Pricing casino websites vs standard affiliate websites

[Zalagania]

Hi,

I recently put my site up for sale and have been wondering a lot on how to price the website + accounts, differently from an Amazon associates website, for example.

Generally, affiliate websites earning one time commissions are priced in the 30-40 multiple range, multiplying the average monthly income of the preceding 6-12 months. Site makes $1k/mo, price is likely going to be $30-40k.

With gambling affiliate sites & accounts, things are obviously different, if rev sharing is the primary monetization (over CPA).

I was wondering what you guys would think would be an fair multiple to use for rev share gambling affiliate websites, that may very well continue earning for many many years to come.

Curious to hear your thoughts : )

[24KCasino]

3 years seems to be typical, though this is a old calculation used way before google unleashed multiple killer updates on a regular basis. you should now really look at the quality of the site over the money it's currently making and figure out of it will still be kicking in 3 years time?

[casinobonusguy]

on two occasions I seriously considered selling everything ,the best offer I received was 14 months income and that was a network earning 7 figures a year and aged accounts with some active players going back to 2007.

[Zalagania]

on two occasions I seriously considered selling everything ,the best offer I received was 14 months income and that was a network earning 7 figures a year and aged accounts with some active players going back to 2007.

Damn, that makes 0 sense to me. I'd expect accounts to be worth more than affiliate sites. Given a sizeable amount of referred players, I feel like an accounts + site package is worth more.

Maybe people perceive gambling as too volatile a niche?

[casinobonusguy]

It is volatile and over 15 years we see complete shut downs and theft of all our players (Grand Prive anyone) to merging and sudden drop of revenue and players disappearing like the Buffalo/Fortune merge to downright complete shut downs like many Rival white label or the Revenue Jet/Affactive situation in 2015.I rather ride it out than take less than 2 year revenue.

[nwalker]

I was involved in a sale and it got 5x yearly earnings. It was a sellers market then,now it's moved towards a buyers market so the X is less, but good sites can still command a decent price.

It helps to use a specialist to help sell your site if its making 7 figures a year. They can help increase the X.

Variables that can impact value is the markets and niche the site covers, the keywords ranked for etc.

[Former Member 14]

Site makes $1k/mo, price is likely going to be $30-40k.

All the best with that price range, but I think your dreaming.

[Zalagania]

All the best with that price range, but I think your dreaming.

Maybe you misunderstood, this was specifically an example of the multiple for non-gambling affiliate sites

[Perffy]

Recently I have sold an affiliate website and the price was around 1.5x the yearly income. Have you found already a buyer ?

[casinobonusguy]

All the best with that price range, but I think your dreaming.

Yes if I got that offer I would sell in a day lol Years ago they went in that range not so much these days.

[MJM]

Here is my take on the subject, there is no answer to this question. Business valuations are worth what a buyer will pay for them. Lots of factors go into what determines that valuation.

Revenue valuations are not just a fixed monthly/annual number either. Where your revenue comes from matters a lot! Where your players come from, how regularly you add new players to replace lost old ones, what brands you work with, the markets you promote to, etc. Revenue in some niches are worth more or less than others. Revenue in some geo's are worth more or less than others. Which brands your revenue comes from also matters, as does how long it's been coming in.

Traffic, domain value, content value, expenses and liability, all matter as well. Along with numerous things I'm certainly forgetting to write here.

Some sites sell for 6-12 months - I'd say most often these are very risky sites. A bonus code site fixed on a small/new brand for example.

More common for small affiliate sites is the 12-24 month multiple which you'll see pretty often on this forum, semi-established sites with a reliable source of revenue but maybe small or not market leading sites. Potentially only earning for a year or two which also drives the lower side of the multiple, but most frequently closer to the 24 month mark for a decent producing site listed for sale.

24+ happens very often for strong sites that have built a brand, earn in many markets with many brands, and are big enough to absorb hits of losing a geo, or a brand, without much issue because revenue comes in from multiple markets, geo's, and brands - and likely includes a sale of a network of sites or a well recognized site that most people are aware of.

Most people with the types of networks I mention above aren't willing to sell for 24 months or anywhere near it which is why we see a lot of the bigger acquisitions in the 4-10 year multiple. 10 seems (and to me is) crazy as a multiple but it has happened. I see 4-7 year multiples on 7 and 8 figure acquisitions on a regular basis - typically happening in regulated markets by large companies buying out large affiliates. Sometimes these affiliates even become a part of the company - which is how those large multiples happen, typically spread out over a couple years. These deals involve up front money, and/or payment of shares, and multi-step payouts based on earn outs and projections/targets being hit.

This discussion could go on forever, because the variables are so different in every potential situation.

[mediamanoz]

All very interesting (to read about). I'm not in the market right now, but others may be. It's a turbulent time in a volatile market at the best of times. With the affiliate deals terms and conditions can almost change overnight, with or without what have become known as predatory terms. Hopefully the industry has cleaned itself up a fair bit. These days I work on flat term deals in the gaming sector, but much of our coverage is on pop culture, sports and other. Flat fees are easier to manage and attract quality I have found. Having said that, in my best month years ago when I focused on gaming much more I was able to crack 10k for a few months, across only 3 different brands, out of a mix of about 50 at the time. It's a hit and miss business, but you have to be in it to win it. I think serious potential buyers may like to see the real books if available. You have to create as much value as possible to get your ideal price. Organic search results count for something also, as do listings on the likes of Wikipedia and other destination websites, which I have achieved over the years. We are still in business after two decades, and am taking on selected deals and advertisers and sponsors, but are certainly not buying any sites at present. I found the topic interesting, hence my writings. Cheers. Greg

[Sherlock]

We are in the business, but how many accounts are the original ones. How many original approaches to gain and convert traffic work now. Maybe just the domain remains as a shell, but that is it. In between a lot of work.

It is impossible to say what is reasonable price. Most likely it is zero, because seller has an advantage of asymmetric information.

Without knowing which market is targetted and how the buyer owns the market, the average value makes no sense. For example value of Uk market for me is nearly zero. Maybe someone can still make reasonable money there, but not me. But I can work with US, where many people make zero, because they had to take down ads.

Estimating anything here is like playing with shitcoins if not worse

[golfbettingsystem]

Interesting subject. I've always had in my mind an end game (well dream maybe) whereby I sell up when I can't be bothered any more, however the multiples bandied around on here always seem far too low.

Great post from MJM puts it into a bit more context, when looking at the earning potential of the established player base I guess there's also got to be a strong consideration between the product that players have registered to - i.e. sports vs casino - as sportsbook players recruited to good, established bookmakers should have a better lifetime value for a prospective buyer than say casino players recruited to smaller outfits.

[Jokerman99]

Catena's aggressive expansion changed the market. Before they started pumping their share price via mindless m&a, the ranges were always 6-24 months. A previous superaffiliate who was the industry go to guy for selling sites used to buy @ 18 months. Since Catena's share price has tanked and their m&a strategy has been widely recognised as being foolishly reckless (more cynical people could see it as an Optimiser Invest led pump and dump), the multiples on offer have cooled significantly. When was the last time you saw Catena announce a 4-5 year acquisition?

Those types of multiples are terrible value for buyers and earning an ROI is going to mean taking on a huge risk burden. Most affiliates deals are similar, so there's no obvious way in which one can accelerate the ROI. If you look at any gaming company's quarterly reports, you'll see that organic growth is tough. Try doing that when you lose the MVPs of the acquired sites - ie the previous owners. Makes achieving an ROI even harder.

There's a reason the market has cooled and it's simply that acquisitions have to be sustainable and provide long term returns. Buying at 4+ years is very difficult to do that. There are exceptions when it comes to buying large established brands/products or when a business wants to buy itself into a niche or market.

ATM, I think the market is probably around even for buyers and sellers, but I expect things to move more towards the buyers side in 2020, as the qualified buyers for large purchases have all become a lot more wary of what they spend their money on and how much it costs.

[MJM]

It isn’t just Catena - Better Collective, Raketech, XL media And a couple other companies have all made purchases in the higher multiples and several have happened in the last year or two, and soon you will hear about even more of those deals. The key point though is these types of deals are indeed well established businesses driving large amounts of revenue and have made significant investments that wouldn’t dream of selling for an 18 month multiple. It’s also true that most independent/small affiliates won’t get the higher multiples and should expect a more reasonable multiple like you mentioned.

End of the day it is still what a buyer will pay vs what a seller will accept. As mentioned, it has to be a sustainable and profitable deal for both parties.

I’d venture there are a lot more buyers than sellers out there generating decent revenue at the lower multiples. This topic could be argued endlessly because the scope and size of assets being purchased are unique situation to situation.

[mediamanoz]

Yes. Win - Win - Win (Buyer - Sell - Client / s) wins are required for a good square deal that should sustain. Of course market forces, politics, changes in the internet and business landscape can and will occur, but all parties need to feel its a good deal in the first place to happen. Then time will tell, as it always does.

[mediamanoz]

Thanks. The European market remains solid to strong, in my experience. Brands will almost be always looking for additional quality places to advertise, promote and get balanced news, to help reach their intended audience. I'm the founder and director of Media Man. We cover pop culture, sports, technology, creative and more. From time to time we also cover the gaming and casino sector. This formula has worked for us since 2001. We are still taking on campaigns, ranging from text link only, to press releases, articles, to multi-platform projects. Yes, the market always does decide the right price. It's an interesting situation with the market being pretty volatile, mind you, many business sectors are at present. Thanks for your time. Best Regards, Greg

[Azureus]

It isn’t just Catena - Better Collective, Raketech, XL media And a couple other companies have all made purchases in the higher multiples and several have happened in the last year or two, and soon you will hear about even more of those deals. The key point though is these types of deals are indeed well established businesses driving large amounts of revenue and have made significant investments that wouldn’t dream of selling for an 18 month multiple. It’s also true that most independent/small affiliates won’t get the higher multiples and should expect a more reasonable multiple like you mentioned.

End of the day it is still what a buyer will pay vs what a seller will accept. As mentioned, it has to be a sustainable and profitable deal for both parties.

I’d venture there are a lot more buyers than sellers out there generating decent revenue at the lower multiples. This topic could be argued endlessly because the scope and size of assets being purchased are unique situation to situation.

Catena already stopped making huge acquisitions, Raketech likewise.

The prices they paid (1-3 years ago) were pretty high and sometimes insane, now they kinda face the consequences, check their quarterly reports and they often have 20-30 % drop in NDAs in period of Q/Q or Y/Y.

To answer the question about "standard" websites, you can check:
https://empireflippers.com/marketplace/
https://dealflowbrokerage.com/buy/
https://latonas.com/
Or an aggregator: https://landista.com/for-sale/

Tick the affiliate category and see the prices, I'd probably never pay such high multiples, neither for standard nor for a gambling site.