Affiliate question: how to better calculate affiliate earnings?

[SlotMonster]

Maybe I posted in the wrong section, but I thought it can be interested to all members, and I'm open for discussion.

The main question is: what's the best way to calculate aff. earnings?

Now we are dealing with several models (developing our aff. program) and I must admit it's pretty hard to choose the best one. So, I would like to invite affiliates and players to discuss it.

Conditions:

- 35%-45% rev share for life;
- no NCO;
- bonuses given to players are not deducted from affiliates' earnings;

To be honest - the last one is still under discussion, because it's pretty obvious that sometimes casino's earnings will be less than affiliate payments. For example, if player deposits $100, receives $200 bonus and then loses it all - affiliate payment (in case of 45%) will be equal to 300*0.45 = 135, which is more than casino actually earned (player deposited only $100).

We consider the following models:

1. Payments are calculated as [Deposits - Withdrawals] * [aff %] formula, which is calculated in the end of every month.

This one would be the best IMO, but there is always way for possible fraud. For example, player registers through aff. link, deposits $5000 and plays just a little. In the end of the month we will pay aff. earnings depends on player's deposit. In the next month the same player submits a w/d losing about $200 or so, and affiliate is just closing his account, leaving us with losses. He even may not to close it, since we will have No NCO, and just wait until negative balance is vanished.

2. Payments are calculated as [Bets(wagers) - Payouts] * [aff %] but it's pretty the same as #1


I would like to hear your opinions.
Thanks in advance!

[baldidiot]

I saw this on CM and was going to reply, but then got distracted by something (I forget what, possibly a nearby butterfly ).

What's wrong with the simple net losses x %'age? A few programs have tried to be different but they don't seem to be that popular (eg: the true wager share model from rewards).

The method #1 you mentioned above is just inviting ethically challenged affs to take advantage of you.

[SlotMonster]

I saw this on CM and was going to reply, but then got distracted by something (I forget what, possibly a nearby butterfly ).

What's wrong with the simple net losses x %'age? A few programs have tried to be different but they don't seem to be that popular (eg: the true wager share model from rewards).

The method #1 you mentioned above is just inviting ethically challenged affs to take advantage of you.

The main problem is how to better deduct bonuses from losses.
And what to do if player haven't wagered bonus till the end of the month?

As very simple example: take 100 deposit + 100 bonus ($200 in total), and aff. comm = 25%

If till the end of the first month player has lost $50, then how to better calculate aff. earnings? Should we deduct bonuses in the very beginning? Like

[(Bets - Payouts) - bonuses] * aff.comm

In our example for the 1st month that would be: [(50) - 100] * 0.25 = -12.5

And in the second month when player has lost remaining balance: [(150) - 0] * 0.25 = 37.5

[VIPCardClub]

Slotmonster - you are over-complicating this IMO and getting a couple of fundamental issues wrong.

Firstly, if the casino provides a bonus (whether free, earned or based on a deposit) then you don't add that to the amount you calculate the aff commisssion on. I don't think any affiliate would expect to earn a percentage of a bonus lost in the casino. So for example - using your 45% model. Player deposits $100, casino offers a $100 bonus, player loses the lot. You would simply pay out 45% of the $100 lost, ie. $45.00. What affiliates would not like to see in this case is a deduction from their commissions based on a bonus the casino supplied. Just take it out of the equation.

As baldidiot says, just pay an amount based on net losses. It's a simple calculation - how much of their own money has the player lost in any given month and pay the commission % based on that. If a player deposits $5,000 and only loses $200 by the end of the month then you simply pay the commission on that $200.00.

If you are saying that your software can't calculate net losses (??) then you simply pay on Deposits - (Withdrawals + Current Balance).

I really think you are seeing a problem that doesn't exist!

[SlotMonster]

Thank you for your reply, VIPCardClub.

Actually, I'm not trying to make it too complicated. I just want to figure out, how to better deduct bonuses, in case if player haven't lost deposit+bonus in the current month.

As from my example above: if player has deposited 100 and got 100 bonus, and then lost only 50 in the first month - how much $$$ should I pay to affiliate? Did player lose bonus money or real money? Or 50% of bonus money and 50% for real money? That's the problem!

[VIPCardClub]

Hi Slotmonster,

Sorry, I wasn't trying to be rude when I said you were making it too complicated - just a turn of phrase suggesting you were overthinking it a bit.

In my opinion, in the scenario the put forward in your last bonus, the affiliate is not entitled to anything - the casino has not (yet) made any income from the player. They player has deposited $100 and yet has a balance of $150 - so they are technically in profit. If the player then loses their $150 balance the following month, then the affiliate earns their commission based on the $100 of the players money lost.

Essentially, the affiliate should be paid based on a percentage of what the customer spends. If a player deposits $100, gets $100 bonus and loses exactly $100 (clearing wagering requirements along the way) and withdraws $100 they have spent NOTHING, so the affiliate gets NOTHING.

I hope that is clear, let me know if you need anything clarifying. This, of course, is all just my opinion.

[SlotMonster]

Hi Slotmonster,

Sorry, I wasn't trying to be rude when I said you were making it too complicated - just a turn of phrase suggesting you were overthinking it a bit.

In my opinion, in the scenario the put forward in your last bonus, the affiliate is not entitled to anything - the casino has not (yet) made any income from the player. They player has deposited $100 and yet has a balance of $150 - so they are technically in profit. If the player then loses their $150 balance the following month, then the affiliate earns their commission based on the $100 of the players money lost.

Essentially, the affiliate should be paid based on a percentage of what the customer spends. If a player deposits $100, gets $100 bonus and loses exactly $100 (clearing wagering requirements along the way) and withdraws $100 they have spent NOTHING, so the affiliate gets NOTHING.

I hope that is clear, let me know if you need anything clarifying. This, of course, is all just my opinion.

I didn’t mean you are rude. I just thought you missed the real problem.
I was also thinking about: [(Bets - Payouts) - Bonuses] * aff. Comm. = aff. Earnings

Based on given example above: 100 deposit + 100 bonus, aff. Comm. = 25%

1. Player has lost deposit + bonus: [(200) - 100] * 0.26 = 25 (aff got his 25%);

2. Player has cleared WR and withdrew 200: [ - {(200) - 100}] * 0.25 = -25 (aff. covered 25% of casino’s losses – bonus, and this amount to be deducted from total payment); “-” means that player withdrew money;

3. Player has cleared WR and withdrew 500: [ - {(500) - 100}] * 0.25 = -100 (aff. covered 25% of casino’s losses – bonus, and this amount to be deducted from total payment); “-” means that player withdrew money;

4. Player has lost 50 and current month has ended: [(50) - 100] * 0.25 = -12.5 (aff. covered 25% of casino’s losses – bonus, and this amount to be deducted from total payment);

Next month.
4a. Player has lost remaining 150: [(150) - 0] * 0.25 = 37.5; Taking into account that (12.5) were deducted in previous month, the total payment for 2 months will be 37.5 + (– 12.5) = 25;

-OR-

4b. Player has cleared WR and withdrew 150: [- {(150) - 0}] * 0.25 = -37.5 And THIS IS NOT RIGHT, because in this case we should also deduct bonus, and the final calculation should be as: [- {(150) - 100}] * 0.25 = -12.5. Taking into account that we deducted 12.5 in previous month, the total payment for 2 months will be (-12.5)+(-12.5) = -25.


If someone can check this for me - that will be highly appreciated.

I'm really trying to find the best way to pay affiliates as much money, as they REALLY earned, and hope they will help me with that.

Regards,
Viktar.

[VIPCardClub]

You are on the right track. Your biggest complication is what happens at the end of the month - you are trying to apply an absolute equation but it can't work out like that if the player has an uncleared bonus at the end of the month.

You need to do one of two things - a) have your software be able to calculate, taking into consideration uncleared bonuses, the NET LOSSES of the player before determining affiliate commissions or b) make manual adjustments to account for uncleared bonuses at the end of the month.

The ultimate result should simply be that an affiliate is paid out on based on whatever amount of their own money a player has lost at the tables.

My head is beginning to hurt now - perhaps another AM could step in here and explain how their calculations work. I don't think I can be of further use!

Good luck with working it out though.