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XLMedia has inked a new hybrid revenue share partnership with bet365 in North America.

The agreement is in line with XLMedia’s previously stated strategic objective to diversify its revenue streams, it said, and “deepens the commitment both XLMedia and bet365 have made to North American expansion.”

The deal “combines customer acquisition with longer term retention,” and forms the basis of a multi-year partnership agreed by the two companies.

XLMedia added that the agreement will have responsible gambling “at its core,” and that the companies will together drive education and engagement on RG topics through collaborative content.

“We are pleased to expand our global relationship with bet365,” said XLMedia CEO David King. 

“In line with the stated strategy, this hybrid agreement is the start of XLMedia building a new, sustainable revenue stream in North America.”

XLMedia’s US background

In 2022, XLMedia generated $46.4m revenue from the US sports betting sector, accounting for 64.2% of the group’s revenue from continuing operations to make it the company’s largest business segment.

Prior to signing its new agreement with bet365, however, XLMedia’s US business worked primarily on cost-per-acquisition (CPA) deals, meaning the business was paid upfront for all newly referred customers but did not take a share of their betting revenue.

By contrast in Europe, the business works mainly on a hybrid model similar to its new agreement with bet365, whereby it receives a smaller upfront CPA alongside a percentage of revenue from each customer’s betting activity.

Through a combination of owned brands and media partnerships, XLMedia has national coverage across all 50 US states, and attracted 11.3 million monthly unique users across its owned and operated brands in Q4 2022 according to data published at the group’s latest capital markets day.

Meanwhile, XLMedia’s media partner websites attracted more than 81 million monthly unique users throughout 2022.

In addition to shifting from a CPA to a hybrid rev share business model, XLMedia’s US strategy includes the development of offerings in new verticals such as DFS, partnering with more US-facing operators and sports-adjacent partners, and expanding its media partnerships and owned and operated brand portfolio across the country.

The group will consider small, targeted acquisitions in order to follow through on that strategy, it said.

Bet365 in the US: slow and steady

Bet365, meanwhile, has so far taken a decidedly cautious approach in US markets.

The brand is currently live in just four states; Colorado, New Jersey, Ohio and Virginia (in addition to the Canadian province of Ontario), and has remained tight-lipped about its expansion strategy in North American markets.

Up against tough competition from major US brands including FanDuel, DraftKings and BetMGM, bet365 is thought to hold just a tiny proportion of market share in each of those states.

A focus on affiliate marketing, where costs are directly related to performance, is likely a significant element of bet365’s strategy in the US, where its competitors, in contrast, have sunk hundreds of millions of dollars into traditional marketing channels in recent years.