GPWA Times Magazine - Issue 33 - October 2015

bling industry continues to consolidate. Operators are always looking to cut costs, and affiliates are usually the first to land on the chopping block. “I don’t think there will be any long-term deals anymore,” Bartlett says. “I think everything will be reviewed, and I don’t think affiliates can expect to receive in- come for the lifetime value of the custom- er; that will be curtailed.” But the mergers don’t necessarily mean companies will slash their marketing bud- gets, even with affiliates. Consolidation means fewer operators in the market- place, but it also means there are more large firms – and the stakes are as high as ever. “I had expected that affiliate earnings would have been a lot lower than they are now, but they seem to have maintained their position in the marketplace,” Bartlett says. “And the reason for that is that the marketplace remains very competitive. The spend on marketing is as high, if not higher, that it has ever been, as everyone is jockeying for position.” PokerStars was able to deal a major blow to affiliates because it dominated the global online poker market. But that won’t necessarily be the case if and when 888 and bwin.party merge. And affiliates can be sure that any new company trying to gain share on PokerStars will use any means necessary to acquire customers. A number of factors will determine what affiliate deals will look like as the indus- try moves forward, and surely things like the POC Tax will not help. But ultimately, these companies are merging for a rea- son – they want to grow their share in the marketplace. “Operators are saying, ‘we can’t reduce marketing costs,’” says Bartlett. “There will always be a place for affiliates in this market.” Dan Podheiser is the editor of the GPWA Times Magazine . He has followed the online poker industry for more than a decade, played on U.S.-friendly sites prior to Black Friday and plans regular trips to visit his parents to play on regulated sites in New Jersey. Follow him on Twitter @danpodheiser. I don’t think there will be any long-term deals anymore. I think everything will be reviewed, and I don’t think affiliates can expect to receive income for the lifetime value of the customer; that will be curtailed.” – Warwick Bartlett­ 23 Mergers and acquisitions: How affiliates fit into the online gambling ‘new normal’