Why affiliates need a trade association

It was at the Amsterdam Casino Affiliate Convention in 2007 that I first saw a 100% revenue share deal. This was some five months after UIGEA had passed and initiated a mass land grab by European operators for dot.com affiliate traffic. These were heady days. Pre-regulation, pre-tax. Deals were there to be had and we bent terms and conditions to favour the affiliates we wanted players from. All was well.

Ten years on and we find ourselves in a spot of bother. Those lifetime revenue share, no negative carryover deals, aren’t looking so great from an operator standpoint.

Here’s a reality check for affiliates. Operators don’t make as much money as they used to. Their margins are being squeezed and affiliates must accept the reality that genuine lifetime revenue share on fixed terms is no longer viable.

This is the bottom line with the Sky Betting & Gaming (SB&G) decision to close their affiliate programme. While they have cited regulatory concerns, they are owned by a company focused on profit. The unquantifiable reservoir of future revenue share payments does not sit well on their forecasts. The decision is also a warning for affiliates: either repair the rails or the affiliate gravy train will be permanently derailed in the UK and inevitably beyond.
Taking the bull by the horns
In the immediate term, repairing these rails means sensibly and individually addressing terms and conditions with your affiliate managers. Some larger affiliate operations will have their own contracts with operators, but this is not generally feasible for smaller affiliates and not something many operators will be keen on.

I have already seen several affiliates seek to enforce standalone agreements in the wake of the SB&G programme closure – I can’t envisage that approach ending well.

A far more realistic and sensible approach is to seek an addendum to the current terms. Standard terms and conditions are designed to protect the operator’s compliance to avoid such fines as incurred by BGO and others of late – they are aimed at untested affiliates.

If you have an established partnership, there may be leeway but expect to compromise on your demands – do not expect any operator to promise you lifetime revenue share and remove the all-too-regular ‘FU clause’.

Affiliates need to work on a deal that takes out the latter and accept that operators’ margins may well only tighten further, which inevitably will need to be deferred on to your earnings one way or another – far better that this is transparent and progressive, rather than repeat the Sky Bet catechism.

With the help of some prominent affiliates and gaming legal specialists, I am in the process of establishing an affiliate trade body designed to accommodate and enact this reality check. The regulatory concerns Sky Bet has cited are a live issue and a genuine problem for operators to face up to.

The International Gaming Affiliate Association will represent members by establishing a code of practice to ensure that affiliates are promoting gambling in a responsible way and acting in compliance to all local laws from where they receive traffic, beginning with the UK, and driving forward operational standards for the egaming affiliate industry.

Membership will include, among other benefits, learning opportunities pertaining to compliance and is designed with a simple vision of safeguarding consumers and protecting the operator/affiliate partnership for the long term.

Tom Galanis is an egaming affiliate marketing specialist. Since 2005, he has led and assisted in the development and management of dozens of affiliate programmes for companies as illustrious as bet365, Gala Coral Group, Betsson and Rank Group.