Why GB online gambling affiliates should not be licensed

7 July 2020

Thomas Jones, founder of BingoSites.co.uk, says that licensing affiliates would likely only benefit the largest publishers and force small but great sites out of the market.

A second piece, this time from the perspective of an affiliate supportive of a licensing regime, will follow tomorrow.

The Responsible Affiliates in Gambling (RAiG) trade association’s announcement that it supports the introduction of a registration and licensing regime for affiliates in Great Britain has absolutely divided the online gambling affiliate community.

The RAiG and its members – some of the largest affiliate marketing organisations in the industry – argues that requiring affiliates to register and obtain a licence would ultimately provide peace of mind to players and ensure they are properly protected.

While this is something that all reputable affiliates support, the method of licencing affiliates is not necessarily the best way of achieving this and, undoubtedly, would benefit the large publishers that make up the bulk of RAiG members while putting smaller affiliates at a disadvantage.

The likes of Better Collective and Natural Intelligence have substantial resources and funds at their disposal and in some cases have already been through the licensing process in other markets such as the US. Small affiliates and one man bands are in a very different position.

That’s not to say that affiliates do not need to do more to ensure they are marketing to players responsibly because they do, but I just don’t believe that registering and licencing publishers will benefit the industry or more importantly, players.

Below, I discuss some of the reasons why.

It forces great affiliates out of the market
While the business of affiliation is often seen as lucrative, in reality it is a hard slog and successful affiliates – whether a big player or a niche publisher – invest substantial resources into their sites. 

To build a site, populate it with quality content, tweak the design and host, maintain and support the domain runs into thousands of pounds a year. Add the potential cost licensing – licence fee, legal fees, etc – and it could be enough to force small but great affiliates out of the market.

Just because a site’s traffic figures are lower than some of the bigger sites does not mean that site is not meeting higher responsible gambling and marketing standards.

It favours those with substantial resources
Building on my previous point, introducing affiliate licensing would clearly benefit those with substantial resources who have the funds and staff at hand to assist with the process. The GB affiliate space is already fiercely competitive, especially for start-ups and small publishers, and I fear that licensing would hand yet more of an advantage to more established companies.

This ultimately does not better protect or benefit players – some of the newer sites are the ones setting the standards when it comes to responsible gambling and safe games. And while licensing will certainly make sure everyone is working to the same standards, I believe it would be the larger organisations that benefit the most.

Just consider for a minute how the Gambling Commission would decide who it would investigate first, would it be an independent site such as ours or one of Better Collective’s most popular brands?

Licensing puts the Gambling Commission under added pressure
What’s more, the RAiG’s suggestion that the Gambling Commission should be tasked with licensing affiliates would put the regulator under even greater pressure at a time when it is already being accused of not being fit for purpose.

Surely the main focus for the regulator should be to ensure that all of its licensees are meeting the standards it requires of them – given the number of fines handed out in recent months it could be argued this is not the case – before asking it to take on more responsibility.

I also believe it is the responsibility of operators to work with affiliates to ensure compliance, and not put that burden solely on publishers which licensing would undoubtedly do.

The regulator would then also be responsible for monitoring and fining affiliates that breach requirements, again putting increased pressure on the Gambling Commission. 

Players could be pushed to the black market
One area I do agree with the RAiG is that affiliates play a key role in ensuring that players are channelled towards licensed operators and not to offshore brands. But requiring publishers to obtain a licence puts this entirely at risk.

If an affiliate deems the GB market to too tightly regulated, and the cost of securing a licence too great, they will likely start to work in other less regulated markets and potentially with unlicensed brands.

This in turn means players lose a vital resource for finding reputable brands and, worse, may opt to play at offshore sites.

I do believe that affiliates could and should be doing more when it comes to responsible gambling, safe gaming and compliant marketing, but I don’t think requiring them to register and obtain a licence is the way to go about it.

Ultimately, this can be achieved by operators and publishers working more closely together and by prioritising player protections over profits or anything else.

The highly competitive nature of the market is already making this happen and I believe that given a bit more time will lead to the levels of confidence and protection that licensing would bring.

Thomas Jones is the founder of BingoSites.co.uk and is an expert on online bingo and the wider online gambling industry in the UK. BingoSites aims to be the go-to resource for UK bingo players and is packed full of articles, reviews and guides.