Affiliates plead with MA Gaming commission to alter marketing regulations

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The three major gambling affiliate companies were on hand Monday for a Massachusetts Gaming Commission roundtable discussing the practice of affiliate marketing within the state. Currently, the proposed regulations for sports betting in the state prohibit operators from entering into either a revenue share or cost-per-acquisition arrangement with a third party. Should the regulation hold, it would essentially prohibit affiliate marketing in the state.

During a presentation to the MGC by Group, Catena Media, Better Collective, and others, they presented a note from Caesars informing affiliates the company would not be pursuing affiliate deals in the state barring a regulatory change.

Operators and responsible gambling expert Brianne Doura-Schawohl were also part of the nearly two-hour discussion where affiliates presented to the MGC how their businesses work and argue why they would benefit the commonwealth, particularly when it comes to converting residents from offshore to legal operators.

The MGC commissioners were concerned about potential responsible gambling issues related to affiliates in the state, particularly if there was an interest in rewarding affiliates to bring customers who bet more via revenue share.

Doura-Schawohl spoke in support of the affiliates, noting they provide a helpful service and have actually been very integral to reporting on responsible gambling issues. She cited Better Collective in particular for great work in communicating with her about coverage.

Better Collective Chief Commercial Officer Karl Pugh was on the call and spoke a bit about CPA and revenue share. The company recently trumpeted the effectiveness of its shift from CPA to revenue share on its Q4 earnings call, noting the number of US partners on revenue share is up to nine.

On the call, Pugh explained that upstart operators benefit from revenue share as a means to maximize their marketing dollars.

“Some of the operators just don’t have the budget to budget to pay the up-front costs associated with CPA,” he explained. Jennifer Roberts, representing Wynn Resorts, agreed that they are an operator who would prefer for revenue share to be an option.

Jaymee Messler of Gaming Society, a venture she co-founded with former Boston Celtic and NBA Hall of Famer Kevin Garnett, also noted that revenue share is an important and necessary part of their revenue stream. Messler noted that the company is designed to appeal to women and create a more inclusive betting experience, something the MGC commissioners have said is important to them in past meetings.

Most operators and affiliates represented on the call were fine with a purely CPA model in Massachusetts. New England Sports Network’s Matt Volk also sided with the CPA approach to affiliates in the state.

One argument that seemed to resonate well with commissioners was the idea of affiliates as a “pull” marketing approach, where people who are already interested in the idea of sports betting are pulled into a marketing offer via search. When commissioners expressed concern about marketing, they mentioned more content on social media that relentlessly pushed betting social media.

With the conversation, the commissioners did say they felt better about the idea of affiliate marketing. The issues at hand now are the pragmatic concern of mobilizing that industry in the span of the two weeks leading up to launch.

There are two major areas to address before the proposed March 10 launch date. One would be to update the regulations to allow for CPA and revenue share, though the latter is facing a steeper uphill climb than the former. The other is to establish a license category for affiliates and put forth parameters for that license.

The commissioners are meeting throughout the week and will look to revisit the rules around affiliate marketing on Thursday.