FEATURE
PlayOJO is another casino operator
that is using bonuses as a key acquisition
tool. It is offering 50 free spins, there are
no wager requirements and players get
money back on every bet.
Ohad Narkis, co-founder of PlayOJO,
said: “It will remain the same because
we built an eco-system to cope with this,
it is a new brand that only launched very
recently, so we knew at the time these
changes would be coming into effect and
it formed part of the consideration for the
business model.
“Irrespective of any c hanges to
regulation this is the right offer for the
customer. It is still a viable commercial
model and I agree that it is all about
volumes, but without the free bonuses
and free spins you will find it hard to
acquire customers.”
Replacing bonuses
Despite the tax on free spins, Dvir of
Dragonfish said: “I’m 100% sure we
will see more and more sites move from
pure bonuses into free spins and free
bingo cards. This is logical because
when you give free spins, you can give
a lot, and players don’t usually know
how much they can win from it, but the
good thing is you know how much you
are giving away. I think this model is
easier as you know exactly how much
tax you will pay at the end of the day.”
It is a different form of acquisition,
but how much loyalty is there when
players are offered such incentives?
Dvir explained that they play for longer
with free spins and there is more player
loyalty while player value is higher, so
he doesn’t think players believe they are
getting less.
Affordability, however, is a big issue
for some. Ustunel said that when the
new tax comes in Sun Bets probably
wouldn’t still be able to offer 400% or
500% bonuses.
“I suspect not – I believe we will move
away from bonus heavy stuff to more
“We have a revenue share, deduct POC tax and then give
affiliates their share, so if this goes up, the structure will
remain the same. [Affiliates] should take some of the costs”
Ohad Narkis, co-founder, PlayOJO
experiential, as pretty much anyone
can copy a cash offer, we can offer the
customer an experience instead, for
example a holiday. We can circumvent
the tax in a way by improving our
marketing techniques.”
This year GVC’s Foxy bingo and
casino brand, tellingly, signed a deal with
ActiveWin Media to leverage its network
of over 30,000 affiliates to promote the
Foxy Bingo and Foxy Casino gaming
websites in the UK.
By working more closely with affiliates
in order to drive traffic to its site, GVC’s
Foxy is starting to move away from
traditional bonus offers and towards
affiliate marketing.
Should affiliates pay bonus tax?
With online bingo and casino operators
having to bear the brunt of bonus taxes,
should some of the costs be passed onto
affiliates? The operators at the event
certainly believed so.
“The affiliate landscape has changed,
we offer them to work with external
platforms so they can build their own
platform, therefore they can decide on
their own if they charge for bonuses.
I think affiliates should take some of the
hit at least,” said Dvir.
Narkis agreed: “We mainly have a
revenue share, deduct POC tax and then
give affiliates their share, so if this goes up,
the structure will remain the same. They
should take some of the costs.”
Ustunel of Sun Bets had a slightly
different approach, saying they would end
up ‘soaking up the extra costs’ in order
to avoid it affecting their top players and
increasing churn rates.
Ustunel of course is in the envious
position of being able to rely on a major
corporation such as News UK, which
can temporarily take financial hits such
as the bonus tax, but he also pointed
out that a move away from bonuses was
not necessarily a bad thing as it could
leader to higher player values in the
long-term.
Some content providers charge
operators for the use of free spins, so
with the added costs there is an argument
that content providers should also absorb
some of the costs.
Ustunel said: “It depends on the
game really. If we have a big title it
would be very hard to say we want to
do that, if the margins start to get
squeezed on one particular title then
obviously we would look at that…
a lot of operators out there are building
their own bespoke games to avoid paying
content providers.”
Conclusion
Most online bingo and casino operators
are ready to roll with the punches that
the new bonus tax will bring with it.
Although some are not as prepared
as they probably should be and are making
the most of the time they have left by
bringing in large player volumes, many
are already prepared to change or adapt
their business models and marketing
strategy to limit the impact of the
extra costs.
The key is to keep not only player
volumes up, but player loyalty and
retention as well.
It may be that affiliates help share the
impact of the new tax, but also that more
is spent on less traditional marketing
strategies that move away from the
traditional reliance on bonuses and free
spins to draw customers in.
iGB Affiliate Issue 64 AUG/SEP 2017
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