iGB Affiliate 72 Dec/Jan 2019 | Page 44

INSIGHT INSIGHT ONWARDS AND UPWARDS With more US states lining up to take advantage of the PASPA repeal, and a knowledgeable player base there for the taking, Erica Anderson considers whether 2019 will be the year when affiliate marketing reaches its tipping point “THE TIPPING POINT is that magic moment when an idea, trend, or social behaviour 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 PASPA and the imminent launch of the Pennsylvania igaming market, is affiliate marketing reaching its own tipping point in the US? One thing’s for sure: 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 and stickiness The affiliate channel’s growth has been slowed in the US by limitations at both a vertical and a market level. Until its repeal in May, PASPA prohibited single-event sports betting outside of Nevada (pop: three million), a state that regulated ipoker in 2013. New Jersey (nine million), whose igaming market also launched in 2013, and Delaware (one million), both went live from 2012 and remain the only states offering both online poker and casino. 40 iGB Affiliate Issue 72 DEC 2018 / JAN 2019 These contextual limitations aside, New Jersey, the largest igaming market, has actively embraced the affiliate channel. The Division of Gaming Enforcement (DGE) licensed affiliates from launch, with a free vendor registration required to promote on a cost per acquisition basis, or an ancillary CSIE licence costing $2,000 for revenue share deals. In addition to the documentation required by the DGE, Adam Small, CEO of affiliate business DGS Media, points out that applying to join a New Jersey brand’s programme can be a rigorous process. “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 “The best affiliates will keep getting more professional and sophisticated, with larger and more expensive operations” 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. 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 has revealed 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 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