Mike Murphy: Overcoming the hurdles faced by horse racing affiliates

The climate for horse racing affiliates presents various challenges, whether it’s ensuring that regulatory guidelines are kept, or engaging a fresh audience to the sport of racing.

AI spoke to Mike Murphy, founder of OnlineBettingSites.com, about the challenges faced by horse racing affiliates and how these hurdles can be cleared.

Affiverse: Can you map out the regulatory challenges for Horse Racing affiliates?

Affiliates have mostly experienced smooth sailing over the years when it comes to regulatory compliance and horse racing betting, depending on which markets are being targeted.

The US and UK have been relatively straightforward for the last decade, but the regulatory environment has become tighter in the UK, where regulators have been tightening the screws on how operators may advertise their services.

Most notably, the UK Gambling Commission (UKGC) and Advertising Standards Authority (ASA) have at times held operators responsible for ads run by affiliates. This in turn has impacted betting affiliates, as operators are now much more cautious when it comes to how affiliates may promote licensed betting sites.

Affiliates who promote to the UK now operate under a stricter environment regarding how bonuses may be promoted, how betting site reviews are written, the wording used in advertisements, and even in how responsible gambling messages must be displayed.

Interestingly, the US market for horse racing betting hasn’t seen any major regulatory changes over the past few years. Online horse racing betting has been legal in most US states for years now, with publicly-traded companies such as Churchill Downs licensed to provide online horse racing betting in the US.

Even so, offshore betting sites still target the US racing betting market to this day despite there being legal options at home on US soil. Affiliates who insist on promoting unlicensed offshore betting sites should consider switching to legal alternatives as the US expands its online gaming laws. Locally-licensed operators will likely demand more definitive action be taken against offshore betting sites. 

Changes in tax code are a potential challenge for affiliates the world over. Whether we’re talking about North America, Europe, Asia or anywhere else, taxes always have the potential to impact affiliates. This is of particular concern for horse racing, which is a declining sport in some parts of the world.

In some cases, governments are willing to change taxes so they can allocate more money to the sport. For example, the UK changed the horse racing levy last year so that all horse racing betting firms, including online betting sites located offshore, must pay a 10% levy on all profits above £500,000 to support the horse racing industry.

Any change in taxation is certain to impact affiliates. When taxes go up, racing bookmakers’ net profits go down, and affiliates feel the pinch as well. Affiliate programs usually calculate revenue share based on net profit calculations which take taxes into consideration.

What’s more, sweeping regulatory changes such as the EU General Data Protection Regulation (GDPR) have the potential to completely eliminate large numbers of affiliates. Under GDPR rules, operators and affiliates can be not only sanctioned, but also held financially liable for data breaches.

AI: Which platforms are the most prosperous when it comes to driving traffic for horse racing affiliates?

A mobile first approach to driving traffic to racebooks is essential. Search engines such as Google generate more actionable traffic, but social has its place and is especially useful for spreading relevant viral topics, breaking industry news, and promoting live events and promotions to new customers.

When it comes to pure revenue, traffic from search is still king. Social media is great for general promotion and interacting with customers, but search engines send qualified customers who have already expressed an interest specifically in racing betting. That type of traffic converts at a higher rate than standard advertisements placed in front of people who may or may not be interested in racing betting.

The old-fashioned e-mail newsletter is still a powerful tool for generating valuable traffic. Customers who have chosen to opt-in to a newsletter have shown they’re interested in what an affiliate or operator has to say. Affiliates and operators who respect their customers by sharing useful, interesting content via a newsletter will be rewarded over the long term for those efforts.

AI: How big a role can affiliates play in bringing in a younger audience to the sport of horse racing?

Affiliates play a critical role in attracting a younger horse racing demographic, especially when it comes to online advertising. The crowdsourcing effect of having thousands of affiliates running their own advertising campaigns, managing countless websites and being active on social media is something that cannot be done by operators alone.

That being said, operators also play a key role in attracting a younger audience. One of the challenges in attracting a younger audience is the relative lack of innovation in online horse racing betting compared to sports betting and casino gambling.

If operators take the lead in running longer-term advertising campaigns to fight the perception that horse racing is an old man’s pastime, affiliates will quickly follow suit to help spread that message.

The same would also apply if operators were to come up with innovative new types of bets, tournaments and formats as well as ensuring their mobile betting platforms are up to par. Not only do such changes invigorate existing customers, but they give affiliates new topics for content.

Affiliates can also play a role in attracting a younger audience by cross-promoting horse racing betting alongside sports betting and other forms of gambling. The tote nature of horse racing (betting against other people rather than against the house) is a great selling point regardless of age, and even for people who may not have necessarily landed on an affiliate site searching specifically for horse racing information.

AI: Could you tell us which platforms are most engaging to horse racing punters, when it comes to driving affiliate traffic?

This was mostly answered in an earlier question, but I’d reiterate that the mobile experience and features like live streaming races are going to be most engaging to horse racing fans, regardless of market.  

AI: How do you anticipate the landscape for horse racing affiliates will evolve in the coming year?

We expect to see regulated markets such as the UK and Australia to become even more tightly controlled, and unregulated markets to become regulated. This applies to horse racing betting and all other forms of online gambling.

The legalisation of sports betting in the United States will also impact the horse racing market in the US. Online horse racing betting was legal before the 2018 Supreme Court case that ended the federal sports betting prohibition, so now established horse racing sites will face increased competition from online sports betting.

Affiliates will do well to stay on top of regulatory developments around the world and understand how that impacts marketing. Even things as simple as knowing which horse racing sites accept customers from which states or countries can have a significant impact on affiliates’ effectiveness.

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