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2nd Annual Online Bingo Summit - The 2005 Gambling Act, Bingo Networks vs Standalone And Affiliate Marketing

 

Online Bingo SummitTo round up our coverage of the 2nd Online Bingo Summit, I'll take a quick look at a few other themes that were covered during the two days. I'll give a quick overview of what was discussed and some of what for me was the important points of the topics. First of all, there was a panel on online Bingo operators and their duties under the newly implemented 2005 Gambling Act.

The 2005 Gambling Act And Online Bingo Operators

I've reported on the confusion that's surrounded the implementation of the 2005 Gambling Act in the past, and unsurprisingly, this came through in the panel given on the subject. A team of legal experts discussed the implementation of the act from the view point of the actual operators. Online Bingo providers have a number of licensing concerns and legal requirements to adhere to way beyond what a non-gaming site like this one has. But there is one thing we have in common - the new regulations around advertising and promoting online Bingo. As this site, and many like it run paid advertising, we are bound by the same advertising laws as the operators. Considering one affiliate is considering going into TV advertising, we'd do well to take heed of the new regulations.

According to the panel, many in the industry were disappointed at what was considered a badly drafted plan to bring the UK's online gaming sites onshore. A number of people applied for UK licenses, but given the high tax level imposed by Gordon Brown, it's unlikely many will take them up on it. All operators had hoped for a competitive tax level, given the government's pro gambling messages of recent years. As well as 15% gaming tax, many in the industry would also need to pay 30% corporation tax on their profit. The high rate is enough to make offshore licensing the most cost effective method for online Bingo operators. It was mentioned that only 8 of these UK licenses had been applied for, and it was unlikely that they would all be taken up.

With companies going offshore, it was stressed by the panel that they'd need to be very careful about actually physically being 'offshore.' This means that no data from the gaming operation is allowed to be held in the UK. The data from the operation is ok to be accessed from the UK via the web, but there can be no physical data held on UK servers.

The advertising regulations were also covered in some detail, and for me raised some interesting points. For TV there are strict watershed type regulations in place on when ads get shown, to keep them away from children. It made me wonder how that would apply to the online world as well - where there's no real way of restricting the age of who gets shown ad. Despite generally supporting the new regulations as a means of improving the game's reputation online, there was frustration from one of the panelists about the regulations. Jason Chess complained that the Gambling Commission had basically replicated the regulations for what can be show in advertising from the alcohol industry's regulations, severely limiting the amount of creative leeway advertisers could employ before falling foul of the regulations.

Affiliate Marketing - Cost Effective Or Combative?

From a personal viewpoint, the panel on affiliate marketing was the highpoint of the show for me. Affiliate marketing is an important part of Playing Bingo - the advertising we run on the site pays for things like hosting, and my time to put stuff together for the site. Personally, there are a lot of good and points to affiliates in the Bingo space, and I was keen to see how the big Bingo providers valued their affiliates, and how they could see them helping the marketing of a Bingo site.

Jess Luthi of Astro Bingo made a good case for using affiliates as a means of marketing her site. For her, the affiliate channel remained the most cost effective channel she had for acquiring new customers. She also stressed the importance of shaping the offer made to affiliates be one that encourages them to send players to the site. Astro Bingo offer a hybrid deal with a CPA that is only paid when players have paid for and played a certain amount of money. This discourages fraud from the affiliate side, where CPA deals might encourage phantom sign ups and the like. Personally I agree, deals that concentrate affiliates on sending regular quality players could help towards weeding out some of the more fly-by-night Bingo affiliates out there and make the web space a better one for users.

Simon Collins of Foxy Bingo was in agreement about the success of the affiliate channel as a means of gaining players, but also had concerns about the means affiliates were using to gain what he describes as his traffic. Affiliates bidding on his keywords are frowned upon. Certain trickier means of SEO are also not appreciated by the Bingo operators. Simon spoke of the success that Foxy's free £5 offer had brought them, and how useful it had been for affiliates in acquiring them customers.

As an affiliate, one of the big concerns is the poor communication between affiliates and the bingo operators. The much documented problems between Gala Bingo and its affiliates was an example of the problems that can arise. It was discussed how these big companies should value their affiliates more, as they work the affiliates do could be used to inform the companies own marketing and targeting of audiences. A good affiliate can provide both a great insight into his traffic as well as providing ideas for marketing and driving revenues to the site. Affiliates are often able to move faster than providers, and put innovative ideas into practice at a speed a company is often unable to manage due to its size.

One example of this innovation came from Chris Wesson from Little Star Media who was considering marketing Bingo as an affiliate on TV. This is one example of how the affiliate space is changing and developing. Also on the panel was Scott Logan of Bingo Port - this site is another example of the sort of innovation in the affiliate arena. I've mentioned Bingo Port around here before, and there's an interview with Scott on the site. Bingo Port offers an almost live update of players and prizes around a number of the UK's most popular online Bingo sites - prior to Scott launching Bingo Port, there was nothing similar in the space.

Exciting developments like these should be a good indicator of what inventive affiliate marketers can bring to the space and the promotion of the game. Already a number of affiliates are making their mark in new channels of web marketing. With big Bingo providers focused more on traditional means of marketing like TV and media buys on big sites, affiliates are currently feeling their way in newer channels such as video and social networking / web 2.0 spaces. It's the affiliate's ability to target these niche markets that makes them such and exciting opportunity for Bingo operators.

I asked a question 'should companies that use affiliates take a bit more responsibility in the way they worked with affiliate marketers'. For me one of the big problems, with the current Bingo space is that there is a lot of junky replicated content clogging up the search engines. It make's it hard for users to trust what's written in the space or find good information. As a result of this junky info, I ended up making this site because I couldn't find the sort of info I was after. Some Bingo operators offer reviews of themselves for webmasters to publish on their sites, which I find unacceptable and leads to a number of lazy websites out there. The answer was dodged somewhat - but it's certainly an area I'd like to come into sharper focus in the near future.

Networks Vs Standalone - The Debate Rumbles On

One debate that reverberated across the two days was the schism between network and standalone sites. There's information on what a network is elsewhere on the site. Despite a number of talks around the merits of each model, the general consensus from both sides was that both models are worthwhile, depending on what your requirements are. It was interesting for me to pick up on a number of the arguments covered in the debate, as they highlighted a few issues I'd not really considered before now.

A number of pros and cons were discussed by Leigh Nissim of the St Minver network and Dylan Schlosberg of Herotech. Both were in agreement that at this moment in time and given the saturation of the market, any one deciding to go down the standalone route would need either a strong and already recognised brand or very deep pockets to succeed. Dylan agreed with a lot of what was said about the strong points of networking, adding that in many ways and for many people it was the right route, but for some it would not be and could prove problematic to their future growth.

For speed to market, ease of implementation, simplified running and the ability to be in a state of liquidity from the start, the network model was a clear winner. A standalone site would need to manage all the different aspects of their service - hosting, financial, admin, etc themselves, but under the network model, these were all taken care of.

One of the big concerns about the network model was what happens when you're networked brand grows to a level where it could succeed on its own. The move of Gala Bingo away from St Minver to standalone was highlighted as an example of the issues. For Gala the move was a positive one as the brand was strong enough to weather the transition. In some cases though, the loss of players and support could prove to be highly problematic. It was also noted that given the amount a networked site could spend marketing their site, essentially they would be building up a property for another owner, much like the blogger writing a blogspot or wordpress domain blog rather than on their own domain - in the end all the links and press is pushed to a site run and owned by a someone else.

It was also mentioned that if you tried to sell a networked site, in the future, it would be a lot more difficult as a networked site than it would as a standalone. The network option was also highlighted as the ideal means for new non-gaming brands to bring a Bingo site to the market. As an example, eBay were mentioned. If they wanted to add Bingo to their catalogue of services then the network approach would be the easiest way for them to do it. Given the increasing likelihood of this happening in the future, it looks like the networks are in for a good time.

Despite the difficulties for standalone sites, it's not all bad news. The success of The Sun's Bingo is a great example of how a standalone site can succeed in the market place. It was also mentioned that the space is changing and new services could start appearing that would make it a lot easier standalones to contract out sectors of their administration and running. Personally, I'd love to see more standalone operators in the market place. I don't really think there's much to be gained from launching more and more 'skins' via networks like Globalcom and St Minver. However, given the amount of new brands itching to become Bingo brands, it's somewhat inevitable that we'll be seeing a lot more skinned network sites in the near future.

All 2nd Online Bingo Summit Articles

Author: David Lloyd - October 2007

Related Links And Resources

Gambling Compliance
Online Bingo Networks Article
Scott Logan Interview

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