Affiliates Take Minor Risk

Published October 10, 2006 by OCR Editor

Affiliates Take Minor Risk

Although there is a certain risk when operating an affiliate program, it is important to keep in mind that often operators of such programs find themselves in a win-win situation.

The affiliates earn their revenue by applying different methods, but what they all have is a similar outcome, the commission of course. No matter what method is applied, they all rely on players losing more than they win.

The programs usually operate on a revenue share basis or a Cost per Acquisition where affiliates earn either a percentage of their referred players' losses, or a one-time CPA commission. Some programs also offer their affiliates a mixed commission, a blend of both revenue share and CPA. On average, you can earn anywhere from 25% to 50% on the net gaming generated from your referred players to the different online casinos or about $150 CPA for targeted traffic.

It sounds as if each player can produce golden eggs, and adding that to the fact that the house usually has the edge in the long run, you ask yourself- what is the risk? Obviously affiliates are attracted into the business because of the high earning potential of promoting the sites. However, the risk surfaces when a player wins substantial money, which generates negative revenue, which translates into, negative commissions for the affiliates. Such an occurrence is absolutely possible and it is a risk which is taken into consideration. Most affiliates apply the 'Negative Rollover', where they take the negative balance and carry it over to the next month. On the other hand, many affiliates reset their commission balance to zero at the beginning of the next month so that the account will start fresh and affiliates can profit from their promotional efforts.

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