Continuing on with what the future holds for US online gambling affiliates, CalvinAyre.com spoke with Massachusetts based Michael Corfman, CEO of Casino City, Inc. and Executive Director of Gambling Portal Webmaster’s Association (GPWA), to see if he thinks there is a future for US affiliates…or if they are just plain SOL.
Casino City, Inc. is a publisher, a gaming directory, an information source and a super affiliate for the online gambling industry. GPWA hosts a community of webmasters by providing a forum and tools sponsored by affiliate programs to help webmasters succeed the online gambling business.
Regardless of the fact that online.casinocity.com is a super affiliate, Corfman has a lot of contact with the smaller affiliates in the industry as a result of his relationships and responsibilities with the GPWA. When asked if these smaller affiliates will make it in a regulated US market, Corfman was optimistic so long as these affiliates are able to refocus their efforts.
“I believe a smaller affiliate can make it in a regulated US market if they have, or can develop, a focused audience that is able to play at one or more sites where they are able to establish an affiliate relationship. That is different than the way many small affiliates operate today, where they do not have a focused player audience in any particular geographic area in the Unites States”, Corfman explains.
The question of if and when a regulated market within the US will become profitable for affiliates is still very much up in the air. It appears that the US market is going to become regulated on a state-by-state basis, meaning affiliates will have to work within a state-by-state basis if this is the case.
“Because online gaming seems headed in the direction of being regulated on a state-by-state basis, at least over the near term, an affiliate will need to be able to operate on a profitable basis within each state where they have affiliate relationships. That is a lot harder than promoting online gaming sites that are available on a nationwide basis”, Corfman warns.
However when it comes to larger affiliates, state-by-state regulation may not squash their business. “Fundamentally, in a state-by-state marketplace, an affiliate site will need to have a critical mass of players within each geographic area they target. That means sites will need to have a high level of overall traffic in order to have a critical mass of potential players within individual jurisdictions, or they will need to have a large percentage of their visitors from a narrow geographic market”, Corfman says.
Of course this means that its essential for affiliate sites to have geotargeting capabilities in place and they must tailor promotions and content for each US state they are targeting.
“A critical requirement will be for a site to be able to target site visitors by their geographic location and provide both content and promotional material for online gaming opportunities targeted based on the geographic location of site visitors. There may also be new opportunities for sites specifically tailored to the residents of particular states, much as there are current opportunities around the world for sites targeted to players located in specific countries”, Corfman explains.
While changing the entire business model of an affiliate site may not seem to be worth the effort at first glance, the fact remains that the gaming industry revenue within the United States is massive, its just a matter of learning how to tap into it.
“Gaming industry revenue is substantial within the United States. In the 2012 edition of Casino City’s North American Gaming Almanac, our research showed that gross gaming revenue in the United States was $88.139 billion in calendar year 2010, even after some declines from prior years due to the harsh economic environment. Over time we believe an increasing share of that revenue will be attributed to online gaming, and we believe that opportunities for affiliates to earn revenue, either on an affiliate revenue-share basis or as advertisers, will grow substantially”, says Corfman.
Another question that remains is what, if any, US facing operators will even want to use affiliate marketing to grow their business in a regulated market. Corfman speaks for many when he says, “the jury will be out on that question for some time”.
It may be possible that affiliates will seek a more traditional advertising relationship with the operators if the affiliate program concept is not carried over, or simply to dodge the strict regulations that are anticipated to be put into place by the US for both operators and affiliates.
“I expect many folks that would prefer to operate on an affiliate basis may choose to avoid being subject to regulations by operating as advertisers who earn revenue on a more traditional advertising revenue basis from U.S. regulated online gaming sites versus on an affiliate-based revenue-share or CPA model”, explains Corfman.
There is of course the option of ignoring the US regulations and carryin’ on as usual, not a foreign concept to some of us within the online gambling world.
When asked if he thought affiliates may simply try get around the new regulations, Corfman responded with, “I don’t believe affiliates will be able to get around the regulations if they work with regulated operators. Some affiliates will likely continue to work with unregulated operators, although those operators will probably find it increasingly difficult to be successful as a regulated marketplace emerges. Fundamentally, regulated operators will not want to work with affiliates that are trying to get around the regulations because it would jeopardize the operators entire operation”.
