The blueprint for success in the regulated US markets
Published 20th May 2014
In the current landscape of the regulated US online gambling markets, traditional affiliate marketing is, for the most part, non-existent. Instead, it is more prevalent to see the newly regulated online casinos and poker sites working with a select group of webmasters through paid advertising deals. Due to strict regulation and a lack of understanding as to what affiliate marketing involves by regulatory bodies such as New Jersey’s DGE (Division of Gaming Enforcement), affiliate marketing has yet to be fully embraced in any of these markets.
This does not mean that affiliate marketers are completely shut out of the market, however. It simply means that affiliates need to be creative and shift in the paradigm of how they work within the industry.
Challenges and restrictions
Before we dive head-first into the strategies for success within the regulated US markets, we must first examine some of the ongoing challenges and restrictions faced by traditional affiliate marketers.
In the country’s largest regulated market, New Jersey, affiliates are still being told that in order to promote the regulated online gambling operators, they will need to apply for, and receive full ancillary licensure from the state.
The process for receiving an ancillary licence in New Jersey can be quite expensive and cumbersome. Affiliates that have gone through the process are reporting that over 50 pages of paperwork are required to be filled out, as well as producing several years of tax returns.
In addition, to be considered for licensure, the candidate must complete a full background check examining every aspect of their current and previous businesses. Many US affiliates are reluctant to subject themselves to this kind of scrutiny given their previous involvement in the unregulated US market.
Big picture = small piece of the pie
While the three existing regulated markets are indeed exciting, they are still extremely small compared to the rest of the world. Affiliates must decide if there is enough value and profit from these markets to warrant investing their time and capital into them given the lack of a traditional affiliate model.
The trump card: federal regulation
Many long-time affiliate marketers in the US have been burned too many times by regulation and legislation.Starting with UIGEA in 2006, and followed by the infamous Black Friday in 2011, several affiliates had their entire incomes decimated courtesy of the US federal government.
Fuelled by billionaire gambling opponent, Sheldon Adelson, new federal regulation is being introduced to amend the Wire Act that would essentially supersede the states; once again making online gambling within US borders illegal. Many affiliates are purposefully waiting on the sidelines and avoiding the US market altogether until more clarity on federal regulation is reached.
With great challenge comes great opportunity
While working within the regulated US gaming market certainly brings with it challenges and restrictions, it also brings a great deal of opportunity. In New Jersey, for example, operators are investing record amounts of marketing dollars. Never before have we seen online gambling companies sponsor professional sports teams in the United States. Companies are literally investing millions of dollars into the New Jersey online gambling market.
Not only are affiliates being forced to think outside the box, so are the online casinos and poker sites. But make no mistake, they all have large marketing budgets, and if you can deliver value, you will reap the rewards of these budgets. When discussing a blueprint for success in the regulated markets, there are a few key attributes that all successful marketers and service providers will have.They are as follows:
Relationships and contacts are king
To be successful in any emerging industry, it’s much easier if you already have relationships and a dialogue with the key decision makers and thought leaders before you attempt to enter. The regulated online gambling market is no different. If you are completely new to the industry, the best way to find out who these leaders are is through the various social media channels such as Twitter and LinkedIn. From there, you can approach these leaders to potentially get a quote for a news story, or offer to interview them for an article.
The key is opening up that initial dialogue, learning about their business, and getting the relationship started. With a simple Google search, it’s also easy to find out what the big media sites are that are covering the regulated US gambling markets. The journalists and owners of these sites are also great contacts to make and have in your network.
Find a way, or build your way in
In a recent article series by Chris Grove on PokerAffiliateSolutions.com, he outlined the importance of developing partnerships and relationships with others attempting to work in the emerging US regulated markets. Whether that is other affiliates, service providers, or ad agencies, there is a great deal of value in combining resources to accomplish the common goal of working in these markets.
If the prospects for partnerships in the niche you operate within are not available, then you may just need to roll your sleeves up and build your way in. For example, if you specialise in email marketing, you’ll need to use your expertise to build a targeted list of potential players in the specific market. Or maybe you are a master SEO; you may have to build a network of mini-sites to start ranking and generating traffic in specific states.
Quality and targeted traffic in the US regulated markets is extremely valuable, regardless of how it is acquired. At the end of the day, the regulated US operators are looking for, and willing to pay for traffic that converts into real money online players.
What does a successful affiliate blueprint look like?
Without including site names or businesses, let’s explore how one traditional affiliate has entered the regulated US market. We’ll call the affiliate ‘X’ for anonymity sake. X had always been a successful affiliate in the unregulated US markets. In fact, X was making thousands of dollars per day prior to Black Friday. X had mastered the art of search engine optimisation, as well as list building and email marketing.
In late 2013, prior to the New Jersey regulated gambling market opening up, X built several mini-sites targeting New Jersey-specific keywords. X also leveraged his existing authority sites to further rank for these specific terms. With a variety of sites and pages targeting specific keywords, X began driving a fair amount of extremely targeted traffic to his sites. He was also capturing several targeted emails each day.
Knowing how valuable his traffic was, X approached a few of the regulated operators in the Garden State whom he already had relationships with. The first thing he quickly learned was that he would be required to get a vendors permit through the New Jersey DGE. Unlike the full ancillary licensure process, however, this was very simple.
After receiving his vendor’s permit, X was offered a flat advertising rate from these regulated operators to display their banner advertisements and text links on his sites. X was now receiving a negotiable flat ad rate each month from the regulated operators, and everyone was happy. If X can continue growing his traffic, he can then negotiate for higher rates. If X’s traffic falls off, or he is not delivering value to the operators, he will be at risk of losing his paid advertising deals.
So as you can see, this is certainly not a traditional affiliate model, but one that can create a win/win for both the affiliate as well as the regulated operators. As an affiliate marketer, there is no right or wrong answer on how to approach the emerging regulated markets, except to say that it will more than likely be different than any other market you have worked in. If you can differentiate yourself and supply something that is in high demand amongst operators in the US, you will be well on the way to creating your own successful blueprint in the exciting regulated US market.