FORMING AN AFFILIATE RELATIONSHIP WITH US LAND-BASED OPERATORS


As the interest and excitement grows around the potential for one or more US states to provide a regulated environment for online gaming, affiliates are looking to the American market as a place to do business. The question is; who wants them


WITH NO LEGAL framework in place for the type of relationship that a licensed US operator can have with affiliates, this is an area of their marketing that has not received much attention. Many operators that we speak to are unsure of the definition of an affiliate and, in too many cases, affiliates are seen in a negative light. For those that do understand the value, the majority don’t know where to start; how to find affiliates, what they need, how to manage them, and they certainly have no idea on how to compensate them.

Lest you think that this discussion on affiliates is premature, not only can (and should) land-based operators be using affiliates to drive traffic into their casinos today but, in my opinion, the affiliate community itself needs to be proactive in this regard so that it is not left out of the equation. If the casino operators understand the true value of affiliates to their land-based and proposed online operations, their ability to extend their brand and their reach, and in increasing their overall business and revenues, then they would also be interested in seeing this ‘advertising’ channel open to them.

Publications such as iGaming Business are working to educate the stakeholders, as are experienced online gaming consultants, but while the operators are learning, regulations are being proposed and written and this lack of knowledge extends into the regulatory bodies and governments, as we are seeing in Nevada. As I wrote in a previous article, the proposal to include affiliates as an “...interactive gaming service provider that provides products, services, information or assets to an operator of interactive gaming and, therefore, receives a percentage of gaming revenue ...” would likely result in affiliates having to be licensed; an onerous, extremely restrictive and (likely) costly process.

Affiliates do not want to have their businesses controlled by the state; I dare say this goes against their very nature. Affiliates can simply be viewed as another marketing channel, and you can be sure that the newspapers, radio stations, magazines and TV stations are not licensed vendors.

Moving forward, assuming that you do have the opportunity to become a licensed affiliate for a land-based operator, you will want to look at the business you are doing now, and decide if you need to make any changes. Certainly, it would stand to reason that regulators would frown on you promoting non-regulated sites, especially those taking US action. You may be required to provide a full history of your business, your finances, and your experience in this space.

When dealing with regulators, remember that telling the truth is always the best option, even if you have some history of earning revenues from US player activity. If there is any record of those earnings, they will more than likely be found, and the application could be declined.

My hope is that affiliates, operators and regulators all understand that this is a new beginning, and that the focus should be on building respectful and mutually profitable relationships between operators and affiliates moving forward.
 
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