Sub-Affiliation: The next growth frontier for iGaming affiliates ?

Affiliates are increasingly seeking new avenues for growth. One strategy that has gained significant traction is sub-affiliation. Industry leaders such as Raketech, Acroud, GameLounge, and Catena Media (as highlighted in their Q4 2024 reports) are at the forefront of this trend, leveraging sub-affiliation to drive exponential growth and diversify their revenue streams.

1. Ease of Setup
   • Platform Development: Creating a sub-affiliation platform is relatively straightforward. Many affiliates opt to develop their own platforms, while others choose to purchase white-label solutions. Both approaches offer a quick and efficient way to enter the sub-affiliation market.
   • White-Label Opportunities: Buying a white-label platform allows affiliates to launch their sub-affiliation programs swiftly, leveraging pre-built technology and infrastructure.
2. Leveraging Existing Deals
   • Affiliates initiating sub-affiliation programs capitalize on their existing deals and affiliate accounts. This strategy enables them to scale their operations without starting from scratch, utilizing established relationships and agreements.
3. New Revenue Streams
   • Diverse Earning Models: Sub-affiliation opens up new revenue streams, including listing fees, monthly subscriptions, and passive income from sub-affiliate commissions. This diversification enhances financial stability and growth potential.
   • Scaling Deals with Operators: By scaling their deals with operators to include new affiliates, master affiliates can redistribute a percentage of the earnings to their sub-affiliates. This not only incentivizes sub-affiliates but also strengthens the overall network.
   • Negotiating Better Deals: With a larger pool of affiliates, master affiliates gain leverage to renegotiate better deals with operators. This can include more favorable terms, higher commissions, and even fixed fees, as operators may not fully understand the value of the increased traffic.

Key points of attention when launching a sub-affiliation program.

As lots of products, a sub-affiliate program requires a strong analysis to identify the opportunity for the master affiliate. It’s not only about having a new product line and revenue source. It’s about building a long terms product that will either fulfill smaller affiliates needs and operators ambitions.

1. Thinking product and User

Building a good sub-affiliate program involve having a great SaaS product, with the right features. This is where Lean Start-up methodologies can bring lots of value, in order to focus on building the right MVP, without over investing.

To lead the industry, project managers must ensure having identified:

• Sub-affiliate needs : what features are key, what revenue models, what tracking methods, what dashboards…
• Operators ambitions: Operators want players. Quality players, not bonuses abusers or the ones that are going to churn after a stake. If affiliates responsibilities in the player quality have always been a topic of discussions, this is a key point of attention to reassure potential partners.

2. No need to reinvent the wheel.

Launching a sub-affiliate program doesn’t require your business to invest heavily on a tech stack. Even more at the launch. It’s probably better to run Make or Buy analysis in order to check what are the solutions available on the market and their costs. Spending time on building your own software won’t be always a great choice.

Building means :

• Investing in man/days for the delivery
• Investing in man/days for the maintenance
• Investing in the hosting and the optimizations tools (such as Cloudflare, AWS…)

While buying a whitelabel solutions, will provide key features, support, maintenance and evolution in no time.

Challenges and considerations

1. Compliance Management
   • Responsibility and Oversight: While master affiliates must adhere to operator compliance requirements, the responsibility for sub-affiliate compliance is less clear. Master affiliates must determine their role in ensuring that sub-affiliates also comply with regulatory standards. Failure to do so could lead to legal and reputational risks… but more important : affiliate account closure.
2. Selecting the Right Sub-Affiliates
   • Mass Onboarding vs. Elitism: Affiliates must decide whether to adopt a mass onboarding strategy or to be more selective. Mass onboarding can quickly build a large network but may dilute quality. An elitist approach ensures higher quality but may limit growth potential.
3. Achieving Critical Mass
   • Marketing and Outreach: To attract a critical mass of sub-affiliates, master affiliates need to employ various strategies:
     • Advertising: Targeted ads can effectively reach potential sub-affiliates.
     • Industry Events: Attending events like IGBA and Affiliate World can provide valuable networking opportunities.
     • Press Relations: Leveraging media outlets to promote the sub-affiliation program can enhance visibility and credibility.
     • Referral Programs: Allowing sub-affiliates to refer others can accelerate growth. Incentives such as discounts on subscriptions or increased commissions can motivate existing sub-affiliates to refer new members.

Is it working ?

Most of affiliates that launched their own master-affiliate program are still facing challenges. Raketech for example, saw its sub-affiliation revenues decline in half in Q4 2024 compared to Q4 2023. Still, that represent an important part of their revenues, showing how critical it was for the business to launch its program.

At The Gambling Cockpit, we don’t think there is a magic recipe for success in iGaming affiliation, nevertheless diversifying revenue sources is key to maintain a sustainable business. This is when stepping up from « being an affiliate » to « becoming a company » is mandatory.

Conclusion

Sub-affiliation represents a strategic growth opportunity for iGaming affiliates. By leveraging existing deals, diversifying revenue streams, and scaling operations, affiliates can achieve significant growth and market dominance. However, success in sub-affiliation requires careful management of compliance, strategic selection of sub-affiliates, and effective marketing to reach a critical mass. As the industry continues to evolve, those who embrace sub-affiliation stand to reap substantial rewards.

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