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Affiliate Union

Posted by THEPOGG on Mar 06, 2018

Affiliate Unions are something that’s been spoken about endlessly over the last decade or so as it’s become clearer and clearer that under the contracts that gambling affiliate programs foist on affiliates, the affiliate has very little in the way of rights. Most programs carry some form of ‘we can change anything at any time and your only recourse is to terminate the contract if you don’t approve’ term. These terms apply strictures on the affiliate but ensures that the contract fails to offer the affiliate any rights as any rights the contract grants the affiliate can be stripped away at any time by the program.

While there are unquestionably programs out there that use these terms responsibly, enforcing them only where they have to make changes to remain legally compliant with their licenses, there are others that use these terms as an opportunity to renege on their agreements with affiliates, lining their own pockets as they do so.

Instances of programs adding in Negative Carry-Over, Minimum Activity Quotas, reducing their Revenue Ladders or adding other highly questionable and detrimental terms may not quite be ‘the norm’ but very few affiliates who have worked in this industry for any length of time will not have been impacted by this type of action at one point or another.

Programs get away with this by selectively targeting which affiliates to take such actions against. Large affiliates that can negotiate their own contracts, or who have pockets deep enough to challenge these types of changes via the court system, remain unaffected by these types of changes. Small and mid-sized affiliates who cannot afford to mount any sort of challenge on their own are ruthlessly exploited as the enforcing program pockets the revenue that they promised to the affiliate to lock the affiliate into funnelling traffic to them. In any consumer type arrangement – and affiliate contracts are written as if the affiliate is a consumer rather than a vendor – changing the deal after the fact would fall into the category of false advertisement. But because this is a B2B relationship the small and mid-sized affiliate is entirely exposed to this morally bankrupt business strategy.

There is only one solution to this and that is for small and mid-sized affiliates to work together and use strength of numbers to counter their smaller size. And that’s where an Affiliate Union would prove to be a huge benefit for the affiliate industry.

In my opinion Affiliate Unions have always failed for a very basic reason – they try to enforce rules about which programs an affiliate can work with. This does not work. Affiliates have vastly differing views of what makes for a good or a bad program. More than this however, if an affiliate’s business derives a significant portion of their income from a partner that the union disapproves of the affiliate is then caught between a rock and a hard place – they either have to give up a significant portion of their revenue or they have to walk away from the union. This has consistently prevented affiliates working together for the common good.

We have put together a framework for cooperation between small and mid-sized affiliates (though admittedly this is geared more heavily towards the mid-size affiliate) that we believe could address this issue and we would encourage any affiliate that has ever felt powerless to stop a program annexing the earnings to which they are entitled to read through the framework posted below:

Affiliate Union Framework

– Each member would be assigned one vote.

– At no point will the union dictate which programs any member can work with.

– Any member can approach the union to request a review of an issue. The union would then prepare an overview of the key facts of the case, including what the affiliate feels is the problem and in which jurisdictions legal action could potentially be pursued. The overview would be distributed to all members. There are then multiple options, but each would require a vote. Before action would be taken, a majority of 55% of the membership would have to be in favour of it.

Potential actions:

i) The most common action taken by the union would union would likely be publicly highlighting the actions of a program. The membership would have a vote on issuing a public statement/press release asserting the position of the membership with regard to the actions of the program.

Those who voted in favour of action (presuming a 55% majority agreed to action) would be asked to publish a statement on their respective sites.

Those who vote against this action (presumably due to a relationship with the operator that would detrimentally impact their business to terminate) could opt-out of publishing any statement.

If 50-100 affiliates all publicly condemned the actions of the program it would create a lot of negative press and pressure on the program. It would also ensure that reports highlighting the issues turn up prominently in the SERPs for relevant search terms. If managed correctly there is the potential to create a ‘link wheel’ like structure between the published articles to ensure that the articles rank well and even give some SEO benefits to the participating members.

If this type of action was pursued, pre-publication legal review of any statement would have to be engaged. Expectations of cost for this would not be likely to exceed £500 (far less based on our own prior experience).

ii) In more serious cases where a member has sustained significant financial loss due to the actions of a program the union membership would be asked to vote on whether to move forward with taking legal advice on any legal action that could potentially be taken.

If a majority of 55% of the membership are in favour of taking legal advice the union then looks to engage a legal firm in the relevant jurisdiction and undertake a review of the case. The cost for this would be split equally amongst all members. This means ALL members, not just those in favour. While it would be fine for an affiliate to decline to publish the press statement if it was critical of a program they worked closely with, funding any legal action has to be shared equally to avoid free rolling members who look to get the union membership to fund their actions, but opt-out any time another member would like the union to consider action.

To this end each affiliate who wanted to join the union would have to sign a legally binding contract on behalf of their business when they join agreeing to fund their part of any legal action the union’s membership decides to take.

If the vote is to take legal advice on a case, once legal advice has been taken, the advice would then distributed to all members who are then asked again to vote on whether or not to pursue further action. Again if the majority are in favour of taking further action the costs would be split equally amongst all members.

At each point where new information becomes available a new vote on any potential action has to be taken to ensure that the majority (55%) are still committed to moving forward.

– To ensure that votes are conducted in a fair and transparent manner all members would be issued with a four digit ‘membership number’ that would be confidential and only known to them and the vote coordinator. At the conclusion of any vote a spreadsheet of all membership numbers alongside the direction of their vote would be distributed to all members. In this manner each member can confirm that their vote was counted correctly while no member would be able to identify another member’s voting direction.

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The advantages of this system are clear – with 100 members the potential to deliver a widely distributed press release that would turn up regularly in the rankings highlighting the issues is a significant disincentive to any program considering making unfair changes in the first instance.

If a case was serious enough to warrant taking legal action, even if case cost an outrageous amount of £200k, every member would only be liable to pay £2k. The larger the number of participants the smaller the individual contributions would be.

Yes it is likely that we would all end up contributing to cases that don’t impact us from time to time, but this approach would make members of the union a far more dangerous target for programs to implement arbitrary contract change tactics against. Most cases aren’t going to come to anywhere near £100k.

There will unquestionably be affiliates who decide not to honour their commitment when a call is issued to contribute to legal fees. The union can take a separate vote on whether to pursue such breaches of contract via the court system or simply revoke the membership of said affiliates.

I’d also suggest that it might be worthwhile to have a small monthly membership fee (€5-10) that could be collected as a ‘war chest’ in case the union approves action on an issue. In this manner there would already be a bank to draw down on before anyone is asked for extra. It also means that all members have some degree of stake in the enterprise meaning active participation is more likely.

And this is the point where we’d throw the idea open for discussion – who can see problems? I would like to keep this positive so if you’re going to criticise we’d appreciate it if you could suggest potential solutions you see.

If you are interested in participating email us at webmaster@thepogg.com. If, by the end of March, we have 50+ affiliates all interested in participating then we’ll contact all interested parties about moving forward. If there are less than 50 I’d suggest we’re too small to be effective.

If you do like this idea, please spread the word to other affiliates. The more affiliates who read this the greater the chance of finding enough affiliates that think it’s a good idea.

There are already active ongoing conversations about this topic at the following site if you want to participate:

https://www.casinomeister.com/forums/threads/affiliate-union.83179/
https://www.affiliateguarddog.com/community/threads/affiliate-union.11459/

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