Is affiliate marketing reaching a tipping point in the US? That’s the question we explored in our contribution to issue 37/Volume 2 of iGB North America, in which we discuss the current state of affiliate marketing in the US, the channel’s inherent ‘stickiness’ and optimism for 2019.The full article, which coincided with November's ICE Sports Betting USA, can be found on pages 68-69 of the publication’s online edition. We’ll be presenting the article here in two parts, with the first part available below. The second and final part can be viewed here.

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“The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire,” writes Malcolm Gladwell in The Tipping Point. He defines context and a concept or product’s ‘stickiness’ as key factors in instigating this ‘magic moment’.

Following the repeal of the Professional & Amateur Sports Protection Act (PASPA) and the imminent launch of the Pennsylvania iGaming market, is affiliate marketing reaching its own tipping point in the US? With contextual factors and affiliates’ ‘stickiness’ as an acquisition channel aligning, the next year will see a major change in affiliate marketing’s American evolution.

Context & Stickiness

The affiliate channel’s growth has been slowed in the US by limitations at a vertical and a market level. Until its repeal in May, PAPSA prohibited single-event sports-betting outside of Nevada (3 million population), a state that regulated iPoker from 2013. New Jersey (9 million), whose iGaming market also launched in 2013, and Delaware (1 million), live from 2012, remain the only states offering both online poker and casino.

These contextual limitations aside, New Jersey, the largest iGaming market, has actively embraced the affiliate channel. From launch, the Division of Gaming Enforcement (DGE), the state regulator, licensed affiliates, with a free vendor registration required to promote on a cost per acquisition (CPA) basis, or an Ancillary CSIE License costing $2,000 for revenue share deals.

In addition to the documentation required by the DGE, Adam Small, CEO of affiliate business US Bets, points out that applying to join a New Jersey brand’s program can be rigorous. “When I started NJOnlineGambling.com, it took me six months to get set-up with one of the operators I wanted to work with,” he says.

Fellow affiliate Becky Kingman-Gros, COO of Casino Connection and iGaming Player, suggests that initially affiliates targeting New Jersey also faced brand-specific issues relating to player geolocation, identification and transactions. However, she adds, “The NJ online market has seen a steady improvement as players became more comfortable with the concept of online gaming; technology has improved, and regulators are confident that there are few remaining issues to resolve.”

This improvement has been accompanied by commercial growth, particularly for online casino. As Michael Daly, General Manager US at Catena Media, says, “NJ online has been growing 15-20% each year since launch and is now over 10% of the total revenue for the state.” Indeed, the DGE reveal that the state’s strongest monthly iGaming revenue came last quarter: $25.9 million in July and $25.8 million in September.

According to Income Access’ 2018 New Jersey iGaming data, affiliates can be responsible for as much as 15-20% of player acquisitions. Affiliates’ ‘stickiness’ as a marketing channel has been further proven by their cost-effectiveness, with operators only paying for depositing players. “Much of the risk and costs spent in this pursuit is offset from them to us,” says Daly, who adds that affiliates “are viewed to be independent from the brands we advertise and as an informational resource.”

Small agrees with Daly, arguing that affiliates’ objectiveness has allowed them to support New Jersey consumers’ vetting of brands through product reviews. “There’s also an education gap in the US, as people everywhere are confused about gambling laws – affiliate can help bridge that gap,” he says.

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Once you've read the second and final part of our article contribution to iGB North America, where we share more insights from experienced industry  affiliates, please share your thoughts in the comments section.