What Does Market Regulation Mean for Affiliates?

By Lewis Essam, Head of Business Development

Regulation is a tricky thing in the world of iGaming. But what does it mean exactly?

In our industry, regulation focuses on all forms of gambling around the world – bingo, casinos, lotteries and sports betting.

Gambling regulators define industry standards, licencing criteria, business practices, rules of games, marketing and promotional guidelines and financial procedures.

In some more heavily regulated markets, they even govern technology-related compliance and also limits relating to player activity.

Gambling regulations shouldn’t be mixed up with gambling jurisdictions. The regulation defines what an operator and a player are permitted to do, whereas a jurisdiction dictates how the operation is to run within the licencing country.

So how does their work affect affiliate marketing?

Affiliates are a key tool for operators around the world, whether they’re a big setup located in the UK running a UKGC licence, or a small offshore company in Panama using a Curacao licence to target the greyer markets. Regardless of size, the affiliate marketing acquisition tool allows operators to gather new customers without the need to go out and market their products themselves. They pay someone else to do it for them.

Whilst affiliate marketing is a large chunk of acquisition marketing for gambling operators, the companies behind marketing and advertising can be affected by the rapidly-changing regulations and jurisdictions.

Over-regulation concerns

Operators are coming under heavy scrutiny for how they market their products and services. This is also true for affiliate companies, who are having to comply with the regulations imposed on operators. This means affiliates are having to make substantial changes to ensure they’re also being compliant.

Most regulators are watching operators closely to ensure they’re offering safe gambling services to their customers, with the UKGC being arguably the tightest for a long period now (this is excluding the changes made by the Swedish Gaming Authority brought about by Covid-19).

Over-regulation in markets, such as the UK, could lead to many operators moving into grey and black markets to acquire new customers. This will be something many grey market affiliates will be keeping a keen eye on. These market shifts could end up being more profitable for those affiliate companies but could lead to licensed operators and those of us who wish to follow the regulation missing out.

A big scare or huge pain point for affiliates is that a regulator can, at any minute, amend the regulation within the country and state that affiliates can no longer advertise operator products within their market. Quite recently due to Covid-19, the Spanish market did just that and this meant a lot of changes had to be made to ensure we as an affiliate are being compliant to the regulator once again. Thankfully this change didn’t last too long.

Another example is in Ukraine, where they made hundreds of changes to their regulation with one particular amendment suggesting online marketing is banned, meaning all affiliates offering Ukrainian operators would no longer be able to do so. This suggestion was later taken out.

Creating more trust

It’s not all doom and gloom for affiliate companies if markets regulate beyond the operator and form regulatory bodies for affiliates themselves, an idea which is being discussed. It can only serve to strengthen the relationships between affiliate > operator and the affiliate > regulatory bodies and vice versa to create a safer gambling environment for its players. These relationships of late have been tested by the constant changes and proposals being made within legislations.

Players having the knowledge that even affiliate companies are regulated could increase the trust level between affiliate and player, potentially increasing the chances of conversions for operators from the affiliate products.

There are arguments for and against regulation at an affiliate level, but I think we can all agree that creating a safe and enjoyable environment where players can sign up to casinos in confidence should be the ultimate goal of any change made to the way we operate. Even if it means dedicating extra resources to ensure we are compliant.