Mark Harper, General Manager of the affiliate publisher Covers.com, said that within this new phase, affiliates will play a key role in shaping how bettors approach wagering products because, for many consumers, they are “the first point of contact” with betting operators.”
But, he added, “We have to be on top of our content game; online sports betting is still in its embryonic stage,” and it is vital to “educate players before passing them onto operators.”
Seth Schorr, CEO of Fifth Street Gaming, concurred and said he was happy that affiliates were regulated in the U.S. because they are “often the first point of contact for players with betting” and “we don’t want to incentivize them with bad offers” that could lead to problem gambling or direct them to unregulated sites. “It’s good business ethics to have licensed and regulated activities,” Schorr added.
Kresimir Spajic, newly appointed CEO of Betfred US, said affiliate marketing is still very underdeveloped in the U.S. “One or two affiliates generate almost 80% of the players and have a lot of negotiating power with the operators”.
He added that affiliates had been “the only companies to have profited from the opening of online sports betting so far” thanks “to CPA (cost per acquisition) deals that were far higher than in Europe, huge competition (between operators) and rarity of supply” on the affiliate side.
Moderator Sue Schneider, SVP of SBC Americas, said many of the land-based resorts had not managed the spread of online gambling as well as they could have. “Lots of land-based operators thought they could get by with their own databases but found that it wasn’t that simple,” she said.
Schorr added that one of the most “disappointing aspects” of the post-PASPA environment was that “land-based resorts had not taken advantage” of their attributes to harness them in the digital sphere.
However, he recognized that the range of land-based casino customers, where the “VIPs want their rebates, the mid-tier players want their comps to show off to their friends and the low-tier players want free food and beverage and gifts,” was nothing like the current online sports betting-focused online environment. “It’s very different and low margin, but when casinos come online, we’ll see that change,” he added.
Schorr added that innovation had not been a priority for operators up until now, but with the rate of state launches slowing down in the next 12 months, he expected to see them focus on product and differentiation.
Harper noted that Bet365 was making good progress in states in “tier 2” states like Ohio by leveraging its product knowledge and learning about the market in a lower profile state rather than launching in New Jersey or New York, a route he also recommended to any affiliate thinking of launching in the U.S.
Schorr concluded that land-based operators had not leveraged their assets in the online space. “The fact that the two leaders are pure online players is shocking: if you’d said DraftKings and FanDuel would take on MGM and Caesars and win, no one would have believed you.”
