Author: Prof. Dr. Andreas Ditsche
Dr. Andreas Ditsche serves as the CEO of iGaming.com. At the same time, he is a professor of management and entrepreneurship.
The Affiliate Perspective
Affiliate marketers in the online gambling industry are like bird catchers. Their birds are potential players, flying freely in the borderless sky of the internet. Affiliates attract them and make them land in their birdcages. They want them on their landing pages.
How does that work? First, the birds must find them. Affiliates know very well what they are looking for. They use keywords to attract the right birds and employ search engine optimisation (SEO) to convince Google to rank their pages highly. If the affiliate pages are not shown on the first page of Google search results, there is hardly any chance to convert.
Potential players will find information and advice on the affiliate domains, and a list of recommended game providers. If someone then decides to select a game provider from a list, clicks on the link, registers with the game provider, and makes a deposit, then the affiliate gets paid.
The advantage for the game provider is that a commission is only due when revenues occur. There is no waste of advertising money.
The profit of the affiliate depends on two conversions. First, the player must convert from the affiliate page to the operator page. Second, the player must convert there again, make a deposit, and play. Therefore, understanding search patterns and player behaviour is a key success factor for any affiliate.
Keyword Search Patterns
To understand the importance of keywords, the following question is important: Imagine you want to play a slots game online. What would you enter into your Google search?
The search happens in German, therefore this article, written in English with translations of German keywords, might include minor inconsistencies, without affecting the conclusions. All data for this article has been gathered by the team of the iGaming.com Group and represents the status as of October 2024.
Approximately 250,000 searches per month refer to online gambling in the German market.
With 110,000 searches, “Online Casinos” is by far the most searched keyword, followed by “Online Casino Germany” and “Play Lotto Online”, each with 18,000 searches. These three keywords account for half of all searches among the 40 most searched keywords we reviewed.
The use of the word “Casino” is restricted by the “Glücksspielstaatsvertrag” (state treaty regulating online gambling in Germany) to avoid confusion. It must not be used in advertising except for table games like roulette. At the time of the study, apart from the early phase of a state-run online casino in Bavaria, there were no legal online table game casinos or roulette available yet in Germany.
Interestingly, among the top 40 search terms, we find the word “Casino” 19 times. The term “Slots” appears two times. “Slot Casino” appears once. “Virtuelle Automatenspiele” (virtual automatic games) does not appear at all. The latter is the official term used in the “Glücksspielstaatsvertrag”.
Out of the top 40 search terms, 12 are clearly targeting illegal products, such as “online poker”, “blackjack online”, and “play online roulette”, etc. They account for 17% of the search volume. At first sight, this is a seemingly small percentage. But when we add the search traffic that includes the word “Casino”, we already have 85% of the search volume for products that should not be offered in the regulated market.
For affiliates in the regulated online gambling market, conversions for slots are the strongest revenue driver. However, they represent only 3% of the search volume for “slots”. Since “Casino” searches also convert for slot games, we must assume that players do not make a real distinction between the terms. Whether restricting the word “Casino” is a smart idea for player protection is another question.
Now that we know what people are searching for, let us look at their search results on Google.
Google Search Results
The search results for general casino topics related to non-regulated products showcase a mix of affiliate pages. Some of these pages offer purely legal, German-regulated casinos, while others promote foreign-regulated casinos, which are illegal in Germany.
Players looking for illegal products cannot convert on an affiliate page that offers legal products because they do not find what they were looking for.
However, we do find affiliate pages that try to capitalise on this bycatch. They display non-German-regulated operators (gaming providers), but when the potential player clicks on them, a message pops up that says something like:
“We noticed that your IP address is from Germany. We are not allowed to advertise for casinos without a license. Whether you are allowed to play depends on your geographic location.” This means: “If you use a VPN to connect from another country, you will have access to all casinos.” This bypasses regulation, and makes illegal offers accessible.
The most commonly used search topics to explicitly avoid Germany’s regulation are: “With EU license, without deposit limit, without taxes, without German license, without 5 seconds pause, high-stakes slots, without limitations, quick spin slots, autoplay slots, high-roller and without schufa” (German credit rating agency, used for player registration). This wish list of forbidden fruits has an aggregated volume of 18,000 searches per month, which is substantial.
Sixty percent of these terms show a decreasing trend, meaning fewer people are searching for them, while 36 % remain stable.
The competitive landscape shows that affiliate pages still promoting these “avoid regulation” topics for operators without a German license are capturing the most market share (with a share of voice around 15%). In contrast, domains offering legal information and licensed offerings are generally below 2%.
The most popular “avoid regulation” query is “online casinos without limit”. The search volume peaked between December 2021 and February 2022. Since then, the search volume has been shrinking and is stabilising at an average of 1,500 searches per month, which is still high compared to other queries.
With such numbers, operating in the regulated market turns into a moral dilemma. Revenues are being siphoned off by illegal actors, and players are migrating to the unregulated market, where they are no longer under the protective umbrella of the Glücksspielstaatsvertrag.
Legal Online Casino Topics
From a player protection perspective, there is also a bright side: some people are searching for legal products. However, the search volume remains small.
The most popular queries that specifically include “German legal terms” have an aggregated monthly search volume of only 4,000, less than 2% of the total search volume for online gambling.
This accounts for just one-fifth of the specific search volume for illegal offerings. Furthermore, interest is declining for 10 out of the 12 most popular keywords. While there was a spike in popularity in the first half of 2023, interest has since dropped so dramatically that we can conclude hardly anyone is specifically searching for legal products.
To Regulate Or Not To Regulate – Through the Eyes Of an Affiliate
Staying in the licensed market is a matter of ethics.
Regulation does have one positive effect. The once-shady perception of gambling is a bit brighter today. The attraction of talent is a bit easier.
When restricted to the licensed market, high-value players are out of reach for the affiliate. Staying in the regulated market means neglecting half of potential players and earning only half the commission per player.
If we believe in player protection, and that most actors in the regulated gambling industry have their moral compass aligned, we must assume that the industry generally supports responsible gambling and follows the rules. However, regulation only protects players when they choose to play within the regulated market. De facto, every player has the freedom to decide where to play. Even though gambling in the illegal market is a criminal offense for players, search patterns suggest that many still do.
Revenue-sharing commission models are not permitted, as lawmakers seek to prevent affiliates from profiting directly from player losses . As a result, the business becomes highly volatile, placing enormous pressure on affiliates to constantly acquire new players to remain sustainable.
Conclusions and Outlook
Search volume for illegal alternatives is significantly higher than for legal alternatives. Therefore, the “black market” has a vast target audience. Since the internet has no real boundaries, search patterns suggest that players who cannot find their preferred products with attractive conditions in the regulated market will turn to the unregulated, illegal market.
In conclusion, lawmakers and regulators must strike a balance between enforcement and allowing a legal market that is attractive enough to channel more players into a regulated environment where they are protected.
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