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Taxing times: Buffalo Partners discusses how tax hikes affect affiliates

Casino affiliate Buffalo Partners offers insight and advice on some of the industry’s biggest talking points. With Chancellor Philip Hammond including a Remote Gaming Duty hike in last month’s governmental budget, we ask Key Account Manager Andrew Stone what a tax rise means for affiliates.

AffiliateINSIDER: Chancellor Philip Hammond included a Remote Gaming Duty hike as part of last month’s government budget. How will this affect affiliates?

Andrew Stone: Ultimately any tax costs are passed on to affiliate, relative to their commission percentage or CPA amount, so it simply means a slight decrease in profit for both operators and affiliates.

AI: More specifically, how do such tax hikes affect Buffalo Partners as a company?

AS: It affects us in terms of the deals we are able to offer for traffic from the affected countries, and in more extreme cases whether or not it makes business sense at all to operate in a particular country.

Something to consider is that normally taxes on based on gross profit, which includes ‘false profit’ from bonuses given to players – this means that in those markets it affects the player experience as well as less bonuses can be given out.

AI: Some analysts are predicting a fresh wave of M&A triggered from the RGD hike. What does this mean for affiliates?

AS: I don’t think that there are any affiliates who enjoy mergers (I’m yet to meet one who does). Mergers can be very good and beneficial to affiliates for the long-term, but can be a bit of an admin headache upfront. Buffalo Partners has seen a number of mergers over the years, which have mostly been of great benefit to affiliates.

Apart from having Buffalo Partner’s strong account management ethic behind new brands that are merged in, the players now have the backing of one of the biggest and most experienced customer service and marketing teams in the industry, meaning longer player retention and therefore more profit for affiliates.

AI: Do you agree with the notion that an affiliate compliance focus is long overdue?

AS: The global market has been maturing rapidly in the past few years, and compliance was always around the corner. It will affect more and more countries in the next couple of years to come.

Affiliates really have no choice now but to be compliant – affiliate programs will have this as a stipulation that affiliates are compliant in order to work with their brands, and  affiliates will also stand to be penalised should their advertising not conform to requirements.

AI: What does a compliant affiliate program look like?

AS: A compliant program operates in countries that it is legally allowed to operate in, has a compliance team who puts in place the necessary policies and procedures, and who ensures that their affiliates are compliant.

AI: As we near the end of what has been a turbulent year for affiliates, what are your predictions for the sector looking ahead to 2019?

AS: We will see more and more countries regulating. This is not a negative thing, as there has for many years been an air of uncertainty with many countries – once they are regulated we all know where we stand. Buffalo Partners will be moving into more regulated markets in 2019, starting off with the UK and Sweden. We are excited at the new possibilities that will exist in these markets.

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