There’s no denying the pivotal role affiliates play in today’s iGaming market. However, some industry commentators believe that there’s more that can be done in this sector in regard to regulations and making better use of the affiliate/operator relationship.
We spoke with Fintan Costello, Manmaging Director at BonusFinder.com to get a better understanding of what can be done going forward to improve this sector and ultimately maximise the customer experience sustainably to ensure future growth of the industry.
What can operators and affiliates do with regard to information sharing in order to maximize player protection through collaboration?
“This is quite a tricky question because in the majority of cases I would argue very little.
If you think of the majority of affiliates, there’s a review, there’s some sort of guide, some sort of value-added service – The visitor comes in, reads and clicks a button, and then goes to the operator where the gambling takes place.
For the majority of affiliates, they’ve actually got very little information or data on their players or on the traffic that they refer.
I think in the vast majority of cases, what I’d actually look at is the affiliate being responsible in the content they produce, what they’re talking about, how they are promoting gambling – so all the kinds of normal RG stuff, being clear that Gambling, is not going to solve problems, it’s not going to make you sexier and it’s not going to pay off your mortgage.
I also think there’s a big role for affiliates to play in normalizing the RG tools. Affiliates can really play a role in this because they are experts in gambling. They are being trusted for their opinion by the players.
Using deposit limits, using a timeout, or any of the other tools that are available is completely fine and totally normal.
It’s not a sign of weakness or a sign of you’ve got a problem. It’s just good sense. Those kinds of areas are super important.
In the UK market, there’s obviously a huge amount of back and forth between affiliates and say compliance managers with information sharing.
Every operator has a compliance person who is reviewing affiliate websites and the content. As an affiliate, you end up dealing with 200 different compliance teams and they’ve all got slightly different interpretations or implementation rules or whatever they particularly want for their business.
Adding consistency and standardization across brands would be super useful for affiliates because it is adding a huge amount of admin overhead. It’s not that affiliates don’t want to be compliant, it’s just that there’s massive inconsistency across the brands.
For the small number of affiliates that do have a very close relationship with the players – allowing those affiliates access to self-exclusion tools so that information is shared across the operators could be a positive move.
You could argue for affiliates, who have the same level of visibility as an operator even though they’re not conducting the transaction and it’s not gambling in the technical sense, that they too could play a role in terms of opting the user out of say, marketing messaging or these kinds of things too.
I think there’s definitely a place for that, but in order for that to happen, you would absolutely need a licensing regime of some sort, because obviously it’s very sensitive data that’s being shared and there needs to be accountability, management and regulation and oversight of how that data is being used.
It’s a very difficult thing to do in the best possible way, but I think there are lots of little things that can be done on a day-to-day basis.”
With more jurisdictions considering and implementing regulation for affiliates in iGaming, what do you believe are the most effective models and why?
“There’s what I believe, and then there’s what politicians are going to put in place. And they’re probably two very, very different things.
My basic view on this is that no politician is going to lose votes for being hard on the gambling industry. That’s just not going to happen.
It’s a very easy industry for politicians to flex a muscle and show they’re serious and that they care about people. So that’s the difficulty this industry faces.
What we’re seeing – when we look at what’s happened in Sweden in the last year, the changes in Spain and the process that Germany is going through right now, and what could potentially happen in the UK – there does seem to be an arms race between regulators to show that they’re being even tougher and even more protectionist for players, than their neighbours.
The difficulty with this is that the unlicensed or the offshore or the non-supervisory alternatives are just a click away.
We’ve conducted three studies last year on Sweden showing the impact of the regulation changes and what’s actually happened is the Swedish players have said, “This is ridiculous”. https://www.bonusfinder.com/sv/om-oss/blog/sweden-report-december-2020
They can go to these other brands, that aren’t on a Swedish license, and can get much better value for my money in terms of bonusing.
They can get much better value in terms of the gameplay and bonusing. What ends up happening is over-regulation, which looks good on a newspaper headline or as a political soundbite, but in terms of player protection, it actually creates the opposite effect where players are just clicking offshore and they’re shifting their money there.
We’re estimating right now, there’s 40% of the Swedish casino market is now offshore, and that’s huge.
It’s quite easy for that to happen – if you look at Europe, Germany is going the same way, and you could easily see it happening in other jurisdictions, but the big obvious one is right now Sweden.
When I look at it from an affiliate perspective, which is obviously closer to home for me, we’ve been busy over the last 18 months going through the US licensing process across all the different States.
Obviously, there are a few other countries that have to license, but the US is probably the most relevant one, given the size of the market.
There’s definitely kind of two approaches. There’s the New Jersey CPA vendor registration which allows you access to CPA deals. It’s super straightforward, right?
It’s the name, address, couple of details, and who you will be working with – It’s a 20-minute process, you’re licensed in a week and it’s super easy. Anybody can go ahead and do that.
What I like about this is it’s a low barrier to entry, and it’s more about bringing people inside the net rather than trying to exclude people, because the more people who operate within a licensing framework and the more the authorities can know who’s promoting gambling, know who’s licensed, can contact them and have a conversation if they need to that.
This has to be better than operating in a big black box where we don’t know what happens – which I think is the wrong approach.
When I look at other US States, there’s definitely a huge amount of paperwork required, and it requires an extreme amount of detail which acts as a barrier to entry. It does exclude people from entering the market and what ends up happening is that it’s actually far more profitable to promote the unlicensed offshore brands than it is to go through the licensing process and promote the handful of licensed brands in a particular state.
So that’s clearly the opposite effect of what the US authorities want, but by creating these barriers to entry, this is what they’re doing.
If I was a regulator, I’d be looking for a light touch regulation process where they just want to know who you are. It should be free to register and ask which operators you are working with and what marketing methods are you use. It should offer a reminder on responsible gambling advertising and the ASA guidelines for gambling and please make sure you’re paying tax. That’s all it needs to be. It doesn’t need to be massively complicated.
What’s happened in the UK, for example, the regulator has outsourced this process to the operators.”
Editor’s Note: Fintan strongly believes that the key to a safer, more responsible gambling environment is in improved affiliate and operator cooperation. Sharing important customer data and standardising operations across the industry has the potential to take responsible gambling strategies to the next level and hopefully minimize government intervention.
Fintan also admits that this level of standardization and accountability may not be possible without regulation, which brings a whole new risk of its own.
To avoid alienating entire customer demographics, similar to what we’ve seen in Sweden, with up to 40% of their betting activity offshore, the risk of black-market play is very high.
The hope is that we can find a good balance of regulation and freedom to keep the customer happy. This will only happen with a light touch approach, similar to what we’ve seen in New Jersey, with great results, a trend we hope to see continue in the affiliate sector.