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Ready Your Battle Stations - Casino Affiliates are Coming
Online gaming has always been in a precarious situation in the United States. While it’s technically never been legal to gamble online from US soil, the federal government had pretty much turned a blind eye to it… until this year.
Just two months ago David Carruthers, former CEO of BetOn Sports (I would link to it, but I don’t want to go to jail), was arrested while changing planes in the U.S. Then last month Peter Dicks, the former Sportingbet chairman, was picked up at Kennedy International Airport on a warrant. These arrests coupled with increased rhetoric from Capitol Hill lawmakers officially put the online gaming companies on notice.
Last week congress hammered the last nail in the coffin by passing the Unlawful Internet Gambling Enforcement Act of 2006 (I would link to it, but I know you’re not going to read it), which essentially bans online gambling in the United States by making it illegal for banks to accept transactions from online gaming sites.
Previous efforts to outlaw online gaming had no teeth and were rarely enforced. This new bill, soon to be passed into law by President Bush, has lion teeth and has already chased the online gaming companies up the tree.
This week publicly traded gaming companies based in the U.K were reeling after their stock prices plummeted on the news. 888.com and other gaming sites quickly began notifying their affiliates that they should cease promoting their sites to US-based customers, and focus on international campaigns.
What does all of this mean to Revenews readers? It depends on your situation…
Casino Affiliates
If you’re a casino affiliate, it’s time to start thinking about affiliate opportunities outside of the online gaming world. You’ll probably find that these programs are less lucrative than what you’ve grown accustom to, but also less competitive. The same innovation that you used to make a six figure income promoting No-limit Texas Hold ‘em to Johnny Chan wannabes will help you dominate search results for Mrs. Fields cookies.
As an added benefit, you can stop worrying about the two guys in suits and sunglasses sitting in the black van that’s been parked across the street for the last two months.
Traditional Affiliates
If you’re not a casino affiliate, brace yourself for the upcoming jolt that may soon shake up the comfortable little niche that you’ve owned for the last two years. Casino affiliates have managed to survive and thrive in hostile conditions for more than a decade. Even when Google, Yahoo and MSN pulled the plug on them, they found a way to adapt and grow their business.
My advice is to watch what they do. When Google said they had to stop promoting high-stakes online bingo through paid search, they adapted by giving away a free strategy guide for bingo on their landing page. They used the bingo guide as a lead generator to promote online casino offers on the back end.
Online casino affiliates were also among the first to discover that buying old websites with decent search rankings were prime real estate opportunities for casino redevelopment (optimization) projects. Why build a new site and risk getting sandboxed, when you can simply tear down and rebuild an existing site with casino-targeted keywords.
Survival of the Fittest
The bottom line is that we all need to adapt and diversify our income streams. You never want to be in a situation where 80% of your income is derived from one merchant or category. You want to build several streams of income by building out multiple sites in multiple categories.
Ask yourself the following question: Would you rather have 1 site making $1,000 a day, or 100 sites making $5/day?
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Nice post Jeremy! It will be interesting to watch this play out.
Even NPR had a segment on this. They said that the online gaming industry lost approx. 60% of its value overnight.
Jeremy,
Do you know something the rest of us do not know? I read all about the new law and it does not say anything about casino or poker affiliates being prosecuted, or followed by guys in sunglasses.
They obviously are going to have a problem selling to US customers in the near future, and I guess that might cause them to abandon their activity, but not prosecution. Have any been prosecuted as of today?
Obviously you have a strong bias against casino affiliates. And you don’t like them because ….?
Anyway, they are certainly no worse than the no content, fast money Google Adword advertisers who Google is punishing due to a poor user experience.
I think you might be misunderstanding my sarcasm-laden post…
The only point I was trying to make is that it’s important for ALL affiliates to diversify their income streams. The rest of the post was just satire…
Best,
Jeremy
Casino affiliates are one of the very best at adapting. They should be many of them learned the game promoting adult content sites.
The casino niche for US affiliates is far from dead or dying. While it is true that they cannot directly sign up traffic to the casino’s directly, there are alternatives that can make them almost as much as they did fishing for whales.
The standard issue US online gambler, faced with even more hurdles to placing bets online will do what they have always done; head to the nearest casino. This is where present day casino affiliates can capitalize with products that help the gambler become better at it.
There are some very good programs that teach insider techniques covering everything from slots, Texas Hold’em, SportsBook Secrets, Blackjack Strategies and others that have excellent conversions. One that I am very familiar with gets an effective EPC of $0.60. and converts 1 in 60 or so. That is alot better than the average conversion of most casino affiliate programs I have promoted in the past. Payouts range from $27 to around $60 per sale.
There are some interesting un-inundated gaps in PPC when you figure out that Annual visitors to Las Vegas is 36.7M. So when you place ads for gambling help sites in front of those who are searching for Vegas deals, flights, casinos, hotels, etc. (or any other destination where gambling is an option as well as locally based casino on reservations and riverboats) you find that this market is ripe for the picking.
Casino affiliates need to adapt their strategies and focus on list building and new ooportunities to capitalize on sales, because gamblers aren’t going to stop gambling, they will just find another venue to do it in. Casino affiliates can make a good living (some affiliates are earning $60K or more per month) helping them get better at the games they love to play.
Not sure of the policy here on posting links to sites you are involved in, so you can e-mail me and I can send you the link to the programs I have been involved with.
Cheers,
Jim Lillig