Yesterday, we explored the connections between regulated online gambling and casino affiliate marketing in Europe. Today, we look at that situation in the United States.
As the UK and Ireland a handful of other European economies with regulated online gambling enjoy a livelier stock market thanks to online gambling — and casino affiliates enjoy promoting brands safely and with the confidence of the marketplace — the United States is positioned to reap the same benefits if online gambling is regulated and fully legalized here.
“While casino operators stand to lose some business to online gambling, such legislation might allow them to profit off their own online offerings,” writes Selena Maranjian for TheFool.com, a leading American stock market monitor. “Like other online operations, virtual casinos have little overhead, easy scalability, and potentially high profit margins. Casino operators could even offer benefits and rewards tied to their brick-and-mortar properties, driving additional traffic there.”
“In addition, since online gambling is easier to access, it may draw more gamblers, and perhaps more frequent ones. A study in Canada found that online gamblers spent an average of nearly $10,000 Canadian apiece annually, compared to just over $500 Canadian for gamblers who stay offline. In the U.S., the percentage of college-age males engaging in online gambling has risen from 4.4% in 2008 to 16% in 2010.”
The big question, then, is this: Since a lot of online gambling and Internet poker sites already accept U.S. players now, what benefit would iGaming regulation have for affiliates in the U.S.? Basically, by creating a safer online gaming marketplace, with more brands, and the confidence that payment processing is fully legal and won’t result in any seized funds (as occasionally happens in the U.S. under the current UIGEA laws).
There’s also a larger financial incentive for casino executives: “ … Frank Fahrenkopf Jr. – president and CEO of the American Gaming Association – noted that the global online gaming market has now reached roughly $30 billion,” writes Jeff Hwang for ConceivablyTech.com. “He said Europe is by far the biggest market at $12.5 billion, or more than double the size of the $5.4 billion U.S. online gaming market.”
Europe’s bigger numbers are directly connected to the fact that European nations actually regulate and allow online gambling. So, regulated gaming would arguably mean bigger number for affiliates if it happens in the U.S.
It would also presumably open the iGaming marketplace to many more brands, giving affiliates more companies to promote and more potential revenue streams. It would also give affiliates more chances to convert players by offering better variety, as well as the ability to reassure players of the total legality of gambling online. That would likely boost online gambling and affiliate marketing together.
The taxation issue can be a problem — “Do we tax the deposits … [or] do we tax gross gaming revenues, which makes more sense,” Hwang writes — does this mean an extra tax on affiliates? And if so, would that extra level of taxation be worth the price of a more confident online gambling marketplace?
This uncertainty has already affected the online gaming market in the U.S. Harrah’s, which recently changed its name to Caesars Entertainment, recently canceled a public offering because of “market conditions,” per PokerNewsDaily.
The chance to promote big, instantly recognized brands like Harrah’s is at stake, as well as the chance to open up online gambling in the U.S. to much bigger audience — one that doesn’t fear potential (and confusing) legal issues.
(Remember here that Harrah’s also owns the World Series of Poker brand, qualifiers and tournaments for which are a huge traffic source for online gambling and a general boost to poker affiliate marketing.)
Hwang writes in another article for TheFool.com about the benefits of legalized online gambling would help those working in the industry, including affiliates:
“1. Brand. According to the ‘Gaming White Paper’ revealing the results of a 1,200-person survey conducted by The Innovation Group, brand is the single most important factor when a customer considers gambling online. The paper lists Harrah’s, Caesars (a Harrah’s brand), and MGM as the three most appealing B&M casino brands.
“2. Trust and convenience. If you make a wager online, the first thing you want to do is make sure you get paid if you win. That said, having a bricks-and-mortar casino location lends itself to both trust and convenience. Gamblers could wager online, then cash out at the local casino owned by the same operator.
“3. Cross-marketing capabilities. We’ve talked a bit over the years about Harrah’s Total Rewards program and its cross-marketing capabilities, which have allowed the company to consistently produce above-average results with a portfolio of largely average properties. Harrah’s Total Rewards program now has 40 million-plus members who earn points in places like St. Louis or Chicago, and redeem points at Harrah’s properties in Las Vegas.”
So, while taxation is nobody’s favorite thing, it’s most likely worth the price for casino affiliates operating in the United States.