Affiliate marketing is a significant channel for many online businesses, from books and DVDs to travel, insurance, fashion, fitness and gambling.
On their side, marketeers love the affiliate model because it allows their business to accurately monitor ROI as the cost comes from sales rather than exposure or clicks. Meanwhile, on the affiliate side, the nature of the business makes affiliation accessible for both small operators managing websites from their homes as well as multi-million-dollar businesses straddling several industries, including online gambling.
Of all the opportunities for someone setting up a new affiliate business, the online gambling sector is one of the most attractive, mainly due to the huge profits that can be made by anyone smart enough to find valuable customers.
In regulated markets like the UK, casinos and sportsbooks have seen extraordinary growth in the last two decades so that now over £5 billion per year is generated in Gross Gambling Yield from the remote sector. At the same time, globally the industry is expected to continue growing through the next 10 years, particularly with the opening up of the US and Canadian markets.
But, is this a good time to enter the race as a gambling affiliate?
In this article, we summarise the opportunities and risks and provide some pointers for you to decide if this is a suitable industry for you.
Opportunities for gambling affiliation
- Global gambling market is expected to grow from $60 billion to $112 billion between 2020 and 2025
- New opportunities in the States where sports betting has been legalised, and other emerging regulated markets in Canada, Latin America and Asia.
- Growth is driven by tech advances that gambling operators typically harness before anyone else, like live stream casinos
- Affiliation will always be a key part of marketing strategy for gambling firms
Risks for gambling affiliation
- The biggest regulated market – the UK – is at risk from increased regulation under a new Gambling Act in 2022 including deposit limits and affordability checks that could significantly impact customer value and therefore affiliates commissions.
- The best value markets in both North America and Europe are all extremely competitive making it difficult for new businesses to gain a foothold.
- Typical channels for affiliates – including SEO and social media – are subject to the changing whims of Google and/or regulators who may restrict some forms of advertising in the future.
In summary, what we know is this: the online gambling industry has the potential to be hugely profitable but it is a risky one to get into. Changing regulation in all markets presents a big challenge, but it has been this way for years and right now many businesses continue to thrive under the pressure. And with new markets like the US opening up, there are still real opportunities to build successful affiliation for gambling businesses in 2021 and beyond.
Here are some key areas to look at when planning your new business – work through these before you do anything else.
1. Select a niche
Online gambling covers a wide spectrum of betting opportunities. The main ones are casino and sportsbook, but you could also consider fantasy sports betting, lottery, bingo, or poker. The best customer value and therefore affiliate commissions come from casinos, but it is also the most competitive, particularly when targeting table games and live casino players.
Don’t just focus on one vertical, like casino or poker. Think about which niche within that vertical you wish to target too. If you focus purely on video slots or blackjack in the casino vertical for example, you will be able to build your website or social media presence more effectively. If your channel is SEO then having a niche-interest site will also make it easy for Google to understand what you are about and what you should rank for.
Keep in mind that some of the best affiliate sites out there are built by businesses whose workforce have expert knowledge of a particular area. This is true of gambling too – so if your knowledge is in poker, then aim for the poker market, or if you are a soccer betting fan, then choose that field instead.
2. Decide on your preferred marketing channel
There are many ways to build traffic as an affiliate – SEO (Search Engine Optimisation) is one of the most common, as is Pay Per Click Advertising, Social Media, including Twitter and Facebook, Email and Direct Marketing.
Let’s look at the two most frequently used traffic sources – PPC and SEO.
Pay Per Click has been a tried and tested traffic source for both operators and affiliates in the UK for many years, but it is extremely expensive. PPC ads are the paid spots that appear above the organic search results in Google or other search engines like Bing. One click for a competitive keyword in the casino sector can cost £100 or more which makes it very easy to exhaust your budget if you are not careful and requires patience and careful monitoring to ensure a decent ROI. PPC is also dominated by bigger affiliate businesses with large budgets and a wealth of experience. So new entrants should always tread with care!
SEO is an easier entry point for new affiliates but takes a lot of time and effort to rank for. Google has become increasingly adept at identifying ranking techniques that break its rules and new sites must focus on quality content and legitimate link building techniques to raise their site up through the index. The rewards for those who do so successfully though can be huge. Top placements for competitive and high traffic keywords will earn affiliates $10,000s per month in commissions.
For both PPC and SEO your choice of keywords will be important too. Keywords vary in quality – user intent is explicit in the choice of keyword and ones like ‘real money casino’ will convert better and deliver better value than ‘no deposit bonus’ or ‘no deposit free spins’. Other useful opportunities can be found in niche payment terms for example, like Apple Pay Casino ranked by a few UK affiliates or eCheck Casino in Canada found on similar Canadian gambling affiliate sites.
By spreading the net wide, to begin with, affiliates can find opportunities off the beaten track with less competition and better rewards. This is key to making your business a success.
3. Choose your partners and negotiate your deals
Finding suitable partners to work with is also vital as you set up your business. Not every sportsbook or casino is the same. They will offer a different choice of games and markets, operate in different territories, accept different payment services and give away different bonuses to new customers. The important point here is to match up the right operators with your traffic. If you are a slots affiliate, look for brands with a wide choice of slots, and if you drive premier league betting customers, look for bookmakers with the best premier league markets and odds.
You’ll also need to negotiate deals with each partner. Most run on Revenue Share – a share of all revenue from each player – or Cost per Acquisition (CPA) an upfront payment paid per depositing customer. Which you choose will depend on your cash flow needs and how you feel about risk. CPA is good because you know where you stand and can model your business easily, but Revenue Share can be preferable when you bring in bigger customers.
Many affiliates choose to mix up CPA and Rev Share for the best of both worlds.
4. Spread your risk
If you have the time and the money it’s worth spreading your risk, particularly if you work with SEO. Google’s continuous algorithm volatility and the competitive nature of the industry means that maintaining your rankings or traffic from any one source for long is very difficult. Even some of the biggest SEO affiliates have taken a tumble from time to time.
Having more than one website generating traffic and conversions at any one time is therefore preferable. It is also advisable to try to target more than one market. Using a multi-geo approach is common amongst affiliates now, enabling them to leverage their domain authority to earn traffic across 3, 4 or even 10 or more regulated markets.
That is just a brief overview of the pros and cons of affiliate marketing in the gambling sector today, and some useful tips on how to get started. It may feel like gambling is an intimidating industry for beginners but there are still plenty of affiliation opportunities for those brave enough to take it on. If you choose to do so then plenty of planning and competitor research will help you to be successful. Good luck!