A Golden Opportunity 

Charles Gillespie, CEO of Group Plc, talks about changes in the affiliate space and how he has made his mark in the industry. Group Plc is one of Europe’s fastest-growing performance marketing companies. How did you get started in the affiliate marketing industry and why? 

I started in the industry while still at the University of North Carolina in 2003. I could see the online gaming industry was booming but didn’t have the money to start a fully licensed online gaming operation, so I took the low-cost path and became an affiliate. I taught myself how to program and personally built my first casino affiliate website. I formalised the business in late 2006 with an initial strategy focused on East Asia. We shifted focus to the regulated European markets in 2010. Then in April of 2011, we managed to secure the domain name and have grown the business steadily from there.

Have you achieved any milestones recently, and what are the main brands and markets that you are active in? Group Plc passed another milestone this year by winning EGR’s Affiliate of the Year award, which I think is very well deserved given how far we have come in the past two years. The Group currently operates around 40 websites, mostly in the UK with its second largest market in Sweden, closely followed by rapid expansion in the USA. Our premier brand is but we have other websites with top-tier branding such as, which will be relaunched shortly with a US first focus. We have a number of other premium domain names in the stable, many of which we acquired earlier this year. We will be putting them all to good use in time. The group is headquartered in Malta but most of its 100 employees are in Dublin. We also have an office in Tampa, Florida since 2011. 

Are there any trends or difficulties that are currently affecting the affiliate industry?

It is much harder to launch an affiliate business today than say 10 years ago. To get into the game, you now need a lot of resources to fund product, technology, media, and to hire skilled, well trained people. It takes a lot more resources than it used to in the early days of the industry when the affiliate product offerings and regulations weren’t as sophisticated as they are today. Just keeping up with compliance can be a full-time job for smaller affiliates.

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Regulators now hold operators responsible for the actions of their affiliates. How have you reacted to the changing regulations?

The changing regulations really affect two kinds of affiliates: the small ones and the dodgy ones. The large affiliates on the other hand, generally speaking, have grown to be large because they don’t do anything that would be perceived as a compliance risk. They also have the resources to continually update their websites and marketing campaigns as requests from their clients come in. It’s the small fly by night rogue affiliates that skirt regulations who expose the affiliate industry to negative publicity. 

How has the recent wave of mergers and acquisitions in the sector impacted the affiliate landscape and what role do you seek to play in this scenario?

We have seen a lot of consolidation of affiliates, and now there are four or five affiliate companies that control a meaningful portion of the regulated EU and US market. If you are one of the four or five companies, then this is not necessarily a bad thing, and you can participate in the consolidation. However, if you are a smaller affiliate, it is only going to become more and more difficult to compete with the big boys in terms of product, compliance management, HR and technology. Group Plc is constantly evaluating a regular stream of acquisitions. We have not been the most acquisitive of our peers, but we have done four deals since the start of 2017. It has been a positive experience for us and has enabled us to better leverage our core technology across more and more websites. For our more acquisitive peers, there are some open questions about how they will maintain the pace of acquisitions they have established over the past several years. They face new challenges in terms of financing and finding acquisitions that are large enough to actually move the needle in terms of their current scale. We are happy to have less pressure on ourselves to acquire, meaning we can be more discerning and tactical in our moves.

How do you see the affiliate revenue model evolving? 

To be fair, it doesn’t change regularly and has been more or less the same for 10-15 years, and I don’t expect to see any meaningful change moving forward, at least in terms of the European markets. The regulated US market is a brave new world, and affiliates applying for licenses is certainly a new evolution in the model.  

In terms of commercials, we see more and more operators and affiliates gravitating toward hybrid deals as it offers value for both parties. It gives the operators more levers to pull on to entice affiliates to promote their brands, and the affiliates I think increasingly appreciate the positive cash flow aspects of getting some guaranteed cash through the door per new depositing player (NDP).

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What will be the next big thing in affiliate marketing? 

In terms of the future, changes in the gaming industry in the US are the next big thing. On May 14, 2018, the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act (PASPA). Following the revocation of PASPA by the Supreme Court, there are no federal barriers to legal sports betting in the United States. Attention has now turned to the individual states as it is now their decision to regulate sports betting within their own states’ borders. New Jersey has a major headstart as they were the ones that brought the case to the Supreme Court in the first place. They immediately pressed forward with getting their local operators up and running with sports betting and are poised to overtake Nevada in terms of total sports betting in months, not years.  

The key difference about the US market is that affiliates require licences. Regulators are much tougher, and affiliates’ relationship with the operators are far more structured in the US than in Europe where you don’t need a licence to be an affiliate, except in places like Romania. It is our view that the repeal of PASPA is the greatest opportunity in the history of the regulated online gambling industry, emphasis on regulated. 

Do you plan to expand anywhere else in the world? 

For now we have no plans to invest anywhere other than the US and Europe, where we see more than enough opportunity for us. We have a fast-growing technology business in Europe that is growing organically by healthy double-digit figures, before we even think about the US. That said, the US situation has really captured our attention, and we expect to see the US business eventually overtake the European one.  

Charles Gillespie is the founder and CEO of Group Plc. He started outas a software engineer and developed the Group’s first websites himself. Charles graduated fromUniversity of North Carolina at Chapel Hill. He lives in Monaco since 2011. 

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