Affiliate licensing: Time to face up to a regulated reality

8 July 2020

Following yesterday's piece explaining why affiliates in Great Britain should not be subject to a licensing regime, BonusFinder's Fintan Costello sets out why a regulatory framework would benefit the sector. Read the argument against here.

There is no hiding from the fact that we are seeing a new wave of regulation across the globe with numerous jurisdictions looking to regulate online gambling, including large parts of the US and Latin America, and Europe’s largest economy Germany.

At the same time, established markets such as Great Britain and Sweden are in the process of updating existing legislation and fast-tracking further restrictions on the industry.

Many areas of the industry have already adjusted to this approach with operators and suppliers bolstering compliance teams ahead of, or in response to, tougher licensing, advertising restrictions and stricter player protection measures, or when forced to, even tackle multi-million pound fines.

However, one sector that has not had to invest in compliance or licensing (except for publicly traded entities), is affiliates. In general terms, we have largely had a free rein since the first bedroom pioneers realised traffic could be monetised, no matter where in the world that came from.

Two decades later and the momentum has firmly shifted from dot.com to dot.country, combined with a push for increased standards and an emphasis on player safety and responsible gaming, drastically changing the landscape and ensuring that almost every licensed facet of the industry is liable and responsible for its actions.

We have, until recently, not faced any such obligations, however with more countries such as the US opting to licence affiliates and others, such as the UK now floating the idea, there is a growing consensus that this is an inevitable path for the sector .

The devil will naturally be in the detail, but in principle, the advantages are clear and large swathes of our community are in favour. We can vouch for this first-hand having been through the US licensing process in five states, successfully securing them all.

We also recently joined Responsible Affiliates in Gambling (RAiG) whose aim is to foster wider initiatives in the GB affiliate sector to promote social responsibility and create a safer gambling environment for consumers.

This messaging is vital and fully aligned with the drive for change being seen across many of the world’s most important regulated markets. You only have to read the detail of the recent APPG and House of Lords reports to see that several measures will soon be in place to ensure players are further protected.

Taking responsibility
Many of us have already been voluntarily self-regulating. But to standardise and further professionalise our sector, many affiliates, ourselves included, feel that the right, and arguably the only way to achieve this, is for minimum requirements to be set out and implemented by a form of licensing or registration process.

Some will be concerned that licensing will bring further upfront costs and longer-term investment or require onerous amounts of time-consuming paperwork and additional resources. However, as RAiG suggests, this approach is designed to simply supplement an already extensive range of regulations. Moreover, such a system need not be expensive nor burdensome. You only have to look to the GB Gambling Commission’s direct licensing of third-party suppliers, the provision of approved lists of Alternative Dispute Resolution providers and software testing houses to see the successes this has had.

The more registered, vetted, and licensed businesses within a market, be they brands, content aggregators or casino comparison sites, the more transparent, visible, and safer the jurisdiction for authorities and players. Combine this with common sense regulation and you have a proven model.

And for those that fear bureaucracy, anyone who has signed up for an affiliate programme in the UK will know this is very much like applying for a licence with information required on the company, its ultimate beneficiary or UBO, and marketing channels among other details.

If affiliates are licensed, we are both responsible and liable for our actions, but equally firmly in control of our own destiny with certifiable proof that our products and services are fully compliant – the best of the best.

The positive knock-on effects are also evident. We are responsible, trusted suppliers, recommended by our peers. We generate increased regulated revenues and are accepted further into mainstream business as we’ve seen other affiliate groups do in the last few years, while our standards and reputation as a community continues to improve and grow in line with other licensed gaming stakeholders.

The positive impact of licensing doesn’t end there with the burden on operator partners also considerably lowering. Today, operator compliance teams are in overdrive. If they aren’t busy shutting down the affiliate channel, they are micromanaging all the content published on their sites and dictating extensive requirements (which often conflict with other operators).

Partnering with a licensed affiliate would eliminate any of these scenarios, ensuring they work with trusted sources who are held to every T and every C within an affiliate licence and regulatory regime.

Level playing field
These are early days in discussions on affiliate licensing, but we strongly feel the time is right. Our area of the industry has operated independently for too long, without consistent standards and regulatory oversight, and it is vital we are as accountable, responsible, and as valued as our partners.

Clive Hawkswood, chairman of RAiG, rightly says, “the aim must be to work with all stakeholders to ensure that any provisions (around licensing) are proportionate and, most important of all, effective in improving safeguards for consumers”.

By licensing and using one voice under associations such as RAiG, and by sharing insights, experiences and data across all elements and areas of expertise, we can alter the course of our future. For the better. This change in mindset won’t be easy for some, but we are convinced that those who don’t adjust, who are resistant to change, or who continue to operate in the shadows of black markets will rapidly fade from view.

Fintan Costello is Managing Director of BonusFinder.com. Founded in 2019 with a simple goal to allow people to Play with more’ at their favourite casino or sportsbook BonusFinder.com has created simple to use tools to allow players of all levels to find the perfect bonus that suits their playing style. BonusFinder operates in multiple European markets and holds affiliate licences in five US states.