

So now we have it: the ‘new beginning’. Black Friday heralded the prospect of regulating US online gambling, and we didn’t have to wait very long for the first major deals to be signed, sealed and announced between US land-based giants MGM and Boyd Gaming and European online operator, bwin.party. This menage a trois is the first step towards an integration of European online expertise and US brand recognition, as well as a huge potential client database to go after, once online gambling has been regulated in the US. Rich pickings for some...

This development is not only long overdue, but also sees a way out for what some might regard as the narrow-minded EU approach of having tiny unprofitable national licensing regimes: who cares what the EU Parliament decides once the US market is open? Do people honestly care if Poland is banning online gambling? Do people really care if the German Lander might finally get a grip on reality if the US market is ripe? The answer is clear and the writing is on the wall: go west and leave the highly regulated and fragmented EU landscape behind... welcome to online gambling in Nevada!

But what do these developments mean for affiliates? How will affiliate marketers deal in a highly regulated iGaming industry? And how can affiliates prepare for the convergence of online and land-based gaming brands? Don’t yawn and roll your eyes - it concerns you. Yes, you! It is going to happen you know, (trust me, I’m a lawyer).

Uncertainty

The simple question of ‘language’ becomes an issue: offering affiliate sites in various languages to increase exposure and establish a brand in a particular jurisdiction raises the financial value and attractiveness of these affiliates. But some European countries already regard the use of their local language on websites as targeted advertising, leading to heavy fines and criminal penalties, regardless of where the affiliate is located. It is no longer just the online gambling operator who is at risk, but also those who advertise gambling products. In this context, some might say that affiliates today are where gambling operators used to be: in a constant state of uncertainty, having to remain consistently vigilant to avoid falling foul of any regulations. Staying away from these jurisdictions, however, is not the answer, because others will go the extra mile and become an invaluable asset to online gambling operators in these countries. Confused? Frustrated? Perhaps it’s time to leave Europe behind and see what the US has to offer...

“Some might say that affiliates today are where gambling operators used to be: in a constant state of uncertainty, having to remain consistently vigilant to avoid falling foul of any regulations.”


Whether we like it or not, developments in the US, including land-based brands going online, means that casino affiliates

must become a bit less ‘spamisticated’. Needless to say, affiliate marketing for betting products has come a long way, but it is time for its casino counterpart to follow suit. But before we go down the path of no return, it is worthwhile considering how important reputation, land-based marketing skills and conversion of land-based and online clients are for the future of online gambling.

This is also evident in Europe, where several land-based casinos, supported by non-EU compliance legislation, are the only ones who can go online (did I say Belgium?). The main issue for all land-based operators is reputation and discretion. Some of them have been around for more than 100 years, totally missing the introduction of universal suffrage or indeed the creation of the EU. However, their client base, an increasingly international set, want to be entertained 24/7. So what’s the problem? Hook them online and let the party begin? Well, unfortunately, life is a bit more complicated than that.

Personal data

Advertising online is an art in itself and the successful affiliates already know everything there is to know about this. Land-based marketing is also nothing new, neither are the ideas of converting land- based clients into online clients. In fact, the subject is as old as mobile gambling, neither of which has kicked off. And this article is not even pretending to predict the new wave of land-based conversions - because it is going to happen! What affiliates need to know, however, is that land-based operators may not feel comfortable at all in sharing their precious customer data with online operators and their affiliates to market to the existing casino customers. No casino in Mayfair would want to be associated with website advertising of what might be perceived by some as a dodgy low class entertainment (they’re not desperate enough yet...). Neither is MGM interested in sharing its enormous customer data with that type of casino.

With all these new developments and buzz words like ‘trafficking’ and ‘sourcing’ and ‘targeting’ and ‘social media’, one can easily forget that it is (or should be) all about the consumer (or more accurately, about the consumer’s personal data). Until now, ‘traditional affiliates’ managed to stay far, far away from Personal Data, simply promoting online operators and leaving the headache of what can and cannot be done with this data to the operator instead. The scary concept of Data Protection comes to mind, with all its associated rules and obstacles - an ugly and boring concept for some, but essential and valuable for many. The Information Commissioner now has extensive powers to fine Data Protection breaches and did not hesitate in imposing a fine of /100,000 on a UK company for loss of customer data.

Data Protection has not stopped online gambling operators from generating profits, nor has it stopped their customers from using their sites. The same principle applies to social media networks and, to a lesser extent, blogs as well. If, therefore, the future or part of the future lies in exploring social media further, affiliates will have to get used to the idea that Data Protection matters. In fact, gambling affiliates, with their expertise of online affiliate marketing for a niche gambling sector, are perfectly placed to lead these social media sites and create their own distinctive brand and customer following, incentivising interested visitors to register with them and retain a customer following that will undoubtedly make them more of an equal partner to online gambling operators.

However, the tricky part is getting established land-based operators to part with their customer data - some of which has not even been computerised yet! Therefore, data processor and data controller agreements will be part of any conversion package to ensure the safety of existing customers in the future.

One of the most valuable assets in online gambling is access to player data and it is therefore no surprise that online gambling operators guard this data jealously, often refusing to share information with their affiliates, who generated these users for them in the first place. Land-based operators are not much better and the data they hold may not even be worth converting, however, it’s all about brand image and about increasing the existing offering to the online community.

With the correct legal and regulatory understanding of advertising rules and data protection guidelines, affiliates should be in a most favourable position to conquer social media, blogs and expand their offerings to other jurisdictions as well.

It is a small step for man, but a big step for affiliates. In this modern world, gambling operators might consider that it is better to have an affiliate as a friend than to have been ‘de-friended’ by one.

In summary

The increasing presence of US land-based operators in online gambling highlights the importance of ‘branding’ and customer locality. Existing customers of land-based operators will expect a VIP treatment when going online and it is this VIP treatment that must be communicated by affiliates to existing land-based customers in accordance with the brand image and reputation. Nevada Regulators already request for affiliates to be ‘certified’ and it is as yet unknown what this certification entails.

In other words: the increased regulatory and legal requirements (data protection and certification to name a few) and the presence of US land-based operators in online gambling not only means that conversion will have to take place, but also that it will only take place in a highly regulated (and potentially licensable) environment. Affiliates need to play their cards right and prepare to ‘convert’.
 
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