Gambling With Commission: Trusting Affiliates In The Age Of Compliance
Published 11th October 2018
As the mainstream media turns the screw on the gambling industry and regulators scramble to play ball, the issue of compliance is fast becoming 2018’s hottest topic. Operators are swimming in a bowl of acronym alphabet soup with the licence-hungry Gambling Commission ready to gobble up those who prioritise FTDs over GDPR and ROI over self-exclusion.
But, while the attacks may seem relentless, it is easier to empathise with the organisations that are dishing out the fines than it is to sympathise with the companies that are receiving them. A genuinely responsible industry should embrace the challenges of compliance and strive to offer the safest and most enjoyable experiences for its customers. Easier said than done.
In the July edition of iGB Affiliate, Ian Sims of Rightlander described how the crackdown on compliance has affected operator-affiliate relationships and resulted in the contraction of many large programmes.
At Lindar, we work on both sides of the fence: as an affiliate with OnlineBingo.co.uk and as an operating-licence holder with our latest bingo site, MrQ. Our business need to maintain affiliate relationships with operators is balanced with our maternal instinct to protect our licence from being compromised by noncompliant third parties.
All of which throws up the question: can affiliates ever really be trusted?
The case for affiliates
Reputable affiliates add credibility to new sites
The bingo industry is dominated by just a handful of successful platforms. 888’s Dragonfish software is host to more than 200 sites, including huge brands such as Foxy, Wink and Costa. And while no one software is perfect, there is a definite sense of ‘better the devil you know’ when it comes to players choosing – and trusting – something new. Affiliates provide the perfect way for new brands to quickly gain trust by association. After all, why would your favourite comparison site suggest playing somewhere unsafe?
Affiliates allow the amplification of marketing messages to relevant new audiences
With restricted marketing budgets, little site revenue and no SEO authority, it can be particularly challenging for new sites to compete for attention against bigger and wealthier brands. But by piggybacking on the campaigns of affiliates, it’s possible for sites to access large, highly relevant audiences at a fraction of the cost (more on that below).
Affiliates increase exposure for brands in already-saturated verticals
Even the best-optimised bingo and casino sites will struggle to get more than one or two listings in search results for popular keywords. In addition, there are plenty of phrases for which Google favours affiliates. For example, for this article I performed a search for “new bingo sites” and none of the top 10 listings that appeared on the first page of results were operators.
Moreover, where the searcher intent is to view a list, Google more often than not returns a list. The only way for new brands to capture this traffic is to be part of these affiliate landing pages or risk missing out altogether.
Flexible commission structures & budgets
Don’t want to commit to large acquisition costs with no guarantee of ROI? Worried about paying for expensive clicks that don’t convert? With the CPA and revenue share models offered by the vast majority of gambling affiliates, new sites are able to tailor budgets for real depositing players and avoid the pitfalls of speculative costs per leads.
At OnlineBingo.co.uk, as with many of our competitors, we work closely with new partners to agree mutually beneficial deals that are regularly reviewed and adjusted according to actual performance.
The best affiliates are working as marketing partners, not just as suppliers of players.
If not affiliates, then who?
Every channel, from organic search to programmatic display, demands a certain appetite for risk from advertisers. Affiliates are so prevalent and influential in the gaming industry that removing them from the inbound mix completely would have a very noticeable and costly effect.
Assuming that other sources of players are already operating close to their full potential, where would the hitherto affiliate-generated prospects come from?
The case against affiliates
A few bad actors affect the reputation of the masses
Low-quality affiliates are not unique to gambling – just try comparing broadband, car insurance or mobile phone contracts online.
Rules are made for exceptions. Just as the plane that lands safely doesn’t make the news, the compliant affiliate isn’t made an example of. The onus is – and should be – on operators to vet who they work with, but it is also on affiliates to be honest and transparent in their methods. Good faith works both ways.
The current operator mindset of ‘guilty unless proven compliant’ is problematic in that it initiates new affiliate relationships on a foundation of scepticism and mistrust. Condescending compliance messages and over-sensitive programme suspensions don’t help but when there’s a gambling licence on the line, who can really blame them?
Affiliate management is costly and time consuming
We have reviews for more than 600 bingo, slot and casino sites on OnlineBingo.co.uk, yet we are only a small part of many operators’ affiliate programmes.
The burden of keeping information, offers and terms consistent across all third-party platforms is a particularly cumbersome responsibility for new sites. Even minor regulatory changes become prohibitively consequential.
Simple tasks such as adding significant T&Cs alongside the mention of an offer can incur expensive design and development costs for affiliates.
Checking up on compliance implementation and offer accuracy is also expensive for operators. As discussed in issue 70, the Rightlander tool automatically searches affiliate websites for data inconsistencies pertaining to the above. Rightlander’s Ian Sims ran his software on OnlineBingo.co.uk and, despite weekly content reviews and regular communication with our core partners, the resulting analysis still showed a handful of outdated offers that we’d missed. Rest assured we’ve fixed them now.
Avoiding affiliates altogether may be the only guaranteed way for a new operator to protect themselves and their licence – at least until the revenue and resources are in place to support proper affiliate-programme management.
The conflict between data transparency and data protection
One of the problems with so many regulations changing in such a short period of time is their tendency to conflict with each other, despite sharing a common goal.
This is perhaps most evident in data protection. Whereas operators are able to use the legal obligations of their gambling licence as a lawful basis to process data under GPDR, affiliates have to rely on either explicit consent or legitimate interest. At the same time, operators have a duty to protect self-excluded players and monitor site activity for potential money laundering. To fulfil these obligations in full, brands should be encouraged to work closely with all marketing partners.
Whether it’s sharing a list of excluded players with an affiliate prior to an email campaign or being passed information about suspicious deposit patterns elsewhere, the restrictions of GDPR also restrict the effectiveness of enforcement.
In order for affiliates to take compliance seriously, the role that affiliates can play in compliance has to be taken seriously too.
Getting on the front foot
Good content marketing considers users’ objections to using a product and addresses them head on with answers. Likewise, the easiest way to reduce operator friction around compliance is to take a proactive approach to addressing issues before being asked. What steps affiliates can take to stay attractive to operators in 2018 are outlined on p50. Following the tips will not only ensure your site is in line with regulations but it’ll also position you as a viable and trustworthy partner for new brands, such as Mr Q.
We’ve spent three years designing, planning and developing MrQ from scratch – we’re certainly not going to compromise its success by partnering with non-compliant affiliates. Every new regulation is an opportunity for compliant affiliates to further distance themselves from the bad actors dragging them down. Rules governing the industry are far more likely to get stricter than get revoked, leaving affiliates with a choice: adapt and evolve or resist and die.
In the battle between the peacock and the dodo, I know where I’ll be placing my money.