A two-tier affiliate programme pays a publisher both for the players they directly refer (tier 1) AND a smaller commission on players referred by sub-affiliates they recruit into the programme (tier 2) — turning successful publishers into recruiters and creating MLM-adjacent compensation structures.
Two-Tier Affiliate
**TL;DR:** A two-tier affiliate programme pays a publisher both for the players they directly refer (tier 1) AND a smaller commission on players referred by sub-affiliates they recruit into the programme (tier 2) — turning successful publishers into recruiters and creating MLM-adjacent compensation structures.
What it means
In a standard single-tier programme, affiliate A is paid a revenue share or CPA only on the players they refer. In a two-tier programme, affiliate A can refer affiliate B; when B refers players, A receives a residual commission (typically 5–15% of B's earnings) without doing the acquisition work themselves.
The structure was historically common in iGaming affiliate networks (Income Access deals from the 2010s) but has receded in regulated markets due to compliance complexity and the perception that two-tier programmes encourage low-quality affiliate recruitment over high-quality player acquisition.
How it's structured
A clean two-tier programme spec:
- **Tier 1 (direct)**: 25–45% revenue share or €100–€300 CPA depending on market
- **Tier 2 (sub-affiliate)**: 5–10% of tier 1's commission earnings (NOT 5–10% of the player NGR — that detail matters for math and compliance)
- **Cap on tier depth**: most regulated operators allow only 2 tiers (no third-level pyramid)
- **Sub-affiliate vetting**: tier-2 referrals must pass the same compliance/KYC as direct affiliates; the recruiting affiliate is not a regulatory shield
Tier 2 commissions are calculated on the **net amount paid to tier 1**, not on player NGR. So if tier 1 earns €100 in a month from referred players, tier 2 receives €5–€10 of that €100 (not 5–10% of player NGR).
Why it matters for operators
Two-tier programmes can be a useful growth lever for operators with strong existing affiliate relationships who want to expand affiliate recruitment without scaling their own affiliate-manager headcount. The recruiting affiliate has skin in the game to onboard quality partners.
The downsides:
- **Regulatory exposure**: in UK, Sweden, Netherlands, Germany, regulators require operators to know every affiliate driving traffic. A sub-affiliate recruited without operator visibility is a compliance liability.
- **Quality dilution**: tier 1 affiliates are incentivised to recruit any tier 2, including low-quality or fraudulent ones, because their downside is just the wasted recruitment effort.
- **Attribution conflicts**: if a player is referred by two different sub-affiliates under two different tier 1s, the attribution rule must be explicit (last click, first click, hybrid).
Common pitfalls
- **No KYC on sub-affiliates**: the recruiting affiliate is not your compliance officer. Vet every tier 2 directly.
- **No cap on tier-2 share**: without a cap, sophisticated tier 1s build large networks that effectively middleman the operator with no added value.
- **MLM-adjacent marketing**: in some jurisdictions (Germany, Italy), pyramid-style compensation structures attract regulatory scrutiny regardless of intent. Two-tier is the safe ceiling.
- **Confusing two-tier with master-affiliate deals**: a master-affiliate runs an exclusive network and gets a kickback; that is a contractual structure, not a programme feature.
[iGaming Affiliate Strategy 2026](/resources/guides/igaming-affiliate-strategy-2026) and [iGaming Affiliate Deal Structures 2026](/b-content/insights/igaming-affiliate-deal-structures-2026) cover programme design. [Contact Basher](/contact) for affiliate-programme strategy.