Sky Bet End Affiliate Programme
Affiliates have been used since the advent of online betting sites so Sky Bet’s decision to end their affiliate programme has sent shockwaves through the industry and some fear this may be the beginning of the end for the affiliate model in iGaming. But are the fears justified?
Affiliates often take the role of advertisers and they build and promote websites to encourage visitors to sign up. The affiliate then takes a share of the revenue the betting company makes, a payment for each new sign up or a combination of the two.
Affiliates in the past have often used underhand tactics to target customers such as using out of date promotional material that promises offers that no longer exist and opting customers into receiving spam email and text messages. This has led to an investigation by the Information Commissioner’s Office.
Sky’s decision to end their affiliate programme has surprised many. A spokesman for Sky said:
Following a comprehensive strategic review, Sky Betting & Gaming has decided to close its UK affiliate programme. This difficult decision has been taken to give us more control of our marketing outputs and standards to ensure we can continue to meet the changing regulatory requirements in our sector. We’ve notified all the companies that will be affected by this decision and would like to sincerely thank them for all their support and hard work in helping to grow and promote Sky Betting & Gaming’s brands since we launched in 2000. We’ll continue to work with our affiliates for the next 30 days, and a dedicated team is in place to respond to all inquiries.
What Will the Effect on Sky Bet be?
The hugely popular Sky Sports News is almost a mouthpiece for Sky Bet and the Sky Bet brand is often used as an expert when discussing probability.
This continuing close relationship between Sky and Sky Bet is slightly surprising though as Sky sold off most of its stake in Sky Bet back in 2014 to help pay off debts of £6.3bn. Private equity group CVC Capital Partners bought a controlling stake in Sky Bet for £600 million.
The long-term licencing deal that Sky have with Sky Bet has maintained the status quo and this arrangement works so well that the simple truth is that Sky Bet have calculated that they don’t need affiliates to recruit new players. The revenue increase that could happen if they are not obliged to share revenue could well counteract the lower new customer rates.
Is the End Nigh for Affliates?
Whilst Sky Bet’s decision is surprising and will no doubt cause a few affiliates to become anxious, it is worth repeating the very unique position Sky Bet are in and it is doubtful that other online betting sites will follow suit.
Sky are still the number one supplier of football to the UK audience. Last December the company announced that the company made a half-year profit of £679 but more importantly for Sky Bet, it said that out of the 30 biggest audiences for live Premier League matches, 29 of these were broadcast by Sky, giving them a big edge over main rival BT Sport.
This gives Sky Bet promotion that no other betting company can compete with. Subsidiaries such as Oddschecker, TeamTalk and the hugely popular Football365 websites only compound the influence Sky and, indirectly, Sky Bet have in the online gaming market.
Some of the nerves from affiliates, however are quite justified when you remember that only a few weeks ago Paddy Power/Betfair revealed details of a ‘one strike’ policy for affiliates. The new measures include no SMS marketing by the affiliate, advertorial marketing or pop unders (this is a variation on the pop-up window, the pop-under advertisement, opens in a new window under the active window). They are also demanding that any in-house design work produced by affiliates is personally signed off by a member of their staff.
So, whilst the days of the affiliate are unlikely to be over, the Gambling Commission’s determination to hold the online betting companies accountable for the actions of the affiliates will no doubt end the ‘wild west’ days of affiliate marketing. Companies that play by the rules, adapt and change, will survive.