• Basics of Online Gaming Market in USA
    • Online Gaming consists of five distinct verticals, each regulated very differently
    1. Casino 2. Poker 3. Sportsbetting 4. Bingo 5. Lottery
    • Online gaming is strictly a state by state initiative (10th amendment)
    • There are three different types of entities that are authorized to operate and/or administer sportsbetting and online gaming
    1. Commercial casinos
    2. Tribal casinos
    3. Lotteries
    • In USA, each state has taken a different approach to sportsbetting and online gaming when it comes to operating entity and product vertical
  • Basics Facts of iGaming Affiliate Marketing
    • Land based casino operators have used ‘affiliate’ like marketers for decades through the form of junket providers
    • Affiliates are paid by revenue share or CPA (deposit only)
    • Online gaming for commercial casinos is only legal is two states
    • New Jersey (2013) and Pennsylvania (2019)
    • Nevada offers ‘variant’ mobile wagering but requires in-person signup
    • West Virginia false start with Betlucky. Expected to relaunch with FanDuel by NFL season
    • Lottery: Michigan and Pennsylvania offer revenue share and require no license
  • Basic Facts of iGaming Affiliate Marketing • Casino was launched in New Jersey in 2013
    • Sportsbetting was launched in New Jersey in August 2018
    • Mature Markets: Casino represents 50% of the revenue but sportsbetting represents 70% of the players
    • Affiliate marketing is a highly regulated business for online gaming for commercial casinos • Requires a license issued by each state
    • The costs depends on size/complexity of organization and type of license
    • Ranges between $2,000 and $50,000 (estimation)
    • Both New Jersey and Pennsylvania offer the same licensing regime
    • Ancillary Service Industry Provider. Revenue share. Performance based on a percentage of revenue less agreed hard costs deductions (tax, promotions etc)
    • Cost per Action (deposit): fixed
  • Licensed Affiliate Options Industry Service Provider
    • Revenue share of 30-45%, of NET revenue or CPA
    • For each depositing player • Gross to Net: hard costs expenses (taxes, promotions, maybe other)
    • Term: TBD min of 2 years to indefinite • Allowed to act as a super affiliate (needs to be flushed out)
    • Very onerous licensing: 5 years of taxes, all monthly statements, no access to safety deposit box etc.
    • Higher Licensing costs Vendor Registration • CPA: Cost per acquisition • For each depositing player
    • Range varies by vertical: Casino higher than sports and poker
    • Range: $175 – $700
    • Depends on total number of depositing players and quality of traffic
    • Lower costs for licensing and much less invasive questions
  • Opportunity: Sports Betting is a Game Changer
    • In New Jersey (where legal) mobile represents the vast majority of the revenue
    • Online is 80% of the revenue for sports betting New Jersey (where both are legal)
    • Retail only states will need to expand to offer online to be successful
    • Sports betting drives online casino revenue
    • Online casino doubled since Draft Kings launched its casino
    • New opportunities on numerous fronts: more states, new brands, addition of casino or sports betting • Increased competition from affiliate community with introduction of sports betting 82.0% 18.0% Online Dominates NJ Sports Betting GGR YTD Online Retail
  • DFS Brands Have Dominated New Jersey
    • FanDuel and DraftKings has 80% of the sportsbetting market
    • Negative: Bad for affiliates as they are only compensated for new depositing players
    • Positive: incumbent and other brands need affiliates
    • As new states open or expand to add online, non-FD/DK brands will need to include affiliates 83% 17% NJ Online Only Sports Betting Revenue FanDuel/DraftKings Rest of New Jersey 80% 20% NJ Total Sports Betting Revenue FanDuel/DraftKings Rest of New Jersey
  • Pennsylvania is Still Too Early to Tell
    • FanDuel Retail has 9% market share (located outside Philadelphia)
    • Online only launched in May with one online sportsbook (Sugarhouse)
    • Now three online sportsbooks with several more expected to open before NFL start
    • FanDuel and Draft Kings have not launched their online sites • Online Casino not live yet Retail Sports betting GGR Pennsylvania
  • Tips and Process to Becoming iGaming Affiliate
    • Hire a gaming lawyer or professional regulatory person in local market
    • Each affiliate must be sponsored by a local casino in the state
    • This must be completed first
    • Complete the forms
    • Have your regulatory lawyer review everything before submitting
    • Ancillary license: requires on site fingerprints (not sure about vendor registration)
    • Contact the Casino or Sports books affiliate managers
    • Read the restrictive terms and conditions before doing anything
  • Operating as an iGaming Affiliate in the USA
    • Licensed activity – need license to operate
    • Very content driven mainly dependent on reviews and articles
    • All contracts must be approved by Gaming regulators
    • No ability to pay any company supplying services to affiliates based on any performance metric tied to gaming
    • E.g. Revenue share, CPA, depositing new players, signups, active players
    • Sub-affiliate (if licensed with super affiliate) required to have Vendor Registration license (paid on CPA)
    • Only metrics allowed are monthly, hourly, annual fee – solely not tied to performance
    • Restrictions on message to players monitored by casinos and regulators
    • Periodic valuation forms that describe your acquisition strategy and marketing message
    • No ability to advertise on Google in a straight forward manner
    • Facebook permission is difficult to obtain and may be taken away at any time
    • Outside of external marketing tools, not entirely well managed at this time but getting better (cookie stuffing etc)
    • CPAs and Revenue share can be very lucrative especially in new markets