What You Can Expect from Revenue Share
On its face, the concept of revenue share is very simple. Affiliates send players to online casinos and sports books and collect a percentage of that player’s losses.
The problem for affiliates is that different sites use different standards and formulas for defining what exactly constitutes revenue. Two players losing the same amount at two different casinos with a 30% rev share deal could yield wildly different payouts.
To help affiliates better understand this confusing subject, here are a few things to consider when considering revenue share.
Read the Fine Print
For better or worse, everything you need to know about revenue share is buried deep within the terms and condition you’ll sign off on when you sign up with any new affiliate partner.
Reading through these dense legal documents is about as fun as your next root canal, but as important as brushing and flossing. Even the worst affiliate operators tend to put all the facts about how they calculate revenue in the T&C. (Of course you may need to read through them a few times to really understand what is going on.)
Having an idea of what’s really in the T&C can save you some major headaches when it’s time to get paid.
We also suggest that affiliate thoroughly research potential operating partners before ever sending them a player. Sites like AffiliateGuardDog.com are packed with up-to-the-minute warnings about predatory terms and conditions.
Even a cursory glance at any affiliate forum is often enough to tell you whether an operator is worth pursuing or not. Remember, complaints from partners who didn’t bother to read the T&C themselves is not necessarily a reason for nixing a partnership. What’s really important is understanding exactly what you’re getting into.
Gross vs. Net Revenue
Gross revenue is the amount of money a company makes before expenses, while net revenue is the amount that’s left over after expenses. Most affiliate partners pay out on net revenue, but there’s a catch. The amount of administrative fees charged by some casinos can cut the gross revenue by 25% or more. Some of the line items in those fees include:
- Negative carryovers
- Tournament fees
There’s nothing wrong with operators calculating net revenue any way they want, so long as they’re transparent. Some operators are decidedly more affiliate friendly than others and don’t charge for negative carryovers; or they ring fence their sites so that a few bad beats don’t undo years of work.
At the end of the day,affiliate partners have to decide for themselves whether or not they an operator’s gross/net revenue calculations are fair. If the operator offers up great marketing support; pays on time; and has affiliate managers who really care – that’s worth paying for.
On the other hand, a company that’s going to nickel-and-dime its partners on admin fees, just to avoid a proper payout, is definitely not worth your time.
Have you ever been in a situation where revenue share was misunderstood? If you have, we’d love to hear about it in the comments section below.
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