In July, execs from our offices in Canada and London went to the inaugural iGB Live! event in Amsterdam, and so we developed an article for the conference issue of iGB Affiliate. The piece discussed the US and UK markets for affiliate marketing from an affiliate perspective.
From Pennsylvanian iGaming to iLottery
Of course, the UK is by no means the first iGaming market to place significant oversight on affiliates. In 2013, when New Jersey regulated its online casino and poker market, its Division of Gaming Enforcement (DGE) opened its arms to affiliates – so long as they applied for a licence. Affiliates promoting brands on a CPA or flat fee basis applied for free vendor registration, while those working with brands on revenue share are required to obtain an Ancillary CSIE License at a cost of $2,000.
Those affiliates savvy enough to think beyond these minor bureaucratic hurdles placed themselves in a strong position as the market grew. And grow it certainly has, with the DGE reporting record monthly revenue of $25.6 million in March. Forward-thinking affiliates who have promoted New Jersey brands are now well-placed to profit from Pennsylvania’s regulation of iGaming last October.
The prospect of promoting Pennsylvanian brands is a major one for affiliates. Like New Jersey, the Keystone State has regulated both online poker and casino, maximising affiliates’ revenue opportunities. The Pennsylvania Gaming Control Board (PGCB) is also expected to follow the DGE’s inclusive approach towards affiliates, according to Eilers & Krejcik Gaming. Even better, Pennsylvania’s 13 million residents will make it the largest pool of potential players of any of the four iGaming markets (Nevada and Delaware have small populations).
With the PGCB opening its 90-day online gambling licensing window in April, the market is expected to go live in H2 2018. Affiliates can get ahead of the regulatory curve by developing Pennsylvania-facing sites, content and social media handles now in preparation. Once the market is live they will have already built a social following and foundational traffic to convert at the new PA brands they’ve partnered with.
With so much focus on Pennsylvania’s online casino and poker market, affiliates shouldn’t neglect an important additional aspect of its gaming law – its regulation of iLottery. In late May, the state launched its online lottery, joining Michigan, Georgia, Kentucky and Illinois in offering digital sales. This provides affiliates with the tantalising prospect of an affiliate programme for the new brand, following Michigan’s launch of the US state lottery’s very first programme this January.
With less than 10 million residents, Michigan is only a mid-sized America market in terms of traffic. Despite these challenges, Michigan’s pioneering programme has driven more than 1,300 player registrations and over $35,000 in net gaming revenue in under six months, according to Income Access data. Over a third of promoting affiliates (35%) are non-American. The presence of both international and domestic marketers in the US iLottery space is sure to increase if Pennsylvania and other states follow Michigan’s lead.
Affiliates developing a marketing strategy for the arrival of iLottery and iGaming in Pennsylvania were granted an even bigger American dream in May. The Supreme Court’s repeal of PASPA, which prohibited single-event sports betting in all states except Nevada, opens the door on legal sports-betting across the country. The American Gaming Association estimates that the country’s unregulated sportsbook market totals $150 billion. This development therefore serves as a massive potential opportunity for affiliates, especially as US sportsbooks are expected to model their affiliate marketing approach on the UK market.
US sports-betting and related affiliate marketing could soon be bigger than its British equivalent. Based on a forecast of 19 states legalising by 2023, the market’s gross win is forecast to reach $4.9 billion, exceeding the UK’s $4.7 billion total, according to H2 Gambling Capital.
Beyond five-year projections, which states will go live with sports-betting imminently? GamblingCompliance forecasts that New Jersey, which led the PASPA legal challenge, will regulate by July followed by Pennsylvania, West Virginia, Mississippi and Delaware over the next few months. The Garden State’s online sports-betting market could be live by the start of the NFL season in late August, while California and New York will likely consider regulation in 2019, according to Eilers & Krejcik Gaming.
Affiliates not already promoting New Jersey online casino and poker brands can start developing sites focusing on the market, while those already active can diversify their offerings to include the new vertical. Affiliates already preparing for iGaming in Pennsylvania will have few issues broadening their focus to include sportsbook, while also developing sites targeting the other regulating states.
Given the crossover between daily fantasy sports (DFS) brands and sports wagering, affiliates can prepare for the arrival of sports-betting by joining FanDuel’s and DraftKings’ long-standing affiliate programmes. Both brands have signaled their post-PASPA diversification into sports-betting providers. Paddy Power-Betfair’s acquisition of FanDuel in late May suggests that the major DFS brands will play a vital role in shaping the US sportsbook market.
From legal sports-betting and iLottery in various states to online casino and poker in Pennsylvania, the US is transforming into a land of affiliate opportunities. By embracing the American market’s multiple verticals while also ensuring their UK strategies accommodate the market’s changing regulatory requirements, affiliates will establish themselves in the new world of affiliate marketing – and still maintain the roots of their revenue.
Now that you’ve read both parts of the article, tell us what you think in the comments section below. If you’re interested in our affiliate management services, please reach out to our Head of Business Development Sarah Robertson.