XLMedia Sells All North American Assets

[MJM]

This is crazy, the entire network is sold to SportRadar for less than some of the single properties were bought for.

https://x.com/charlesgillespi/status...696136051?s=46

[bpmee]

Thanks for this MJM. It seems the US sports betting market has some major flaws and problems to solve, many of which are beyond the control of affiliates.

Smaller affiliates need to cut themselves some slack. If the acquirer of SBD can't hack it, who can? And with providers exiting state markets in whole or part, how are affiliates supposed to survive long-term?

Seems to be a multi-pronged problem:

1) CA, TX, FL still out. TX could be likely in 1-2 years.

2) Providers unwilling to take a chance on smaller affiliates. They won't respond to new business emails, while offshores will take almost anyone.

3) Providers cutting losses and leaving the US market entirely or partially (BetWay, for example).

4) Consolidation around a couple large providers (DK, FD) and affiliates (GDC, Catena, etc).

5) Regulatory roadblocks and delays.

6) Immense startup costs for affiliates and providers.


Legal gambling is going the way of the US Financial sector: a few big names, many struggling to compete, and a couple advertisers that everyone wants to meet on the golf course for the next "big deal".

[MJM]

You've summed it up well, as a small affiliate I've experienced mountains of frustrations in the US market but seeing what appeared to be a market leader sink and dissolve is pretty eye opening.

[bpmee]

Yeah -- only unknown is whether or not XLM was leveraged/on borrowed money and simply couldn't hold on any longer.

The US Legal market has been a disappointment to date. It could get better if more states come online and more providers are willing to work with affiliates. Also, if affiliates actually get paid for what they deliver, versus the current regime of measly CPAs and RS deals loaded with fees and exclusions.

A couple years ago, one provider was proud to offer $50 for NY sports FTDs. Even with NY's high tax rate, that's a starvation wage. It's also insultingly low and shortsighted.

[Malikbhai]

I have never understood this debate for legal markets.

Affiliates aren't needed for them.

Americans know about FanDuel and DraftKings. How often does anyone go for reviews of Amazon before heading out there.

New brands can simply advertise on print and electronic media, or have direct deals with the news papers (like they do now anyways).

Gambling affiliate industry was built for illegal markets and its survival depends on it too.

The concept of affiliates for legal betting markets never made any sense.

[bpmee]

Disagree a bit, as I think it can work in the legal gambling industry quite well.

Yes, people already know about Amazon. But an affiliate advertising unique clothing combinations might convince someone to click an Amazon link to buy the clothes they just saw in the article.

Another example: everyone already knows about Bet365. But people still find it using 3rd party odds shopping sites, bonus comparisons, and the occasional review site. It's easier to click a link in front of you.

Perhaps I can explain how to bet on golf better than anyone else, and I've got a couple links to FD and DK for them to try their hand. Maybe I create a page for a particular player's Super Bowl props that's more accessible than BetMGM's UX, or identify a favorable DK line that's not obvious on the actual DK site.

The US legal market is a log jam with a few prominent brands, affiliates, and states calling shots to ostensibly serve their own short run agendas. I don't see it breaking too soon without larger states, more competition, and more open-mindedness from the regulators. Many lawmakers don't understand affiliate marketing in the first place.

[Karri]

Gambling affiliate industry was built for illegal markets and its survival depends on it too.

The concept of affiliates for legal betting markets never made any sense.

...apart from the whole EU market of course.

[iso2009]

...apart from the whole EU market of course.

Actually, this is false. State regulations have made the whole EU market a total mess and has also hit our income pretty hard in the last 8 years or so (since they started (ultra) regulating online gambling). So yes, offshore bookies are now the way to go for almost all EU.

[AffiliateFriend123]

@Malikbhai

This is the most accurate statement I read all day.
Regulated Operators do not need 100's or 1000's of affiliates.

They only require mainstream advertising avenues and a handful of super affiliates who can control the online localized search.
IMO - Catena has already run it's course with acquisition for online operators. Used to do 550K ftds per year globally.
Today they are doing 75% sweepsstakes and 25% global ftds.

They are cooked as well.
XLmedia, Catena, have already sold most of their expensive web assets.

Exit for liquidity is now a race.

This money may never re-enter the space.

For those who made it enjoy the Boatdrinks.

I have never understood this debate for legal markets.

Affiliates aren't needed for them.

Americans know about FanDuel and DraftKings. How often does anyone go for reviews of Amazon before heading out there.

New brands can simply advertise on print and electronic media, or have direct deals with the news papers (like they do now anyways).

Gambling affiliate industry was built for illegal markets and its survival depends on it too.

The concept of affiliates for legal betting markets never made any sense.

[Karri]

Actually, this is false. State regulations have made the whole EU market a total mess and has also hit our income pretty hard in the last 8 years or so (since they started (ultra) regulating online gambling). So yes, offshore bookies are now the way to go for almost all EU.

False for whom? There's no shortage of affiliates advertising MGA casinos.

To stay on topic, but to veer off a bit.

Is there anyone who has managed to do anything with US market? Just saw news on LinkedIn that Catena Media has let most(?) of their content team go. Their little venture on the US market must be the blunder of century in iGaming. Selling all their EU sites to fund it.

[bpmee]

Perhaps related, one major legal provider just announced $40 NY CPAs, after state regulators apparently gave up on revenue share.

Is there anyone who has managed to do anything with US market?

GDC, Bettor Collective in partnership with major media outlets have done OK, though the recent Google update targeting parasite SEO will undoubtedly keep them locked into losing contracts with newspapers that took a hit.

The legal US market briefly had promise but has really stalled. If a $40 CPA becomes the norm, I'll quit and start selling vacuum cleaners instead.

[TheGooner]

I have never understood this debate for legal markets.

The concept of affiliates for legal betting markets never made any sense.

I assume that this is a "shock jock" style of post - but just in case I'll explain the value of affiliate quickly.

Affiliates have no cost up front - and only get paid if they generate an income for your company.
They boost your online profile and work online which is were 90 to 95% of your customers are.

Advertising in print and on broadcast media is costly, increasingly ineffective with new generations.
And quite frankly that space is dying along with it's aging consumer demographic.

In summary :
Paying for real world advertising for online casinos ahead or instead of recruiting online affiliates is brain-dead.
Advertising runs cost with increasingly diminishing payback while affiliate recruitment creates a profit centre.

Mainstream advertising is done by aging executives using a 1980's play-book - or is a buy-me-quick ploy to raise profile for a quick sale.

[bpmee]

Yep, and for a while US legal providers had their names on busses, subway placards, taxis, and every print publication they could find. I surmise nobody saw these ads, as their eyes were glued to their phones .

[Sherlock]

Yeah -- only unknown is whether or not XLM was leveraged/on borrowed money and simply couldn't hold on any longer.

The US Legal market has been a disappointment to date. It could get better if more states come online and more providers are willing to work with affiliates. Also, if affiliates actually get paid for what they deliver, versus the current regime of measly CPAs and RS deals loaded with fees and exclusions.

A couple years ago, one provider was proud to offer $50 for NY sports FTDs. Even with NY's high tax rate, that's a starvation wage. It's also insultingly low and shortsighted.

The US legal market has NOT been disappointment to date. The US legal market is EXACTLY behaving as everyone with 2+ neurons and 1+ synapse knew it. Sorry for being mean and ugly. But this is like talking to my son (20 months or something like that) about not touching a hot stove. Next winter I will talk to him about licking the rail with ice. In 15 years I will talk to him about women. The outcome is known. Not that he will be burnt, frozen and heartbroken. But he will blame the world and I will be mean and ugly.

There is no other explanation for anyone promoting FD and DK deliberately than mental disease for doing so. They kicked me out many years ago, just for dropping numbers (which still were high enough for NOT dropping me, when they were still in growth acceleration).

I'll quit and start selling vacuum cleaners instead

The wisest thing you wrote in this thread. (Not meant as offense. While indeed this is offensive. I can not help myself.)

[TheGooner]

I surmise nobody saw these ads, as their eyes were glued to their phones .

Indeed. I took a quick trip last week and the airport waiting rooms were a real eye-opener for me.

Everyone between the ages of 15 and 35 years old spent 90% of their time playing / flicking / thumbing their phone.
IT IS THEIR WORLD during down time.

Me? I have a desktop, a laptop, a tablet, and a phone and I only use my phone for calls / texts.
While I work online and think that I am connected ... I am a relic too.

[bpmee]

No offense taken, I guess we saw the market differently. Any many saw it like I did, and some saw it like you did.

Realistically, it won't be long before the offshores start culling affiliates as they accept players from fewer and fewer states. This will definitely happen once California, Texas, and Florida are fully open to regulated online gambling. Recently, Massachusetts sent cease and desist letters to offshores requesting they no longer accept residents, and some of the offshores complied.

Big offshore affiliates will increasingly have to be weary of US law enforcement and legal notices as well. Whether that matters to someone based overseas is an open question. But certainly anyone based in the USA, Canada, or even continental Europe advertising US facing offshores will have to be very careful.

If the regulators get overzealous, perhaps the "real" customers will gravitate to crypto books. But if they're reasonable - as they are in some states - many customers will happily stay on the legal side of things, not taking unnecessary risks.

It seems the legal providers, whether intentionally or not, used multiple big affiliates as a means to jump start their businesses. And now they'll put on the squeeze like the offshores have done to many of us for 20 years.

Guess I should read up on the selling points of Hoover vs Eureka vacuums.