Gambling · · 4 min read

The Entrepreneurship of Gambling as an Affiliate

How does the iGaming affiliate business work? Find out what kind of entrepreneurs are profiting from the 400 billion dollar industry of internet gambling.

The Entrepreneurship of Gambling as an Affiliate

Offline gambling and internet gaming industry is huge. About 400 billion dollars huge. That’s how much money people are risking every year in casino games, sports betting and poker. And that’s the money gambling operators are after. Along with them, bloggers and web entrepreneurs see the opportunity of quick and easy money. Much like punters, although they have a better chance of making money.

But let’s start from the beginning. Who is profiting in this industry?

  1. The operators. That’s easy. Entrepreneurs build offline gambling venues (think casinos) or launch iGaming sites (think online sportsbooks). Their business plan is to always stack the deck against the gamblers. That’s easy. They set rules so that they always have a guaranteed edge over them. Their secondary job is to create an inviting and friendly place for people to gamble. And then comes the marketing, which in turn will make their enterprise heard. Find an edge, build a welcoming place, promote.
  2. The affiliates. Part of the operators’ marketing strategy is to spread the word offline and online. So they need people to promote their business. These people become affiliates and operators offer them initiatives for their service. Think money. So, gambling companies attract affiliates by giving some of their profits back to them. Profits that come from punters that affiliates bring to their business.
  3. The government. Think taxes. The internet gaming industry wasn’t regulated until recently. Most operators launched their businesses from offshore tax heavens and enjoyed big markups. People were betting from Europe and US, but none of their countries could tax the operators. Now, they require a license. Do you want my citizens to gamble on your website? Get a license. Licensed gaming companies will pay taxes, like any other company operating in the country. Unlicensed companies are not welcome. Think fines and website blocking. Get your business elsewhere.

The need of people to gamble and risk money on their predictions provide wealth for all the above. When a gambler signs up on an iGaming website and places a bet, they are setting a wheel in motion.

The wheel of entrepreneurship in internet gambling

Let’s talk of the business plan from the perspective of an affiliate. I guess that’s probably why you are reading this. The odds of becoming an iGaming operator yourself are pretty slim, am I right?

You build a website. A simple one. Think blogging. Gambling fascinates you. You need to share your tips with the world. You think you are the best bettor and people need to hear of you. Or you just want to help other gamblers understand the ins and outs of the game. A game that is stacked against them.

Wait. That’s not a good strategy.

How are you going to lure them into the gambling world if you say they don’t stand a chance? No, your aim is to give gamblers hope. That’s what they are paying for. Hope. Hope for making money to improve their lives.

A better strategy is to show your (imaginary?) profits. To write success stories. To explain how you or other people did it and are now sunbathing in paradise places. To give them hope that they themselves can make it. And they cannot make it unless they open an account in your affiliated iGaming operator. That’s your punch line.

Your customers are these punters. If you convince one punter to sign-up, you got yourself a customer. A customer that will pay you for a lifetime, as long as they are gambling.

But how? Isn’t your job done when a player signs up?

It depends.

How the iGaming affiliate business works

As a gambling affiliate, you get to choose. You’ll either get paid a fixed fee for every customer you bring to the gambling company or a monthly fee according to the money your customer wagered. Think revenue share. If the punter spent $500 this month, your paycheck can vary from $100 to $250 depending on your affiliate deal – think percentages. The rest goes to your other two partners: the operator and taxes.

Spending in gambling though equals to losing money. In contrast, spending in the retail industry means that customers spend money for goods. They give money in exchange for a pair of shoes, a hat, a phone, anything. Revenue equals to money spent.

In gambling, spending money can actually win more money for the customer! If the punter spends (think bets) $20 and wins $40 back, the operator has lost money. They can’t pay you. Your customer wasn’t a good customer. They were a profitable punter. And these are rarely welcome to gambling companies (PinnacleSports is an exception for instance). Because, if all of their customers were so sharp as to turn the odds around, the operator would shut down their business.

Fortunately for them, they are not. Most if not all of the punters you sign up will lose money in the long run.  Perhaps they’ll have a good month and win money. Be patient. Math doesn’t lie. Next month you’ll get a paycheck.

Besides, the Pareto Principle applies here as well. As an iGaming entrepreneur and affiliate, you’ll make most of your money from the 20% of your customers. These will be your “whales”. Punters with big wallets who bet for the fun of it, not caring of losing thousands of dollars per month. The other 80% of your customer base will keep your business from collapsing. And they will be the ones that will contact you the most.

See? Entrepreneurship in gambling as an affiliate isn’t rocket science. You need a good marketing strategy to make your blog or name heard. Will that be quality, educative posts, and social media engagement? Or shady tactics, fake profit & loss statements and sharing “fixed games” to Facebook? That’s up to you. In the end, what it matters is how many signups you’ll have by the end of the month. And how much money your customers will lose. Then you’ll be a happy iGaming affiliate and entrepreneur. Or not.

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