It's not uncommon for those in US sports to take a long-term view on strategy when it comes to building a championship-winning side. US paid media affiliate MediaTroopers holds a similar view, as CEO and co-founder Sam Segal tells iGBA editor Dan Kleiner.
A new market for affiliates presents fresh opportunities, but it also comes with risks. The US isn't without its struggles, but as MediaTroopers has found it pays to be consistent and willing to work with operators on terms they prefer.
For Shmulik (Sam) Segal, the affiliate's CEO, it was very much a waiting game for the US to become an opportunity worth exploring as he reminisces about coming to his first ICE London in 2005. With online poker booming and policymakers seemingly leaning towards igaming regulation rather than prohibition, operators viewed the US as being "completely open". This of course all changed overnight in 2006 with the passage of UIGEA.
Of the ensuing years, which saw him head up product for Playtech, PlaytAspire Global before leading performance marketing for PokerStars’ iBus Media, Segal says: “I remember coming to the shows and everyone would question when the US would open again, it was always there in the background”.
Next gold rush
Yet, it was in 2018 when Segal, noticed things were changing, especially with the Supreme Court's ruling that sports and casino igaming regulation sits with individual states. At this time, Benjamin Truman, MediaTroopers co-founder, had his own company, while Segal had a business that focused on UK sportsbooks. And it was Truman who came to Segal with a proposition.
“He came to me and said, ' Listen, New Jersey is open, Pennsylvania is opening up but it’s going to be challenging as an affiliate because you have to get a licence’, but we decided to build a company around a totally regulated market,” reveals the CEO. “We decided to be licensed everywhere that’s open which we knew would be a tedious process.”
The barrier for entry is higher in the US and we decided to use that opportunity and bet on the next gold rush in 2019
In the US, all the opening states require new licensing applications even from companies already approved to operate in other legal markets in the country. “Every new state we need to go and get our fingerprints and send it to the local police,” says Segal.
“But since it’s difficult, the barrier for entry is higher and we used that opportunity and decided to bet on the next gold rush in 2019.”
Having opened in 2013, the New Jersey market provided a fresh MediaTroopers its first licence before it set its sights on Pennsylvania, but another state managed to open up even faster.
“We had Pennsylvania as our big target, but it got to a place where Indiana was actually open and available for an affiliate licence faster,” says the MediaTroopers CEO. “From that point on things seemed to move as more and more states opened up for casino and sports, which allowed us to grab the first-movers position and made us probably the largest privately owned affiliate in the US market space.”
Leaning on expertise
MediaTroopers decided early on to focus on paid media as its model. “We’re not an SEO company,” Segal explains. “We are generating content but we have our own sites and we generate the players on there and utilise social channels like Google and Facebook to bring players to our sites.”
The reason why the company only does paid media? It’s simply what Segal and Truman know best. “Ben [Truman] and I come from the paid media world, neither of us acquired experience in SEO to go now and become an SEO affiliate.
“Paid media was our strength, so we took all our knowledge that we learnt in the UK in sporting events like Champions League nights, Cheltenham Festivals and boxing matches and translated them to US markets from one regulated market to another.”
In terms of its commission model in the US, MediaTroopers remains relaxed about things. The company started with CPA when very few operators in licensed states were offering rev share, but things are starting to change as time has gone on and operators are beginning to adapt to the affiliate market.
“We work in both models,” explains Segal. “Our preferred model is the one that works for the operators because we came to realise that the player value of the users we generate are very strong, so we’re flexible on the finance model side of things.”
Paid media was our strength, so we took all our knowledge that we learnt in the UK and translated this from one regulated US market to another
The company has learnt a lot of lessons since acquiring its first licence in New Jersey, but the CEO is adamant that the main one was understanding that the approach to new markets can't be a purely financial decision.
“We have decided that we are focusing on the US market,” he says. “We don’t look closely at the numbers and set hard ROI predictions when we come to a new state opening.
“It’s not as transactional as asking whether we are going to make money in a new market or not, we have to be in the US market.” He emphasises the need to be everywhere the US is open and regulated, which despite differences in the licence applications has formed a process in the company.
“When a new state is open we already know what we need to do. For example, when Illinois, Ohio and Michigan opened we already had everything we needed prepared before the process even opened to get the licence.
“We are pretty much aiming to be there on day one of any new state opening.”
Expansion
In its fifth year in the US market, MediaTroopers has grown in size since Segal and Truman got things started. The affiliate's CEO admits to having brought about several team changes.
“The number of advertisers available grew along with the audience and to be able to apply the same effort and requirement in the different states you need to have more people, bigger budgets and places to generate this activity.
When it comes to hiring, MediaTroopers looks within gaming for experience but outside the US due to the market’s infancy. “One thing that we’ve learnt is that there is no real talent in terms of experience yet due to the US being pretty much closed from 2006, so we mainly hire from the gaming pool.”
One thing that has helped the company in its recruitment drive is its relocation from Tel Aviv to open an office in Malta, where there are plenty of experienced gaming personnel about. “Even if
we hire people that are just starting their journey in gaming, they’re starting off in a place where there is a gaming atmosphere so it’s a great location for us.”
The off-season
Compared to European sporting leagues the US poses a problem for affiliates and operators in scheduling. Simply, the US sporting calendars are shorter, with the NFL for example starting in September and ending in January for those who don't make the playoffs. The NBA season runs from October to April with MLB following a similar schedule.
Segal highlights that the European market is much more well-rounded in the scheduling sense. “The Premier League runs from August to May and every two years there’s an international tournament in June and July, whereas in the US there are clearer off-seasons.”
Yet, for MediaTroopers the break provides fresh opportunity and research time. During this year's off-season, the company is planning to look at its casino activity, where it's available and what it could mean for the future.
“I think for us and likely our competitors this period is used for two things: to prepare for the next season and to look for activities in other markets.”
One market still in its slow grind towards casino regulation is New York and Segal is conservative regarding the possibility of significant developments from the state this year. But refuses to rule out a surprise announcement either.
I truly hope I’m wrong about New York, but I think it’ll be very challenging especially during an election year so I think they will wait
“While there is roughly a certain idea of when a state is going to open up, you can always have a wild card in the pack.
“We were at an industry event in New Jersey in the summer and believed that we would see no new state launches before the next NFL season starts, but everyone was buzzing about Kansas opening and within two months it did,” Segal adds.
“I truly hope I’m wrong about New York, but I think it’ll be very challenging especially during an election year so I think they will wait.”
The CEO also believes that New York could act as a domino for others in the casino space. “When a sports betting state opens up for casino regulation it will hopefully show a revenue jump for the state, which will build a very strong case for other states to open up for casino as well.”
While the New York igaming casino market seems to be a waiting game, Segal acknowledges the affiliate’s attention is on exploring new opportunities. “What’s going to be the next province open in Canada?” he asks. “Is there an opportunity for us in LatAm that can sit nicely and synergise with our US activities?”
For now though, with the North Carolina market opening back in March, the company has its hands full with its latest licensed market.