What is an affiliate?
Unfortunately, there is no universally agreed definition of what constitutes affiliate activity.
The ASA currently defines affiliate marketing as:
‘Affiliate marketing is a type of performance-based marketing where an affiliate is rewarded by a business for each new customer attracted by their marketing efforts, usually with a pre-agreed percentage of each sale. Affiliates typically place ads and links online that direct consumers to the website of a company.’
RAiG considers this definition to be too narrow. In mature markets such as the UK, affiliates provide a much wider range of services than purely lead generation and helping to acquire ‘new’ customers. This could, for instance, involve efforts to help retain existing customers and generally promote brands more.
How big is the gambling affiliate market?
In a report into the Gambling Commission (February 2020), the National Audit Office cited a figure of £301m for 2017, although they do not provide a definition to show exactly what affiliate activity this covers. The report also showed that the market had grown less than 3% per annum since 2014.
In order to give an idea of how this relates to the wider gambling market, it is widely accepted that affiliates deliver between 30%-50% of acquisition to operators in the UK and collectively, members of RAiG reach millions of unique customers each month via their websites and products.
Why do operators use affiliates?
Operators use a wide range of advertising and marketing routes to promote their products and services. Within that, the affiliate sector provides additional marketing techniques that operators do not use themselves to reach a broader target audience.
This form of advertising is commonplace in many industries such as retail, travel, hospitality, insurance and finance.
Why do consumers use affiliates?
Similar to other industries, affiliates provide a valuable service to consumers.
Primarily because they provide added value. This value can take many forms such as the ability to compare prices and products; interesting and engaging content (for example, about sporting events); and the provision of special offers.
Should affiliates be regulated?
Affiliate activity is currently subject to regulation by the Advertising Standards Authority (ASA). However, there have recently been calls for affiliates to be subject to an additional licensing regime to be operated by the Gambling Commission.
RAiG believes it is important that a proper assessment of the potential benefits is undertaken before a decision is reached on this important issue. In the final instance, this would be for the regulator and government to address, but RAiG stands ready to cooperate fully in that process.
In the meantime, RAiG has concluded that licensing by the Gambling Commission does, in principle, provide the best way to raise standards across the whole gambling affiliate sector and improve safeguards for consumers.
Are current regulations sufficient?
The current regulations are already wide ranging, and the ASA keep them under active review. Operator interpretation of regulations can differ markedly and there is no overarching, cohesive set off compliance standards communicated to affiliates.
Compliance is reportedly high, but the diversity of the affiliate sector and a definition of affiliate activity which may not be broad enough, leads RAiG to believe that further action is necessary and therefore fully support the rollout of a licensing framework detailing what is and is not permitted, particularly regarding digital marketing and social media.
Why aren’t affiliates licensed in the same way as operators?
The Gambling Act 2005 requires all operators who provide gambling products to British consumers to be licensed by the Gambling Commission. It does not contain that provision for those who market or promote such licensed gambling services.
The Gambling Commission has stated that it will hold its licensees responsible for the activities of the affiliates that they contract with. In their opinion it is argued that this negates the need for direct licensing of affiliates. However, we have seen in many regulated markets (US/Romania) that a licensing system for affiliates can have significant benefits such as preventing the marketing of unlicensed operators and the completion of formal KYC and due diligence checks of affiliates.
What is to stop affiliates in the UK working with black-market operators?
Under the Gambling Act 2005 this would constitute a criminal offence which would be prosecutable by the Gambling Commission.
A licensing regime for affiliates would further ensure that as a condition of said license, all black-market operators would have to be removed from affiliate sites in order to work with licensed operators.
What can be done to minimise the amount of marketing seen by the young and vulnerable?
Both operators and affiliates have data that can help to minimise the amount of marketing seen by the young and vulnerable. ASA regulations and voluntary codes already exist which have been designed to achieve that.
RAiG’s position is that these measures can still be improved upon and in collaboration with other stakeholders is exploring what practical improvements can and should be made.
Do affiliates age verify their customers?
No. Unlike online operators, affiliates do not require customers to open accounts with them and therefore do not hold the level of personal information required to undertake reliable age verification checks.
In order to assist with limiting the opening of underage accounts, there are regulations in place to prevent affiliates from targeting under 18s and they are subject to regulations which prevent them from doing so.
Why is RAiG’s focus solely on the UK?
Given the complexity of marketing rules and regulations, and the many differences between jurisdictions it was decided to focus on the UK as the largest licensed gambling market.
Many of the actions taken by RAiG in the field of good practice and safer gambling should also be applicable in other countries, but RAiG’s founders and new members remain very mindful that the majority of their marketing is focussed on the UK.
How does RAiG ensure its members are socially responsible?
As a condition of membership all RAiG members must successfully pass a third- party social responsibility audit. This audit is undertaken annually.
RAiG has published a paper with details about the audit process. It can be found at https://www.raig.org/news-press/press-pr-page/responsible-affiliates-in-gambling-introduces-social-responsibility-audit/
Are affiliates aware of the harm that gambling can cause to a minority of people?
This concern, as well as the need for affiliates to play a full part in the wider British safer gambling initiative is exactly why RAiG was established.
What more can affiliates do to safeguard their customers?
RAiG will continue to assess ways in which this can be done. For example, areas under consideration at the moment are improving the provision of useful information on affiliate sites; specialist training for affiliate staff; and options to minimise marketing to the young and vulnerable.
What other organisations does RAiG engage with to identify new safeguards for affiliate customers?
RAiG engages with a range of reputable organisations, such as YGAM, GamCare and Betknowmore UK.
Does RAiG engage with regulators?
Yes. It is important to work in cooperation with regulators and other stakeholders so that there can be a mutual understanding of the issues. This will provide the best platform to identify and implement proportionate and effective solutions to the challenges that emerge as a safer gambling environment is shaped in the UK.
How can RAiG help to improve the sector’s reputation?
One of RAiG’s objectives is to put a face to the UK gambling affiliate sector so that it has a voice in the decisions which will affect it. By focussing solely on safer gambling rather than the range of other issues that impact on affiliate marketing it clearly signals what its priorities are.
Like any other organisation it will be judged on its actions, but by delivering on those and hopefully encouraging like-minded non-members to do the same, RAiG will help to improve the sector’s reputation.
Alongside that, it has a role to play in educating opinion formers about the realities of the sector and the steps that RAiG is taking.
What are RAiG’s membership subscription fees?
They are £20,000 for full membership and £5,000 for associate membership. There is a commitment that these will be reviewed on an annual basis.
Aren’t the fees too high for most affiliates?
Whilst RAiG is committed to raising standards across the affiliate industry, members are mindful that these fees are likely to be prohibitive for most affiliates and will be seeking opportunities to share information and services with the wider affiliate sector for no, or minimal charge.
This would include, for instance, providing complementary places for non-members at any events that it might organise as well as freely sharing codes or content that it develops in addition to working on behalf of all affiliates to engage operators and regulators.
As above, RAiG welcomes outreach from any non-member for advice or guidance.