Gian Perroni on Live Gaming & Tips for Affiliate Success

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Warren: Hey guys, it’s Warren with Casino Affiliate Programs. Welcome to another video interview where we profile some of the most influential people in the iGaming industry. Today we’re going to talk with an industry veteran, Gian Perroni, who I’ve known for, gosh, I think almost 10 years.
Gian has basically been in every role imaginable in the industry, from affiliate to affiliate manager to vendor. Somehow, he’s still here today, so he must have a real passion for this industry. Today, Gian is the Affiliate Program Director for Fairway Casino, and also the turn key partner manager for Visionary iGaming.
The focus of today’s interview is going to be around the opportunities in live gaming for affiliates, as well as some key advice that Gian is going to give affiliates based on his lengthy experience. Gian, thanks for your time today. Always good to see you. Let’s start out by telling the audience a little bit about yourself, your history, and how you got to where you are today.
Gian: Sure, Warren. As you mentioned, I’ve been in the industry a long time. I started back in ’97, working with some of the early sports books, primarily focusing on fulfillment and direct-mail services for them. I ended up moving into opening our own mailing house. We specialize in producing and distributing CDs. At one point, we were doing between a half a million and one million CDs a month for some of the larger casino companies out there.
In early 2003, I was fortunate enough to get a call to go down to Costa Rica to work with a fledging, just-starting poker site, where I came in as Director of Marketing and spent three and a half years with them, leaving as Vice President of Poker Operations at the time that the UIGEA came in. Moved back up to Vancouver. Since then, I’ve been working with managing poker sites, working with casino sites, primarily focused on both player and affiliate acquisition and management.
Warren: I don’t know anyone personally who has been in the industry longer than you, to be honest. What has kept you in the industry for so long? How come you haven’t ventured out? I think it has been 14 years since you’ve been in the industry.
Gian: Yeah, it has. The easy answer is no boring days. It’s an exciting industry, as you well know. There’s always something new happening. There’s always something in the news. It’s also a very dynamic industry. It’s a place where entrepreneurs like ourselves can do our own thing, have the potential to make a pot load of money, and do it in a way that, it’s a bit Wild West-ish still. That appeals to me.
Warren: Why not other industries? We’re talking about affiliate marketing. We’re talking about the opportunity to control your destiny. Why gaming versus any of the other industries, maybe retail, travel, finance? What’s really the difference for someone watching this interview?
Gian: Personally, gaming appeals to me. I was playing poker in junior high. My mother was a real gambler, so we used to sit around the kitchen table and try and figure out the system, how to beat the roulette table, how to beat the craps game. Needless to say, the lights are still on in Vegas. That’s why I had an interest in it.
When you look around the affiliate industry in particular, I don’t think there’s another vertical where you have the potential to make the same kind of earnings for delivering a single customer to a client. The adult industry, of course, has also been quite dynamic and exciting. The gaming industry, it’s completely global. It’s a little bit more acceptable, and the opportunities, like I said, are just fantastic.
Warren: Our last interview was with one of the largest casino affiliates in the Netherlands. He really mentioned something that stuck out to me. That was live gaming is the future in that market. What is live gaming and why does it matter? Why is it becoming so prevalent today?
Gian: Live gaming really focuses on primarily casino gaming. There’s a little bit of poker happening right now. Basically what it means is the provision of live casino games that are dealt in front of a camera, either in a controlled studio environment, or streaming from a live casino. Now, most of the software providers do one or the other. There’s one in particular, ours, that wants to do both.
Essentially what it does is it helps the players with their trust. The biggest reason that I ever hear from people not gaming online is that issue of trust. They may not trust the random number generators. They may not trust the operator. This is a way to make the actual product transparent.
Warren: Makes sense. With that being said, what are the markets where live gaming is really popular? For example, in the U.S., I haven’t seen it at all with any of the U.S.-basing casinos that still operate today. Is it a non-U.S. play? What are really the markets where it’s doing exceptionally well?
Gian: It is right now. Interestingly, on the U.S., I think that at the time that we start to see licensing and regulation, live gaming will become extremely popular, because the people that will get the first licenses are the larger land-based operators. For them to install cameras on their tables, and they’re already there, is a very simple process for them to stream model.
Right now, though, you’re absolutely right. The market is outside of the U.S. The UK is the single largest market. All of the western European countries are very, very strong. To be honest, in the last couple of months, we’ve seen deposits from over 50 different countries. Everything south of Mexico has had depositors. Greece, of course, is really big. Some of the eastern bloc countries are starting to come online. Yeah, UK first. France, probably second. Then, the rest of the western European countries are the primary markets.
Warren: How about Asia? I know in Asia, live gaming is a hot topic. Asian players are very big on it. What’s happening in Asia, as far as online live gaming goes?
Gian: The Asian market is interesting because there hasn’t been the same degree of success there. There’ve been a few companies that have gone in there. The Asian market, of course, when we talk Asia, it’s such a wide market that I don’t want to put everybody into the same boat.
Baccarat, of course, is the largest game. It’s perfect for a live streaming game. We don’t see the same kind of action with roulette. We don’t see the same kind of action with blackjack. Both baccarat and pai gow are fantastic games for live streaming. I think we’re going to see more and more acceptance in those markets, especially and obviously those ones that are aimed to process.
Warren: You think it’s basically a processing game today? If there’s more available processing, obviously with China and markets such as China, processing is the number one issue. Once that challenge is alleviated, you believe the live will become much more popular.
Gian: Yeah. The processing, and then obviously, the regulation. What we’ve seen recently over in Asia is that the regulating bodies, the governments, have treated transgressions somewhat more harshly in a lot of cases. I think people are nervous about getting into the market, China, in particular, until such time as it’s a little bit clearer picture. We have seen players coming in from, obviously, from places like Macau and Hong Kong. Mainland China, processing is the biggest issue. It’s not an area that we ourselves are pushing into right now.
Warren: As far as acquiring depositors for live gaming, should affiliates be doing something differently? Should they be using different marketing methods? Or is it the standard promote the bonus, etc., etc. game to acquire live game players? I guess my second question to that is, we talked about what live gaming players care about in terms of the trust, but is there anything else that affiliates should know specifically when going out and trying to acquire depositors?
Gian: Yeah. First of all, I think the most important thing for affiliates to understand is that with a proper live gaming casino and a good software provider, you should see higher conversions, significantly higher conversions and you should see better player retention which, of course, translates into higher lifetime value from players.
It behooves you as an affiliate to have a live gaming section, if you don’t already have one, to add live dealer content, to blog, to post, to add to your forums information about live dealer games, because players are interested. We talked about the trust earlier that is inherent to that. It allows you to get a more mature demographic. Roulette is certainly by far the number one game and the most popular. It allows you to go after an audience with a game that has a decent house expectation, provides affiliates with good long term revenue.
From an affiliate standpoint, pick your software provider carefully. Then go out and try and learn as much information about that as possible. It’ll take a while as this part of the industry is building. Again, the players that are coming in, we’re seeing incredible conversion rates and really, really, really good retention.
Warren: When you talk about marketing tools, for example, obviously, most casino affiliate programs will give your banners, your email creatives, your landing pages, etc. Because this is live gaming, are there such things as interactive creatives that showcase that it’s live gaming? How does a player know if I’m an affiliate and I’m number one Google for online casino and I want to promote live? I get I can create a live game section, but how does the player actually know that the offer is for living gaming? Is there anything different that live gaming casinos are doing?
Gian: There are some live gaming casino operations that are providing short demos, etc. over to affiliates. To me, the most important thing is for players to be directed to the sites to play the games for free, to try the demos. For example, on our site you can go to any of the demo games. You can play them for as long as you like. You can interact with the dealer. You’ve got that chat functionality that was made so popular with poker that the players like.
It’s something to be experienced. I think that once players have the opportunity to experience, whether it’s on the affiliate site, or over onto the actual operator site, that’s when the hook is set. Once they realize that it’s the same game, but now they can see the spin of the wheel, they can see the turn of the card, they can interact with the dealer. The dealers should be, and on most of the sites are, professionally trained, well-supervised, professional casino equipment. They’re getting that real casino environment.
In order to do that properly, it’s not having a little widget on your site that spins a wheel a few times. That isn’t really going to do the trick. Get them to the operator site. Get them, obviously, tagged to you. Let them demo. Focus on the demo that they can go and try for free.
Warren: I want to talk a little bit about your prior experience and the different roles that you have played in the industry. I think that would be helpful for our audience. Obviously, you’ve been both an affiliate and an affiliate manager, amongst other roles. Between those two roles, which do you prefer and why?
Gian: Being an affiliate manager is a hell of a lot easier. I get to spend my day talking to my affiliates and helping them with their business, giving them whatever advice I can. I don’t have to worry about the next program that might close down. As we talked about before we started the interview, it’s challenging times for affiliates right now. It’s challenging times for operators.
For affiliates that have built themselves a business, I have fantastic respect for them. It takes patience. It takes balls. It takes, potentially, a little bit of a bankroll. Certainly, you need to differentiate yourself. That’s one of the joys in live gaming is, we now have something relatively new in the casino industry that allows affiliates to go out and differentiate themselves maybe from the rest of them. As an affiliate, I’ve had the same challenge as everybody has, which is, again, trying to cut myself away from the herd. It’s certainly a lot more work than being an affiliate manager.
Warren: Yeah. Definitely. What do you think both sides can do to nurture the relationship and make it better? I think we experience personally a constant battle between the two sides. Someone is not responding or affiliates not doing their bargains. What would be your advice, because you’re one of the few people that has played both roles successfully? Tell us what both sides need to do to make it successful.
Gian: I mentioned patience earlier and I think that that’s one of the key things. Affiliate managers and operators need to understand that for an affiliate to pick up a program, first of all, they have to do their research on it. They need to allocate the real estate and allocate the resources. They need to design a campaign around it. Coming out with an affiliate program promotion that says “for the first 30 days, we’re going to give you 100%” really doesn’t make a difference, because it’s going to take some time. The affiliate managers need to be patient and need to understand that a good partner needs to learn about their business and then take the time to promote it.
On the flip side, the affiliates also need to have patience. They need to understand that coming into me as an affiliate manager and immediately demanding the highest level of compensation or higher, asking me for outrageous CPAs without having even turned on the program, is a little disconcerting. It doesn’t really start a relationship off properly. If both partners realize that they are in a partnership, the success of one leads to the success of the others, I think the relationships go a lot better.
Warren: Who is the real winner here?
Gian: They both are, really. This is an opportunity for operators to have, virtually, an unlimited sales force, but that sales force can’t promote unless they have a good affiliate manager with them. If they do, they can make an unlimited amount of money. It’s a win- win situation. It really is.
Warren: I always hear from the operators that I know, and I probably know over 100 affiliate managers personally, in a variety of different groups, that the affiliates are always the ones making more money than the operator. Is that true?
Gian: Absolutely. Let me qualify that by saying, successful affiliates are. Without getting too much into percentages, especially for operators that are licensees that have a big chunk taken off the top, by the time they pay for their bonusing costs, by the time they pay their staffing and all of those other things, and of course, their licensing fees, processing and etc., you are better off to be an affiliate.
I know a number of affiliates very well, as I’m sure you do, that have gone into becoming operators themselves. The advantage of being an operator, of course, is building a brand and building a long term successful business that will also attract players that aren’t attached to affiliates, which is where you really make the money.
We need affiliates and we appreciate affiliates because they help spread the word. We bring in affiliates even if we don’t make any money on them, and we often lose money on those players. My rule of thumb has been, after all of these years, that every player that comes in that’s tracked will bring in somebody that’s not, whether it’s a friend or relative, somebody they talk to in the pub. The costs of being able to afford affiliates is affordable because of that part of it.
Warren: You’ve written an article for us before on CAP, talking about the various compensation models that affiliates should be looking at. What are the compensation models that exist and why are they important?
Gian: Okay. There are two very standard compensation models that we’re all familiar with and a third one that is starting to gain more and more acceptance. Obviously, the first one is revenue sharing. We’re all familiar with that. It’s simply a percentage of the revenue that is generated by the operator. The benefit to the affiliate is that it’s an unlimited amount of revenue. If you have players that come in that turn out to be whales, you can make a lot of money from them.
The benefit to the operator from rev share is that it’s only paid on performance. If they players come in and they don’t deposit or they don’t redeposit, it only costs them a fixed amount of money. It only costs them that percentage.
Affiliates tend to be, especially in the U.S. market, which we’ll come back to later, affiliates also look for CPA offers. The challenge with CPA offers from an affiliate side is that they’ve now limited themselves to a single payment. From an operator side, the operator is usually paying that affiliate a payment amount that is greater than what they’ve collected at the time they make that payment.
While the players may well end up having a higher lifetime value and becoming profitable, which obviously is the end goal, it can take some period of time. It might take 30 days, 60 days, 90 days. It might take longer. In the meantime, the operator is out cash flow. That’s where the real challenge comes in. A younger site, in particular, can’t afford to do a lot of CPA programs because it absolutely destroys their cash flow.
The third model, which I like, and as an affiliate, which I always angle for, is a hybrid model where I’ll take a smaller CPA and then an ongoing revenue share. That way, I’ve got the CPA that covers my fixed costs, let’s say it’s a $50 CPA, and then maybe I’ll get a 20% or 25% rev share. I’ve got the best of both worlds. I’ve got an unlimited revenue stream, but I’ve still managed to cover my upfront costs immediately by delivering that depositing player.
Warren: On that point, one of the things that I’m hearing a lot in the industry is, let’s just say from affiliate members specifically, that a lot of affiliates are asking for a higher and higher revenue share and CPA rates before even joining the programs. Obviously I can understand the affiliates’ perspective. I’ve talked to many of them about that. What are your thoughts on this?
Gian: It’s definitely out of hand. Coming in, especially to a younger program, and looking for $250, $300, $350 CPAs or higher, frankly, I think it’s ridiculous. I don’t think it’s very healthy for either partner. I think what ends up happening is you encourage operators to either limit the amount of players that you can send to them or potentially hide some of that traffic. While I don’t think that’s a particularly big problem, we’ve all heard about those problems in the past.
If you’re driving traffic and you’re asking more than the operator can afford, it’s still tempting for the operator to say, “Yeah, I want that traffic. We all want depositing players.” Now, all of a sudden, there’s this temptation to say, “This affiliate delivered me 100 players. I’ve got to send them 3,500 bucks, or 35,000 bucks. I just don’t have that cash flow right now.”
I think it’s much more reasonable to either look at that hybrid, or to say, “Okay, we have a relationship that we need to build. We need to start sending players. We need to look at what the actual player value is. Let’s send that first group of players, let’s see what happens to those, and then let’s work with our affiliate manager and come up with a CPA that’s affordable and reasonable, that still makes me as an affiliate money, but still makes the operator comfortable to do business with us.” It seems reasonable. It’s a little tougher to have that conversation sometimes with affiliates.
Warren: Yeah. I think a lot of affiliates today are just concerned about, as you said earlier, operators going out of business or, because of the squeeze in margins, maybe operators not doing the right thing in terms of tracking. There’s definitely the affiliate side of the story as well. It’s interesting to hear from you the sense behind it from an operator’s standpoint. Thank you for that.
Talk to me about the U.S. a little bit, if you don’t mind. I know you have some lengthy experience with that market in your prior days. What advice could you give affiliates who are still heavily vested in the U.S. market. A lot of these affiliates are wondering, “Should I be doing just CPA deals now? Should I maybe switch to CPM, where it’s just a media buy?”
There’s the legal question mark, but more importantly, with programs like BCP and Casino Coins leaving the market, you’re talking about some very major hits that these affiliates are taking. However, they’re still ranking and they’re still getting traffic in the U.S. market. What should they be doing?
Gian: As an affiliate myself, CPA, for sure. CPA or, worst case, a hybrid. I think it would be naïve of all of us to think that what’s happening in the U.S. is finished. If the U.S. truly wants to clean up that market, I think that there’s going to be more action taken. As an affiliate, I would be a little bit nervous. I certainly would be trying to blend my business between U.S. and non-U.S. from a long term strategy standpoint.
Legally, we haven’t run into problems. After all of these years, after 15 years of online gaming and promotion by affiliates in the U.S., there has been one or two cases where an affiliate has been looked at for generating rev share or CPA traffic, as opposed to CPM. That hasn’t really amounted to much of a concern.
It’s arguable that certainly a CPM deal, or even a CPA deal, is safer because now you can just say, “Look, all I did was bring in a customer, and I got paid.” Rev share does maybe cross those lines of saying, “Okay, now you’re participating in the actual revenues that are generated.” If you’re a non-U.S. affiliate, don’t worry about it at all. If you’re a U.S. affiliate that’s doing business in the U.S. and non-U.S., again, it would be an extreme shock if anybody ever knocked on your door.
Warren: Recently in May, I was at the IGNA Conference in Vegas, which is the iGaming North America Conference. There was a lot of talk about what would happen to affiliates if, not “if”, I’m sorry, when legalization happens in the U.S. What do you think will happen to affiliates’ incomes when the regulation does happen? A lot of people are thinking that the commission rates are going to be 5% from Wynn and Harrah’s and everything else. Do you agree with that?
Gian: I think that they’ll be lower. They’ll definitely be driven by the Harrah’s and MGMs and Wynns of the world. It’s up to them to decide how hungry they are or how aggressive they are. What we’ve found in this more unregulated environment is that that competition has caused the higher CPA rates and the higher percentages. There hasn’t been everybody to sit around the table and say, “Okay, revenue share is going to be 20%. CPA is going to be 100 bucks. Let’s all shake hands on this.”
In the U.S., I suspect we’re going to see more of that, because the U.S. right now in the gaming industry, things tend to be very similar. It doesn’t matter really what casino you go into in Vegas, you’re going to get the same kind of deal at the tables. I think that if they get together and decide that they’re going to treat affiliates the same way that, for sure, we’re going to see lower percentages. I would think that we’ll see 15% to 20%, in my opinion. I think we’ll see much lower CPAs.
I don’t think that’s a bad thing, especially at the beginning, because there’s going to be a lot of traffic and there’s going to be a lot of opportunities. Having 15% or 20% of all of that traffic versus nothing is still a fantastic thing.
You’re absolutely right. The U.S. has an extremely mature affiliate base for other products, for retail, etc. There’s nothing to say that they need to go turn that model upside down and go up to 35% and 40% rev share. It’s just not necessary.
Warren: Talking about the legislation in the U.S., and who knows when that will exactly happen, but I know you’ve paid close attention to it. How do you think it’s going to roll out? What do you see as the plan that the government has and how will it affect the legal status of affiliates that are based in the U.S.?
Gian: It’s interesting because I’ve been the guy writing the articles and talking about how people are getting ahead of themselves. I remember we did a conference back in Malta years ago. I’m not sure if you were at that as well, but we had people from Harrah’s and MGM there. They were saying within a year they were going to be online. That was four years ago. Things move slowly in the U.S., as you well know, and things are still going to move slowly. Nobody is going to be online next week or next month.
What’s happening is we’re seeing legislation being proposed, but all of those things have terms and conditions. Way back, it’s got to be at least seven or eight years ago, Nevada said, “Yes, you can have online gaming, but the person on the keyboard has to be 21 and they have to be one foot within our state lines.” That technology just was not available. Now, the technology is there, but is everybody going to have to have biometrics on their computer? There are a lot of things that haven’t been decided yet.
It will happen for sure, and it will most likely happen with poker first, and then we’ll see. Up here in B.C., we have the first province to go with a regulated online casino. They just popped this thing out with very little fanfare, and all of a sudden, it was there. That model will be followed for sure. I think it will happen within the next two to three years. I don’t see a lot of opportunities for people in the next year.
The other thing is, and probably more importantly, there was a lot of hype by the big UK, in particular, companies saying, “Man, this is great. We’re going to be in there and we’re going to be the kings.” The reality is any market and any licensing will go to existing license holders first. I don’t think Harrah’s is spending the kind of money they are to encourage legislation only to have competition come in. I think we’ll see a lot of protectionism. I think it’ll be at least three to five years before anybody that is not in the U.S. currently licensed has an opportunity to get a license.
As an affiliate, I would be focusing on developing relationships with existing U.S.-based operators first. The rest will come, but it’s going to take some time.
Warren: How do affiliates do that today? How do they start building those relationships with the existing U.S.-based guys?
Gian: It is challenging because I think a lot of the U.S. guys haven’t really decided on their affiliate strategy yet. Remember back in the day we saw some of them go over and open up operations in the UK, and they didn’t do too well with it, for numerous reasons. One of the biggest probably was they just didn’t understand the space. They’re used to being able to set up an eight-and-a-half-by-14 letter with a coupon on the bottom and that being effective marketing for them. For them to move online has taken longer because of the lack of necessity than it has for the rest of us.
Affiliate programs will be developed. Harrah’s has had a program for a long time to help send players online. As they come, I think it’s a matter of keeping your eyes and ears open. All of us as a group trying to influence the interest in having an affiliate program. They’re not dumb. They know affiliates are going to be an important part of their business. Yeah, it’s still early days and it’s tough for us to get a foot in the door right now. Build content. Start looking at URLs. Start looking at ways to promote those sites in advance of them going online.
Warren: I guess lastly, any advice that you can give affiliates? Again, you’ve been in the industry a long time. People who are just starting out as an affiliate themselves or maybe they’re in the intermediate stage, what advice can you give them, again, based on your experience and other really successful affiliates that you know and work with?
Gian: Again, I mentioned earlier, differentiating yourselves. You need to be the purple cow. You need to stand out a little bit. Look for niches. Look for things like live gaming. Look for new opportunities coming up, whether it’s a U.S. market, whether it’s focusing on a particular vertical. Build lots of content. I strongly recommend that you spend time on affiliate sites like yours. Spend some time getting to conferences if you can. Meet people. Affiliates, for the most part, are very happy to share their knowledge. If you can get out and meet other people in the business, that’s the fastest way to grow.
Warren: Perfect. Thanks for your time, Gian. It has been great. For anyone who has questions for Gian, please send an email to [email protected]. We’ll be happy to forward those on. Other than that, stay tuned for future interviews with iGaming industry leaders. Take care.