This post was written in December 2017 when I was Head of Product for the poker and bingo business unit at Microgaming.
It’s been a terrible few months for eGaming affiliates. The regulatory authorities in the UK have started to more strictly and consistently enforce advertising rules, and this has resulted in a number of operators tightening up their affiliate programs or even closing them entirely. Essentially, gambling operators are beginning to be held liable for the actions of affiliates who promote their brands, and they are understandably not willing to take this risk. With even stricter rules and enforcement on the horizon, including significantly more onerous data protection and privacy regulations, it’s difficult to see how the affiliate business has much of a future.
For years, we have tried in vain to regulate the behaviour of affiliates. For a period in the late 2000s, the MPN struggled terribly with network ecology – a result of a small number of parasitic operators focusing exclusively on affiliate marketing and the promotion of rakeback and discounts, to the great detriment of other operators and the network as a whole.
As a result, we implemented strict rules governing promotions and the types of marketing that were acceptable. Rakeback was limited to 30%, and rules were put in place covering deposit bonuses, reload bonuses, and the amount of money that could be spent on specific types of grinder-focused promotions like rake races and rake chases.
Because MPN does not have any direct relationship with affiliates, we could only hold operators liable for promotional material that was in breach of the rules – exactly like the UK Gambling Commission, who don’t regulate affiliates and hence can only take action against operators.
Over the years, rogue affiliate marketing has cost MPN operators hundreds of thousands of Euro in fines*. Almost all of these fines were because the affiliate intentionally set out to break the rules. We’ve seen it all – affiliates whose primary selling point is that they can get you 40% rakeback by sending you an extra 10% via Skrill, affiliates who will get you repeated reload bonuses, affiliates whose entire business is built on plagiarised articles and poker videos.
Despite the fines, there has been no substantial change in the way that affiliates behave – new affiliates crop up regularly, seeking to break the rules. So right now, operators have no choice – stop affiliate marketing, or accept the fines – and many are choosing to stop affiliate marketing.
Ever been on holiday to somewhere like Marbella or Malta, and walked through the tourist areas? Some affiliates remind me of the touts on the streets, who hand out flyers to nearby pubs or restaurants, or who offer a round of free shots if you’ll only come to the bar around the corner with all your friends. Bar owners, looking to drum up business, pay these touts commission depending on the number of punters they bring through the door – or perhaps the amount spent on food and drink.
Have you ever taken up one of the touts offers and found that the bar or restaurant wasn’t what you expected, or was completely empty?
How many of the best bars and restaurants in the world do you think rely on street touts to get business? Do Petrus, Sabor Brazil, and The Witchery need touts offering free shots to get people through the door?
The analogy extends further. Stop paying the touts, and they’ll promote other bars. Not willing to offer free shots? They’ll promote other bars. Changed the food or drink you sell in a way that displeases the touts? They’ll promote other bars. Not happy with the way the touts are representing your bar’s brand? Screw you, they’ll promote other bars.
Some bars become reliant on touts for all or most of their business. These bars inevitably close because it’s the only way they know how to attract customers – and when the touts disappear, so does their revenue.
Truth is – any bar or restaurant worth going to doesn’t need touts. They add zero value, but infinite risk.
This is a harsh comparison, and many will disagree with it. After all, in the eGaming world, there are plenty of affiliates that do add value. But they do this by creating compelling original content, or offering a unique and valuable service – not by offering 10% extra rakeback, or stealing content from other sites. Think sites that provide live reporting of poker events around the world, sites that offer compelling training material for new players wanting to improve their poker game, or perhaps even sites that offer odds comparison so that a player can make the bet that they want with the best odds possible.
Sadly, reputable affiliates who operate ethically are being tainted by association to rogue affiliates – and with swathes of operators closing down or limiting their affiliate programs because of the risk of regulatory enforcement, this is a huge threat to the affiliate industry.
So what can reputable affiliates do to protect themselves? MPN failed to regulate affiliates and change their behaviour, and I don’t think the regulatory authorities will have much more success. Honestly, I think the only solution is to self-regulate – form an organisation to represent the interests of affiliates and set standards that must be upheld in order to achieve membership. The eGaming industry has done this many times, forming industry bodies like eCOGRA which are now well-respected by regulators and operators alike. The affiliate industry should do the same – with a little time, membership of the organisation would come to represent integrity and trustworthiness, and operators could use it to decide which affiliates to work with, and which to avoid.
Such an organisation would also solve one of MPN’s problems – we could simply require that our customers only work with affiliates who were part of the organisation, and forget about trying to regulate affiliates, which has proved futile for so long.
2018 is going to be a hugely challenging year for affiliates. The most reputable affiliates have a chance to save themselves – but will it actually happen? Time will tell.
*These ‘fines’ are actually contributions to network promotions, and so go to players in the end.