Industry Reports

Canada Participates in International Online Gambling Affiliate Investigation

The online gaming industry is more popular than ever, generating billions of dollars worldwide each year. Even though there are several ways to promote an online casino, affiliate marketing plays a key role in the proliferation of the online gambling industry. Affiliate programs turned out to be the industry’s most powerful marketing tool, stimulating the market for a stable and healthier growth. Many operators have realized that the fastest way to reach a mass audience is to allow affiliates to promote brands on their sites.

Yesterday, the UK Information Commissioner’s Office (ICO) announced that an international investigation has found out affiliate failures in relation to the rules on privacy and unsolicited communications. Nine agencies from five different countries (including the Netherlands, the United States, Canada, the United Kingdom and Malta) joined powers to investigate 902 websites and examine 6,536 consumer complaints centered around the affiliate marketing.

The global intelligence-gathering operation was conducted by the Unsolicited Communications Enforcement Network (UCENet), a corporation that deals with spam-related problems on an international level. The UK’s Information Commissioner’s Office (ICO) and the Canadian Radio-Television and Telecommunications Commission (CRTC) were tasked with leading the UCENet Sweep 2017.

Navigating Through the Results of the Investigation

The investigation concluded that 221 websites should be subjected to further investigation. Among all other things, the investigators noticed several recurring problems, including lack of self-regulation, lack of consent and misleading advertising. In addition to that, the agencies found out that some new affiliate marketing platforms intentionally hide their physical location, obstructing regulators to take enforcement action against the erring websites. Such websites were blasted for failing to comply with the law. However, a number of websites were found to be in compliance with laws on unsolicited marketing.

The affiliate programs appeared on the radar screens of regulators due to the number of lapses found in such websites. Typically, the gambling operators and affiliate marketers each fail to take responsibility. In that sense, it is hard to detect the source of the problem, especially in cases of a customer complaint. Quite unsurprisingly, that “misunderstanding” between the partnering online casinos and affiliates allows them to shift the blame between each other.

It is interesting to note that earlier this month, a number of online casino operators decided to cut down their UK affiliate activity under increased regulatory oversight pressure. Online gambling operator 888 Holdings and its rival Paddy Power Betfair announced that the two companies are trying to cut ties with their UK-facing affiliate marketing programs.

Last year, the UK Gambling Commission (UKGC) slapped a record-high fine of £7.8 million (US$10 million) on 888 for failing to protect problem gamblers, who had chosen to self-exclude from the online gambling platform. This was a lesson for a number of online casino operators illegally targeting customers.