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Affiliate marketers are among the groups most affected by Ontario’s marketing restrictions, and some larger affiliates say the restrictions have made it difficult to invest heavily in the province.
Ontario’s regulatory standards for online gambling prevent any public advertising of inducements, such as bonuses, free bets, or any other kind of offer designed to entice players to a site. Inducements can only be offered on an operator’s own site, as well as through direct marketing which a player has opted into via an operator’s site.
Although many headlines related to the restrictions have focused on television advertising and other mass media, the prohibition also extends to affiliate sites, and several affiliate representatives during last week’s Canadian Gaming Summit grumbled about their effect on the market.
“A lot of the language around inducements was a real challenge for us, because a lot of what we do is promote bonuses,” said Andrew Garven, head of marketing for Covers.
“Not just from an editorial standpoint, but also from an SEO [search engine optimization] standpoint, and having to geofence our site to make sure that Ontarians were just seeing the information that was available to them and they were unable to see bonuses in other parts of the country.”
“That's the number one thing consumers want to know,” added Dustin Gouker, vice president of North America content for Catena Media. “And it's a mystery to them and we can't provide them that information.”
One of the issues, Garven said, is that at such an early stage of a new regulated market, bonuses are one of the few differentiators between many similar products.
“You try to promote as an affiliate by getting creative around product and what differentiates brands, but when the market is still really young, there’s maybe not a ton of actual differences,” added Allan Petrilli, vice president of sales and growth for Intelitics.
JD McNamara, country director for Better Collective, said the Ontario rules make it more difficult to transition players away from unregulated operators and to registered sites.
“Removing some of the information from them is actually probably doing more harm to push players to grey-market or even black-market books because we know they're out there and [unregulated operators] are out there pushing that information that we cannot,” he said.
Gouker added that it also makes it challenging to identify how much of the grey and black market is really being transferred to the regulated market, particularly in lieu of revenue figures yet to be released by iGaming Ontario.
“Operators are out there playing whack-a-mole trying to figure it out,” Gouker said. “Bonuses are not allowed to be talked about … so you’re not getting all customers that you can, and until you start doing that, you’re just not going to realize the full potential of what the Ontario market can be.”
Petrilli said the rules also create an uneven playing field given the preexistence of grey-market operators for years prior to them being able to apply for licenses to join the regulated market.
“It hurts new operators to the market when they can’t talk about bonuses when bet365’s been doing it for ten years in the market, and they’ve been promoting their offers publicly everywhere and they have a massive database,” he said.
“If you’re trying to move users from established grey-market [operators] that have moved to a regulated market, it’s very difficult when you don’t have a leg up to say, ‘We can offer you that as a user, try us’,” he said.
“It’s hard to be like, we do responsible gambling, please come to our site.”
Some affiliates pushed for channel-based exceptions for the rules that would keep the prohibition on bonus promotions and other inducements for television-based ads, but allow them for more targeted advertising on affiliate sites.
“They’re already pre-qualified because they’re looking specifically for that information … and that information is valuable for them to choose which one,” McNamara said of players visiting affiliate websites who compare gaming affiliates to those in other industries, like consumer product reviews.
“We all agree, nobody wants to see $5,000 free bets all over TV every night,” Petrilli said.
“But if someone’s doing an internet-based search that wants to know about bonuses, these guys should be allowed to educate them on what they’re getting themselves into when you get into an operator’s site.”
The result of the rules, many affiliates said during the conference last week, is a lower level of investment into Ontario affiliate sites.
“We’re onto other things right now because it’s so hard for us to convert players,” Gouker said. “We’re still bullish on the Ontario market writ large over time, but right now it’s hard.”
“It’s hard to put something into the development pipeline and have people spend hours and hours to work on,” McNamara added. “We’re willing to do that if we know what we can and can’t do.”
In addition to advertising restrictions, there have been challenges for affiliates regarding marketing for regulated and unregulated operators on their respective sites.
Jay Welbourn, senior manager of technology regulation and compliance for the Alcohol and Gaming Commission of Ontario (AGCO), said there has been some confusion in the market that the regulator has sought to clarify.
“In order to do business with the many regulated operators in Ontario, affiliates cannot advertise gaming sites that are not registered by AGCO and who continue to operate in Ontario,” Welbourn said.
That includes operators who continue to operate as unregulated pending registration with AGCO, Welbourn said.
“Simply put, if the gaming site is available in Ontario, but it’s not regulated in Ontario, the affiliate cannot advertise it,” he said.
“Affiliates are free to choose whether they want to meet the standard or not, and that will determine which commercial relationships they retain and pursue in the future, and which they’ll have to abandon.
“They cannot straddle both the regulated and unregulated market.”
The AGCO reported last week that it has received 72 applications to date for sports-betting registration in Ontario, which Welbourn called “a powerful incentive for these affiliates to make the right choice.”
“AGCO has already been working with the regulated operators to make sure their affiliates understand the standards, to make sure that their affiliates understand the standard and to move them toward compliance,” he said.
“And in the coming weeks ahead, it will become apparent which affiliates can benefit from the opportunities coming from this market, and which ones will be shut out.”
