But as a
report published in late April by Bojokolaid bare, the level of deductions has escalated to the point where affiliates are at times working for almost nothing.
The affiliate audited all of the online casinos it has 45% revenue share deals with and came up with some alarming findings.
It found that on average, the net revenue share after fees were deducted was 23.91%, close to half that advertised. And within its group of partners there was wide variance – the highest revenue share after fees was 40.91%, the lowest just 8%.
“The worst case is 8% and there were other ones close to that, so they are basically taking everything with made-up costs from the revenue,” says Joonas Karhu, chief business officer at Bojoku.
“In the worst case your traffic is actually valuable but you are not making any money. You can’t hire more talent, you can’t build your company.”
Karhu is not alone in being annoyed by the fact many revenue share deals deliver much less than what is advertised.
“The fat truth of this is that if these companies tried marketing to consumers rather than business partners in this way it would be ripped apart by the various advertising standards agencies,” says Duncan Garvie, manager at affiliate and alternative dispute resolution website ThePOGG. “They would never be allowed this sort of ambiguous structure when marketing to consumers, but because it is small businesses they get away with it.”
ADVERTISED FEES ‘ENTIRELY INACCURATE’
However, it’s not so much the fees themselves that affiliates are angry about, but rather the lack of transparency regarding them.
Operators typically make deductions for things such as taxes, licensing fees, software, banking costs, bonuses, chargeback, marketing and admin fees.
Most in the industry accept that as markets have regulated and taxes have risen these fees have increased – in many markets there’s now less profit to go around and most affiliates realise this will affect them as well as operators.