AI Is Repricing the Gambling Industry. The Affiliate Model Is Exhibit A.
By Stephen Crystal, CEO, SCCG Management
I have spent the last several months talking to affiliate companies, operators, media executives, and platform builders across the Global Gambling Industry. The conversations are landing in the same place, no matter where they start: AI is repricing everything.
Not in the abstract, theoretical sense that people have been debating at conferences for two years. In the concrete, financial sense that is showing up in revenue lines, valuation gaps, and workforce reductions right now. And the first business model to feel the full force of this repricing is the traditional gaming affiliate.
The Foundation Is Shifting
The gaming affiliate model was built on a simple equation. Consumers search Google for sports betting or casino information. Affiliates rank for those queries through SEO. Operators pay affiliates for the traffic and depositing customers they deliver. Everyone wins.
That equation depended on Google being the primary discovery channel. It is no longer the only one that matters, and in key informational categories, it may not be the most important one.
AI platforms now capture an estimated 15 to 20 percent of informational query volume globally. Gartner has projected that traditional search engine query volume will decline 25 percent by the end of this year. ChatGPT alone has crossed one billion monthly active users and now commands roughly 17 percent of all digital queries worldwide. Research from Ahrefs found that 80 percent of citations in large language model responses do not even rank in Google’s top 100 results.
That last figure should be alarming for anyone whose business depends on Google rankings. The content that AI surfaces to users is not the same content that Google ranks. The signals are different. The selection criteria are different. And the economics are completely different, because AI answers often resolve the query without sending a click to anyone at all.
What the Numbers Say
Look at Catena Media, one of the largest publicly traded gaming affiliates. In Q4 2025, revenue grew 53 percent year over year. That sounds like a strong performance until you look at where the growth came from.
Casino and social sweepstakes drove the entire recovery. The casino segment grew 81 percent and accounted for 89 percent of group revenue. Sports affiliate revenue, the business line that was Catena’s core identity, declined 33 percent. New depositing customers in sports fell 44 percent.
Catena’s CEO acknowledged the headwinds directly, citing both sweepstakes regulatory uncertainty and the impact of generative search trends. The company is investing in prediction markets and loyalty programs to strengthen a business that can no longer rely on its traditional engine.
This is not a Catena-specific story. It is an industry-wide pattern. The affiliate companies I speak with are not making acquisitions the way they used to. They are offering revenue share deals off production, not writing checks for traffic portfolios. The economics do not support it when the underlying discovery channel is being disintermediated.
Media companies are feeling the same pressure. Sports media properties have been reducing headcount and restructuring content operations. The ad-supported, SEO-dependent model is under strain across the board, and gaming media is not exempt.
The Prediction Market Revaluation
While the affiliate model contracts, a different part of the industry is being repriced upward, and it is happening at a pace that would have been unthinkable two years ago.
Kalshi, the CFTC-regulated prediction market, raised $1 billion in May 2026 at a $22 billion valuation. It is now reportedly in discussions for a round that would value it at $40 billion. The company’s monthly trading volume has grown from $226 million in December 2024 to over $29 billion by June 2026. Sports contracts account for roughly 65 percent of Kalshi’s fee-generating volume, with parlays surging to nearly half of total volume during the FIFA World Cup.
DraftKings, which was the flagship of the post-PASPA legalization wave, saw its stock drop roughly 18 percent in a single day after issuing 2026 revenue guidance that fell $600 million below analyst expectations. The company’s market capitalization has fallen approximately 42 percent over the past year. CEO Jason Robins has described prediction markets as the most exciting growth opportunity since PASPA, and DraftKings is now actively pivoting resources from traditional sportsbook operations toward its Predictions product.
The capital is following conviction. Investors who would have written checks for sports betting operators three years ago are now writing them for prediction market infrastructure. New entrants are pursuing CFTC Designated Contract Market licenses at significant cost and regulatory complexity because the federal framework lets them operate nationwide without state-by-state gambling approvals.
What This Means for the Industry
Three things are happening simultaneously, and anyone building a strategy in this industry needs to account for all of them.
First, AI is replacing SEO as the primary discovery layer for informational queries. The content that wins in this new environment is not optimized for keywords. It is built for reputation, depth, and problem-solving specificity. AI does not crawl the way Google crawls. It evaluates whether a source is authoritative and whether the content actually answers a real question. Backlink portfolios that propped up affiliate rankings for a decade carry diminishing weight in a system that selects for substance.
Second, the CPA acquisition model is hitting a structural ceiling. In mature markets, most active bettors already have accounts with multiple operators. The cost of acquiring a genuinely new depositing customer keeps climbing, while the lifetime value of that customer is under pressure from competitive promotional environments. The real opportunity is in reactivating churned users and deepening engagement with existing ones, which is a fundamentally different problem than what affiliate SEO was designed to solve.
Third, prediction markets are pulling capital, talent, and attention away from traditional sports betting. This is not a fad. The regulatory infrastructure is being built in real time, the volume numbers are enormous, and the companies leading this space are being valued like technology platforms, not gaming operators.
Where the Winners Will Come From
The companies that thrive in this environment will not be the ones clinging to a Google-first strategy. They will be the ones that understand how AI discovery works and build their presence accordingly. That means investing in content that AI models want to cite, not content that game search algorithms. It means building brand authority that translates across platforms, not just rankings on one.
For operators, it means rethinking how customer acquisition budgets are allocated. The affiliate channel is not dead, but it is no longer the dominant growth engine it was. Prediction markets, direct brand investment, AI visibility strategy, and owned media are all competing for the same dollars, and the returns are shifting.
For affiliates, the survival path runs through diversification. The companies that are pivoting to sweepstakes, CRM, subaffiliation networks, and prediction market content are positioning themselves for relevance. The ones still dependent on traditional sports SEO traffic are running on borrowed time.
AI is not repricing the gambling industry because of hype. It is repricing it because it is changing how 1.2 billion people per month discover, evaluate, and act on information. That is not a trend to monitor. That is a structural shift to build around.
Stephen Crystal is the founder and CEO of SCCG Management, a global advisory firm serving the gaming, sports betting, and emerging technology industries. SCCG advises operators, regulators, and investors across more than 100 jurisdictions worldwide.
For more on SCCG’s advisory services across AI strategy, prediction markets, and market entry, visit sccgmanagement.com.
