One of the key challenges for online businesses of all kinds is marketing. Today, we take a closer look at how operators in the highly competitive online gambling business leverage the work of third-party affiliates to gain leads.
Statista estimates that global online gambling will generate over $90 billion in 2023 alone, and with more people connecting to the web every day via low-cost devices such as smartphones, that figure is only going to get bigger. So, how do casinos and sports betting sites market themselves?
What Role Do Affiliates Play?
Affiliates are strictly marketers and usually are not connected to the casinos and sports betting sites directly. These third party companies build lead-generating apps and websites in exchange for a cut of the action.
For example, www.gamblerspro.com/. reviews and rates online casinos. When a customer finds this website and sees a casino they like, Gamblerspro gets a slice of the action when the elad converts into a real money player.
In most cases, affiliates can expect 25% of the action on slot machines, roulette, blackjack, and other casino games. As the number of real money depositors per month increases, so does the commission. Splits of up to 45% are not uncommon for high-performing affiliates.
What risk does the affiliate take on? In most cases, not much. As long as the terms of the affiliate contract have ‘no negative carryover’ as a stipulation, the slate will be wiped clean on any losses at the end of each month, and new commissions can begin building again in the following month.
The Different Types of Affiliate Deals
There are a few different types of models for deals gambling affiliates can expect.
- Rev Share – By far the most lucrative is the revenue share model. As described above, this cuts the affiliate in on the action. They can expect anything from 20-45% depending on how many real money players they send to the casino each month. Several large casino portals report sending 1,000+ new players to their top partners each month.
- CPA – Cost per acquisition pays a flat fee for each new depositing player. For example, an affiliate might get $100 per real money lead. This allows affiliates to more accurately predict their income based on how many real money leads they usually generate per month, but it does mean they miss out on the big gains from high-stakes players.
- Media – Some affiliates with larger high-traffic websites negotiate media deals with their partners. This involves selling banner advertisements for flat monthly fees. For example, some of the gambling news sites that report on industry events, meetups, and news like game releases will charge for sidebar banners or in-article banner placements.
It’s also possible for some affiliates to negotiate mixed deals. Some prefer a blend between CPA and revenue share, with a lower percentage of overall action in exchange for a flat fee up front.
What are the Most Lucrative Markets?
The most lucrative market for online casino gaming is the United Kingdom. It’s well-regulated and has plenty of legal, professionally run casino sites. The UK online gambling industry is worth tens of billions per year.
However, several U.S. states have recently legalized casino gaming. These include New Jersey, Michigan, Delaware, and Pennsylvania. As more states legalize, the United States as a whole will likely become the most lucrative market within the next decade.
Other lucrative markets include Canada, India, South Africa, and Australia for sports betting. Affiliates tend to focus on these markets as a result.