Online gambling is not like live gambling in most countries. It’s not common to see advertisements for online casinos or poker sites. The only ads you see are for brick and mortar casinos. Despite this, online casinos still manage to signup hundreds, and some thousands of new players every month. How is that possible without traditional forms of marketing? Affiliate programs, that’s how.
What Are Affiliate Programs?
Affiliate programs are networks of advertisers that send players to casinos. The agreement is usually setup in such a way that when an advertiser (also known as a publisher) sends a player that signs up and makes a deposit, they receive a commission and/or a reoccurring share of the casino’s profits made from that player.
How Gambling Affiliate Programs Work
There are several components to an affiliate program, but that doesn’t make them difficult to understand. Far from it, actually. Let’s go over each component and you’ll see what I mean.
Role of casino affiliates: The role of the affiliate is to act as the middle man between the player and the casino. They position themselves in areas that the online casino is not to find new customers. This increases the casinos’ reach, without any additional time or financial risk from the casino.
More importantly, however, is that the affiliate’s role is to send quality traffic or leads. The difference between quality and non-quality traffic is that quality traffic is going to back out for the casino. In other words, the leads are more likely to turn into (long-term) customers.
Affiliate Managers: The role of the affiliate manager is to handle the day-to-day tasks for the network. This includes helping affiliates get things they need to market the casinos, as well as get approval for things such as landing pages, banners, advertisement techniques and increases in commissions.
Depending on the size of the program there will (usually) be more than one affiliate manager.
How Do Affiliates Get Paid? Affiliate commissions are made on a CPA or Revenue Share basis. Some casinos and bingo sites might pay per lead, but that’s more the exception than the rule. Now let’s look at how CPA and Revenue Share work.
Affiliate CPA – CPA stands for cost per acquisition or cost per action. What this means is that once the customer signs up and/or completes the desired action, the affiliate is paid. CPA payments are a one time fee.
For example, a casino might pay you $50 once a lead signs up, makes a deposit and generates $100 in revenue for the casino.
The exact amount you’re paid per real money player (RMP) will depend on the casino and your relationship with them. Nearly all casino affiliate programs offer performance tiers too. For example, if you sign up 10 players in a month, you might earn $50 for each player ($500). However, once you cross the 11 player threshold you might earn $75 for each player. That amount is retroactive too, applying to the first 10 players. In other words, at 11 players you’ll earn $825 for an increase of $325 increase, just for getting that one extra player.
The upside to CPA payments is that it’s quick money. You’re paid once your customer hits that threshold. The money is pretty good too, especially if you can send a lot of players each month. The downside is that CPAs are easier to game, and that not all customers sent are quality. Meaning, the casino might pay you $75 for a player that never generates that much (or any) revenue for the casino.
Affiliate Revenue Share – Revenue share (rev share) is the other option. Affiliates receiving rev share will receive a percentage of the revenue the casino earns from each player that the affiliate sends, (usually) for the life of the player. Percentages can range from 15-75%, but again, this will depend on your relationship with the casino.
For example, if you refer a player that generates $500 per month for the casino, and you’re on 50% rev share, you’ll earn $250 for that player, for that month.
There are performance tiers for rev share too. For example, if your players generate $2,000 per month, you might earn 15% of that revenue each month. However, once you cross the $5,000 per month threshold, the casino might bump you up to 30%.
The upside to rev share is that once you build a player base, you’ve created an income stream that can pay you thousands of dollars each month. It doesn’t matter if you lose a player here or there (to other casinos, for example) either, as you’ll have more than enough players to make up for it, not to mention that you’ll be sending new customers each month too.
The downside to rev share is that it can take much longer to build a significant income. When an affiliate is first starting out, their referrals will be few and far between. In other words, you might send one player per month that earns you $5. Each month your income will increase by $5. As you can see, it can take you several months or even years before your income is significant to live off of. This is unlike CPAs where larger sums are paid up front.
There are casinos that will offer affiliates hybrid deals too. Hybrid deals are CPAs + rev share agreements. The amounts for each are lower, but they do give affiliates the best of both worlds.
Casino Affiliates & Negative Carryover – Casinos only makes money when the players lose. When they win, the casino loses. Some casinos absorb those losses while others will pass the losses off to the affiliate. This is known as negative carryover.
When there is negative carryover, the affiliates current balance will have the player’s losses subtracted from it, which can then take the affiliates balance into the red. Some casinos will reset this each month, starting the affiliate back at zero, while others will carry the amount over until the affiliates player base generates enough revenue to take the balance back to black.
Tools for Affiliates
Serious casino affiliate programs will provide affiliates with tools and resources that will help them market the casino and boost conversions. Here are the most common resources:
- Creatives – Creatives are things like banners, widgets or reviews.
- Custom tracking – Tracking is done using custom links or codes that the customer inputs when they sign up so that the affiliate program knows who to pay. Often times you can ask for multiple and/or custom codes so that you can optimize your marketing.
- Custom landing pages – If you have a relationship with your affiliate program and/or you send lots of players, many casino programs will create custom landing pages for you. Custom landing pages can help create a seamless sales funnel so that you can boost your conversion rates.
Rogue vs. Reputable Affiliate Programs
Just like brick and mortar businesses, there are good and bad affiliate programs.
However, bad (rogue) affiliate programs are more rampant online. Since the internet is still in it’s infancy, it’s much easier for a rouge affiliate program to hide from officials and disappear into the night with your money.
Rogue casino affiliate programs are easy to spot (although not always in a timely manner). They won’t pay affiliates on time, or at all, nor do they maintain contact. This is more obvious when payments and contact were just fine, and then all of a sudden fell off.
Many affiliates are weary of new online casino affiliate programs, and rightfully so. So many start up and close up shop 6-12 months later. Many of these guys had no business starting a business in the first place, and others underestimate the costs of running a successful casino and affiliate program. They fail, leave and most don’t pay affiliates what they’re owed.
The reputable affiliate programs are going to be the opposite. They try to help affiliates market their program, pay on time and keep in constant contact. There are no perfect affiliate programs, but some are clearly better than others. At the end of the day, though, as long as your players are being tracked to you, not being poached by other affiliates, and you’re paid what you’re owed in a reasonable time frame, then that’s a decent affiliate program to work with.
Mike Murphy founded OnlineCasinoSites.com and brings 15 years of experience in the regulated online gambling industry to the team, with a mission statement of helping gamblers navigate the rules and laws of playing at legal online casinos world wide.