I'm curious about something...
I have noticed through some links on PAL that a couple of states are considering legislation to make online casinos legal. If that happens, how will that affect the casino affiliate market?
There are a lot of different opinions on that. A lot of people think that the casino affiliate market will dry up and go away, or that commissions will be really low, or that legal online casinos won't bother with affiliate programs. I've always thought that this was a "sky is falling" attitude. Lots of legal businesses in the USA run affiliate programs; there's no reason to think online casinos will be any different. The argument that a lot of folks make is always that the casinos won't need affiliates; they have plenty of money to market their casinos themselves. That's true of almost every large business on the Internet, though, including eBay and Amazon, but they still have affiliates.
The days of getting 35% or 40% of your players' losses will end though. CPA will become the rule with affiliate programs in the online casino industry, and the amount will be smaller than the average affiliate is used to now. The conversion rates will likely be sky-high though.
That's what I think, anyway. I'm sure you'll see some different opinions pretty quickly.
You'd have to think the 'new' online casinos would want to show an interest in affiliates. There's still a lot of competition and from a business perspective it seems likely they'd want to use whatever means possible to bring depositors in. Affiliate sites are a ready made advertising avenue, why ignore them. Doesn't make obvious sense.
I guess the negatives come in with cost. If they're starting out from scratch then they'll have to build an affiliate program - reporting back ends, affiliate managers etc etc. Don't know the cost of setting all that up, but guess it's a high up front investment. All in the numbers though - the cost of setting all that up may be a pittance against the cash they pull in from land based establishments.
It's possible they could partner with existing online casinos to use their affiliate facilities - we might see consolidation.
Not sure why the view is that commission structures could go sharply downwards. Maybe increased competition would counter the downward trend, or at least slow it.
All depends how it's done. Currently, efortuna.pl (Polish Monopoly), singaporepools.com.sg (Singapore Monopoly) myplaywin.com (Indian monopoly) etc. all have no affiliate programs and all three of those are new (first time legal online gambling for those countries). Even many of the countries with multiple operators (Czech Republic for example) have none either. Also refer to Hong Kong laws, Singapore laws etc. commission agents and affiliates are explicitly forbidden. If it turns out to be state lottery like - I doubt there will be much if any affiliate involvement. In Nevada the regulations proposed require affiliates to get a gambling license $2600 cost, no criminal background and business registered and paying tax in Nevada (which is basically flat rate business license, on top of gambling license) this would be an open market though much different what other states have proposed. New Jersey however looks promising and seems like there could be affiliate potential there. So much depends on how its all structured. Is it an open market where dozen can get a license, or is one single site ran by the state. Only time will tell, but I don't expect regulation has a positive impact on affiliates, but could be wrong.
Last edited by Prop; 04-23-2012 at 01:39 AM.