Sky Bet end affiliate programme as regulatory pressure mounts

The regulatory pressures bearing down on the gambling industry have led to major online player Sky Betting & Gaming making the shock decision to close down its affiliate programme.

Affiliates on social media and through websites have become an increasingly important way for operators to attract new customers, earning a commission for every customer they refer.

The sector became the subject of an investigation launched by the Information Commissioner's Office last November over large numbers of spam text messages associated with gambling.

Following that news, Gambling Commission chief executive Sarah Harrison warned gambling operators they were ultimately responsible if affiliates were found to have broken the rules.

Affiliates were also the subject of claims of dubious practice in the Guardian newspaper last week, although it is understood the review carried out by Sky Bet's parent company pre-dated that article.

A spokesperson for Sky Betting & Gaming said: "Following a comprehensive strategic review, Sky Betting & Gaming has decided to close its UK affiliate programme. This difficult decision has been taken to give us more control of our marketing outputs and standards to ensure we can continue to meet the changing regulatory requirements in our sector.

"We've notified all the companies that will be affected by this decision and would like to sincerely thank them for all their support and hard work in helping to grow and promote Sky Betting & Gaming’s brands since we launched in 2000.

"We'll continue to work with our affiliates for the next 30 days, and a dedicated team is in place to respond to all inquiries."

Odds comparison website Oddschecker, which is one of Sky Betting & Gaming's brands, is not affected by the decision.

Regulatory pressure is building on the gambling sector from a number of sources.

Last week online operator 888 received a record £7.8 million penalty from the Gambling Commission for social responsibility failings.

The online sector is also waiting to hear results of the Competition and Markets Authority's investigation into the fairness of its terms and conditions, with Ladbrokes and William Hill among five companies who are the subject of enforcement action.

In retail betting the sector is awaiting the results of the government's review of gaming machines and social responsibility measures, with pressure growing for a major cut in the maximum stake available from £100 to £2.

More news emerged of the review over the weekend when a report appeared to scotch a previous story that the Treasury had killed off the review due to fears of the effects on tax revenues.

The Observer newspaper quoted a letter from chancellor of the exchequer Philip Hammond to prominent gaming machine opponent the Bishop of St Albans which said suggestions of a rift within government over the review were "entirely without foundation".

Hammond added: "Both I and my department fully support DCMS’s [Department for Digital, Culture, Media and Sport] work to ensure the UK's gambling regime continues to balance the needs of vulnerable people, consumers who gamble responsibly, and those who work in this sector."

The results of the government's review are not expected to be published until next month at the earliest.

What are affiliates?

Affiliates are third-party firms who earn a commission from gambling operators for driving customers to their websites.

They have become an increasingly important method for online gambling companies to recruit players as conventional advertising has become more expensive.

Affiliates earn money either through a one-off payment for every new customer, a share of the revenue they produce, or a hybrid of the two.

They are far from a new phenomenon and one, bookmakers.co.uk, was among the first sponsors of the All-Weather Championships.

However, there has been an explosion of affiliate tipsters on social media in recent years, some with followers numbering more than 100,000.

They have also become the subject of increased media attention as part of the general scrutiny the sector is under, with some outlets claiming a section of affiliates have made false claims about their success in order to attract fresh blood.

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