While the impact on poker players and poker operators has been well documented not only in the poker community but also in the mainstream media, not a lot has been said about how affiliates were impacted.
Shortly after Full Tilt began issuing statements which implied that they might not be able to get players paid out as quickly as PokerStars had done, Tony G, the man behind one of the largest affiliates sites, PokerNews, indicated that he had been in discussions with people at Full Tilt about millions of dollars that were owed to him.
Nowhere in any of the reports about deals and possible deals to sell Full Tilt and pay back players has the discussion of paying back affiliates come up.
Most of the affiliates I’ve spoken with say they’re resigned to the fact that they won’t see a penny of the money that’s owed to them. Obviously they’re not happy about it but considering that nobody has even hinted that anybody other than players would be paid – and even that was a big “if” at times – most are ready to assume the worst.
Doing a little math mixed with some estimating, Full Tilt was doing roughly $1.5 – $2.0 million in revenue daily. For the sake of argument, let’s peg it at $2 million. That means that Full Tilt’s monthly gross revenue was in the neighborhood of $60 million.
Typically, a poker room ranges from 10% – 50% of daily signups via affiliates (newer rooms with smaller marketing budgets are closer to 50% while established like Stars would be closer to 10%). If I had to make a cold guess, I would peg Full Tilt’s affiliate cost to be about 15% – 20% of gross revenues. I’ve actually been told by someone who saw the numbers that I’m a tad on the low side but close enough for this example.
Twenty percent of $60 million puts Full Tilt’s outstanding affiliate liability at around $12 million.
That’s a pretty good chunk of change to remove from the affiliate chain. But for every action there is an equal reaction.
In speaking to many of the affiliates who had their world shaken up pretty dramatically by both Black Friday and Full Tilt’s eventual collapse, there seem to be a few major reactions.
Others have attempted to monetize their traffic through non-gaming related links. Some of the bigger sites have been able to get land-based casinos to advertise. Some promote cross-over products like fantasy sports leagues.
More than a few have taken a hybrid approach. They use the geographic location of the visitor to change the offers presented. For instance, someone visiting their site from the UK might see a real money gaming ad but someone visiting from the US might see an ad for Fantasy Football.
Some affiliates have given up on the US market entirely (for now). They’ve localized their content and SEO efforts for markets outside of the US.
Even the affiliates who have not given up on the US at least trying to get more non-US traffic. Everyone is thinking about diversifying these days.
One of the more interesting approaches involves a minor tweaking to the existing affiliate model. Going outside of the comfort zone into untapped markets is usually where you see innovation happen.
While many affiliates have shifted to established markets in Europe, the real risk takers are venturing into uncharted waters.
For instance, Poker Portal Asia appears to be aiming for the PokerNews sort of role in the Asian markets. They promote and report on all of the various poker tournaments happening across Asia and Australia.
Intense Gambling focuses more on informing people about which gambling websites accept players from specific Asian countries and what one’s options might be.
One of the reasons why I find this turn to Asia and other markets interesting is because Asia has been the territory that so many poker operators have tried to crack and most of them have ended up coming home defeated.
Perhaps if interest in poker comes from the grassroots level rather from a top-down push, it will gain more traction. Already, we’re seeing tours like the Asian Poker Tour slowly expand into new Asian countries as interest in poker slowly grows in the region.
Whereas just a few years ago the only poker action in Asia was in Macau and Manila, the market is expanding into Singapore, Cambodia, India, Korea, and Mauritius.
So, while the affiliate side of the online poker industry may be under reported in the media, they’re adapting to Black Friday just like everyone else. As affiliates get forced to take a more global approach to customers and diversifying their monetization of eyeballs, hopefully they’ll also be raising awareness and interest in the game of poker on a more worldwide level.
We probably will never see a full-blown boom like we did back in early the 2000’s. Back then there was a lot of pent-up demand for poker already and online was just waiting to take off. In these new markets, poker needs to be introduced, nurtured, and grown into the mainstream which is a very different challenge.