Will land casinos going "online" hurt affiliates?

[WCD Admin]

Another thread was going left, so made a new thread for the discussion of whether or not land based casinos going online will hurt current online gaming affiliates.

Here was some of the stuff:
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I'm pretty sure if the USA allow Vegas Casinos to operate online legally, players will flock to these venues, because as you say "why would anyone play at a casino where you have trouble depositing and cashing out, where there is always a question IF the casino is cheating or not and IF your going to paid."
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Here were some of my points

1) Harrah's etc, won't be able to get the same rankings or same coverage as other outfits (especially with no affiliate program) -- are you or anyone else going to advertise for them without a program to pay you?

2) Other programs aren't going away - these guys have hundreds of millions. If you have to be licensed to operate they will simply setup a new corporation and move to Las Vegas! Imagine the conventions that will be starting up again in Vegas! - It won't be possible to keep us out of the game in my opinion.

3) Once the big boys go electronic, they will be at the same risk for fraud and cheating as everyone else and will (presumably) be regulated by the same standard (depending on where they are licensed) ...


any other thoughts? I think this is a valuable topic.

 

[arkyt]

1) Harrah's etc, won't be able to get the same rankings or same coverage as other outfits (especially with no affiliate program)

Why wont they have coverage? If its made legal you can bet they will have advertisements on the most popular websites, search engines, etc. They will also have TV commercials, magazines, newspapers, land based casinos etc. They will have contact info for all their land based gamblers...they will have plenty of coverage.

 

[WCD Admin]

Yes, but why wouldn't any other online gambling outfit that goes through the licensing process be allowed commercials or ads? And why wouldn't portals who advertise these properties also be allowed in the PPC models, etc? In the end, it will open up the door to competition and bring the players back to the review sites, portal sites, etc. Especially when the land-based casinos don't offer the same bonuses and/or don't know how to handle the online player / retention, etc. Portals might do pretty well sifting this information for the players especially if the gates open and there was plenty of confusion: if the land based casinos software sucks, reviews, etc...

And if the above happened to be true at all --- why wouldn't the land based casinos entertain the affiliate model? ... The junket business is basically the same thing as the affiliate model and is a multi-billion $ industry. These are land base patrons being brought to the land casinos with special deals, etc, and the organizers (junket / affiliate) get paid depending on how much is wagered on a slot card or other metrics .

By the way I'm arguing for the sake of opening up the conversation, not because I'm convinced one way or the other...

 

[Simmo!]

I'd add three points:

Firstly, if the affiliate model is a profitable form of marketing, it makes business sense to utilise it.

Secondly, Harrahs have already got a contract with Dragonfish for Caesars in the UK at least which uses the Uffiliates system and trackers.

Finally, "multiple" land-based groups are holding discussions with two major online gaming companies as part of the process of evaluation. I was told this in confidence face-to-face with one of those suppliers fwiw. That doesn't really mean a lot as you'd expect them to investigate all angles anyway.

However, on that basis, I think there is a future for affiliates with land-based operations, most especially the smaller groups who see online as a chance to level the playing field a little, although I think the landscape will change in terms of commission structures and T&C's and whether that would be an attractive proposition, only time would tell.

Cheers

Simmo!

 

[hogar]

I would like to point out that running land based casino and online casino is not the same, nor the players in those two casinos are the same. I think that sooner or later they will realise they need affiliates to be truly successful online.

 

[bonusgeek]

Unless the owners and shareholders of the land casinos are ok with leaving money on the table then I think there will be a place for affiliates. This is our turf, there is tons of traffic to be had from affiliates and I think the land casinos going online would be foolish not to accept it.

However it will probably be something along the lines of what Bodog does in that they are more selective with who they partner with and commission rates might be smaller which I can probably live with if I know I am getting paid for every player instead of a portion of them.

But it's all just a guessing game really though. Vegas companies have the nuts in everything they do so I wouldn't be surprised to see more of an attitude like they are doing us a favor allowing us to send them players and offering use peanuts for commissions.

 

[lots0]

I just spent 30 minutes writting a response and lost it, when I hit the backspace key.

Sorry I can't waste anymore time.

 

[HBKKH]

I think we will see land based casinos try and buy as many aff sites as possible to quickly assert themselves onto the net.

 

[Nicolas-Johnson]

Hi Guys and Gals,

My 2 cents:

I think whether it will 'hurt' or 'help' affiliates in general very much depends on the way the licensing is done.

Many times, taboo businesses end up with such restrictive regulation that it ends up creating oligopolies.

If this is the case, then affiliates will likely suffer. Affiliate marketing, while a generally providing a secure ROI, generally greatly reduces the profitability of a gaming company. You have to remember that 30% Rev Share on Deposits-Cash outs is a lot more then just 30%. First, if there is no negative carry over you have to add a considerable amount.

But then you have to remember most operators have very large expenses. Office space, equipment, permissions, salaries, processor minimums, taxes, payment gateways expenses, software licensing, progressive jackpot contributions and the 1000s of things an operator has to pay for makes it so that most affiliates end up getting 50%+ of the real profit. That is a lot when you compare the initial investment each side did.

I'm not saying you guys aren't worth it! But I am saying that if there is to be an oligopoly type situation going on, or even a situation where only a few very large operators get licensing, there will be little incentive for them to give such huge % of profits as most companies are currently doing. Especially when they can count on traditional marketing vehicles that are currently unavailable, and which they know well.

However, if, on the other hand, the US market opens up fully and competition flourishes, then affiliates should do well. In a booming, healthy, and competitive market, affiliates should always do well as companies need to aggressively compete for market share.

 

[Vladi]

1) Harrah's etc, won't be able to get the same rankings or same coverage as other outfits (especially with no affiliate program)

I disagree. Harrahs for example is ranked on page 1 google for the term 'casino' already.

In addition they have enormous existing brand recognition and they also have databases of tens or even hundreds of thousands of players who have stayed and played at their casinos which they can market to. A gold mine that every online casino in the world would love to have.

Their need for affiliates is very low. These companies aren't some 2 man rival shop who bought a domain and a white label and have no idea how to acquire players and manage a casino.

 

[lots0]

OK I got some time now and I am over being pissed off about losing another post (my fault - not the boards).

1) Harrah's etc, won't be able to get the same rankings or same coverage as other outfits (especially with no affiliate program) -- are you or anyone else going to advertise for them without a program to pay you?

Like Vladi pointed out, Harrah's already ranks for the big money keywords and cassava has their own SEO department and they are good. A big part of the reason Harrah's partnered with them.

2) Other programs aren't going away - these guys have hundreds of millions. If you have to be licensed to operate they will simply setup a new corporation and move to Las Vegas! Imagine the conventions that will be starting up again in Vegas! - It won't be possible to keep us out of the game in my opinion.

No one involved with online casinos that currently take US players will be allowed to work in or own a licensed online casinos. The proposed Federal Regulations will require background checks of all employees/owners of online casinos, just like the Nevada gaming commission now requires for land based casinos and a record of working for an online casino that currently takes US players will disqualify the person from EVER working in or owning a US licensed online casino.

We as affiliates are not valuable to the existing big names, most of them look at us as parasites that need to done away with...

Some of the bigger portals will get media buys... but I do believe affilaites as we know them will no longer exist after regulation comes... and it is on it's way.


//derail//
@Simmo! I was going to respond to one of your statements, but right now I am really upset with you over deleting my comment at casinomeister about Lou Fabino's shill... Totally uncalled for... protecting a shill... WTF is going on at CM?? No need to respond.. just venting. 8)

 

[WCD Admin]

I disagree. Harrahs for example is ranked on page 1 google for the term 'casino' already.

That is for their land based casinos and I think the primary traffic is looking for that information. I don't see Harrahs defacing their websites or making it more difficult for their bread-n-butter to find what they are looking for. I often see casinocity.com in positions that I'm sure Michael would love to see online.casinocity.com. Clearly google and SEO will weigh in quite a bit. So personally I'd rather hold the #1 position for 'online casino' than 'casino' which is held by an online casino.

In addition they have enormous existing brand recognition and they also have databases of tens or even hundreds of thousands of players who have stayed and played at their casinos which they can market to. A gold mine that every online casino in the world would love to have.

Land gamblers are different than online gamblers, although I agree, they will get a large boost because of that.

Their need for affiliates is very low. These companies aren't some 2 man rival shop who bought a domain and a white label and have no idea how to acquire players and manage a casino.

according to Simmos! post above, "Harrahs have already got a contract with Dragonfish for Caesars in the UK at least which uses the Uffiliates system and trackers." and also that land based operations may be at least exploring existing online gaming software is a sign that they could be having the same games, and therefore will be competing for the online gamblers on even turf with online casinos. (same software, same games, etc) and in turn, Harrah's, etc, would be foolish not to use the affiliate systems already designed to not only draw off their existing land based gambling base, but also to explore and exploit affiliate advertising to steal more players from online casinos that they might not otherwise reach.

And as for players. Once it becomes legal in the USA, fear is going to go down even more and players will of course branch out to casinos that are licensed elsewhere. One other note on players. They play games they like and at casinos they like. I doubt everyone will jump ship just because land based casinos start having online games (especially if they suck) after all there are PLENTY of happy customers right now. Its a billion dollar industry .... I doubt it would just vanish.

I think I'm playing devils advocate because I still am not convinced one way or another

 

[CGP]

At least 85-90% of all depositors in an avarage online casino come from affiliates. The other 10-15% are from dirrect traffic or search engines. There are no online casinos, with a few exceptions, that can survie without using the huge resource of the affiliate marketing. This is the best business model in the current ecosystem of the online gambling and it will continue to be the best one.

 

[lots0]

At least 85-90% of all depositors in an avarage online casino come from affiliates. The other 10-15% are from dirrect traffic or search engines. There are no online casinos, with a few exceptions, that can survie without using the huge resource of the affiliate marketing. This is the best business model in the current ecosystem of the online gambling and it will continue to be the best one.

That may be true in the current market (not to sure about your numbers thou). But we are not talking about the current market... We are talking about the US market after regulation. The US market will be a very very different place after regulation.

Personally, my bank account does not want to see regulation come to the US. Income wise, I like the way things are now.

All you have to do to get a preview of things to come under US regulation is take a look at the way cassava acts toward affilaites now... They don't need us or want us.

As a matter of fact 888's manager and a lot of other casino owners/managers blame affilaites for the banning of the casino keywords across the www and the very bad reputation that online gambling has gotten.

 

[tryme1]

As a matter of fact 888's manager and a lot of other casino owners/managers blame affilaites for the banning of the casino keywords across the www and the very bad reputation that online gambling has gotten.

I don't want to derail the thread, but I used to have a business with one of 888's affiliate managers (not casino related) and he was very frank about the amount of business blackhat and spam affiliates brought their business.

Back on Topic: I think this is a very interesting thread. The thing is: I think you might need to compare a potentially regulated US market with an already regulated UK market. Ladbrokes, Coral, Stan James, Will Hill, etc, etc, all use affiliate marketing to acquire customers. These are the UK equivalents of Harrahs - so I don't think affiliates are going to get cut out of a regulated USA market altogether.

 

[Simmo!]

Back on Topic: I think this is a very interesting thread. The thing is: I think you might need to compare a potentially regulated US market with an already regulated UK market. Ladbrokes, Coral, Stan James, Will Hill, etc, etc, all use affiliate marketing to acquire customers. These are the UK equivalents of Harrahs - so I don't think affiliates are going to get cut out of a regulated USA market altogether.

Valid point. Although the likely effect of regulation in the US is to preclude outside operations - at least at first and in some if not most States - meaning its a less competitive market than the UK.

That said, I still think that if the affiliate model is seen as a profitable way of obtaining players, it is logical to use it irrespective of that.

 

[CGP]

I juts want to add some additional info about the UK equivalents of Harras.
Take a look at the group of Genting Stanley which has over 40 land based casinos in UK and Scotland. This group has hundreds of thousands of players in their land based casinos. They went online a few years ago with Circus Casino and one of their first tasks being online was to impement the affiliate business model and the commission structure for affiliates is even higher than the other programs.

 

[Aussie-Dave]

//derail//
@Simmo! I was going to respond to one of your statements, but right now I am really upset with you over deleting my comment at casinomeister about Lou Fabino's shill...

Ironic...That's something Lou made a habit of too, deleting posts

 

[Aussie-Dave]

I think there are pros and cons for the land based casinos, which I'm sure they're following closely.

If I marketed to the USA I'd be getting my ducks is a row, right about now. If these places go the affiliate route your well ahead of the crowd, if not well it was a risk worth taking.


Cheers

Dave

 

[lots0]

Today British Columbia had it's first legal online casino go live...

www.playnow.com

Take a look folks... the future of online casino affiliates.

playnow... uses NO affiliates... Nor will they... ever.

This is the future of legalized online gambling... Only the big boys will be allowed to play... Better start diversifying affiliate people.