Assessing the madness in Massachusetts

The Massachusetts Gaming Commission left online sportsbook operators in a state of mild (read severe) panic over its decision to ban affiliates from the market. Under state online gambling law, operators were prohibited from entering CPA and revenue share agreements with customer acquisition partners.

This left many scratching their heads as to how they could actually work with affiliates to drive new customers to their brands via a commercial model that was a) compliant and that b) made sense for both parties. As the regulations were, it would have taken the “performance” element out of performance marketing.

Thankfully, the regulator is now looking to overturn this with an open meeting and vote set for 23 March. Should it go in favour of amending regulations to allow operators to work with affiliates, the collective sigh of relief will be heard from Massachusetts to Nevada.

But it should make the industry sit up and take note – now that it (almost) happened once, there is nothing to say other states won’t ban affiliates leaving operators in a spin once again.

Should this happen, new commercial models will need to be devised so that operators can work with affiliates and reward them fairly for the traffic they send to their brands. Of course, the definition of an affiliate is now being expanded and goes way beyond traditional sportsbook listings sites to include brand ambassadors and influencers.

In fact, it is through the use of influencers that operators might find the commercial model they are looking for in the event a ban on cost per acquisition and revenue share agreements finds its way into regulations in other states.

At SGG Media, we work with an ad spend model that sees the operator give us a dedicated budget to spend on the social media influencers within our network. This enables spend to be highly targeted on a state-by-state level, and with micro-influencers that have niche audiences (for specific sports, teams, and even players) that are primed and ready to convert.

Because the relationship between audience and influencer is authentic, brand engagement is incredibly high which in turn means operators can generate a strong ROI on their marketing spend. ?

While this model is unlikely to replace traditional CPA and revenue share agreements in the near-term, it certainly provides an alternative in the states where they are banned. Not only that, but the power of influencers is something that operators should look to leverage as part of their brand building activities in each of the states they target as ultimately the deliver the ROI they are seeking.