Affiliates either previously operating in, or currently promoting the US iGaming market need to stay up to speed with the latest industry developments, particularly when it comes to the rules on promoting unregulated iGaming brands.
Recent news coming out of the New Jersey Division of Gaming Enforcement (DGE) has confirmed that they are taking a less draconian stance on New Jersey iGaming Affiliates who have promoted, or who currently promote unregulated online gaming sites.
While online gaming became regulated in the US state of New Jersey in 2013, the rules involving affiliate marketing of regulated online gaming operators have been somewhat undefined. That is until now.
While affiliates were paid under various compensation models for marketing to US players after UIGEA, there was clearly some legitimate uncertainty as to whether the actions of an affiliate promoting or marketing to an illegal gambling site was, in and of itself, an illegal act.
In June 2015, the DGE kindly outlined several criteria for affiliates via a Director’s Advisory bulletin that relaxes its rules on iGaming affiliates promoting unregulated brands.NJ DGE
The bulletin, dated June 4, 2015, states:
Any affiliate (and principal owners, officers and directors):
- currently licensed – or –
- currently registered –or—
- future applicants for registration or licensure
promoted or marketed online gaming sites to U.S. players post-UIGEA –or— promoted or marketed illegal gaming sites to NJ or U.S. players since November 26, 2013 Will not be subjected to enforcement action by the DGE for its past conduct if the affiliate, within 150 days of this bulletin posting:
ceases to promote any illegal online gambling site to any NJ or U.S. players where such conduct is illegal submits a notarized certification attesting to this fact
The DGE memo outlines the process with which affiliates must comply if they want to obtain – or continue to hold – an affiliate license: and have previously promoted or currently promote sites that illegally take deposits from US players.
Affiliates operating in the regulated state of New Jersey must stop promoting or marketing to, directly or indirectly, any non-regulated online gaming sites that accept deposits and wagers from players in the US. Plus, they must also submit a notarized certification to the DGE that confirms that they have formally ceased promoting illegal online gaming sites.
The key takeaway from this DGE directive is that affiliates are going to have to make some very clear and important choices. The Director’s Advisory bulletin even notes a 150-day window in which affiliates have to put all their ducks in a row if they wish to promote state-regulated sites to New Jersey residents in the future.
The 150-day compliance period gives affiliates time enough to adjust their marketing approach, and if New Jersey-facing affiliates have been uncertain about the consequences of advertising both regulated and unregulated online gaming brands before, the DGE’s June 4th bulletin lifts the fog and makes things crystal clear for everyone.
Affiliates that fail to comply will risk being left out of the regulated US market moving forward as it continues to grow in size and revenue potential.
At least affiliates now have some guidelines on what to expect if an affiliate doesn’t comply within the 150 days. The good thing is that the DGE is effectively offering affiliates an amnesty process; those who clean up their act within the 150-day allotted timeframe will not be penalized when assessing the suitability of an existing affiliate license or new license application to operate as an affiliate in New Jersey.
The implication is, however, that New Jersey licensed affiliates who do not comply within the specified timeframe, and who continue to promote illegal sites outside the state to New Jersey residents, could have their licenses revoked, and fines imposed. They would also be deemed inappropriate for licensure or registration in the future.
While, the DGE has not overtly addressed the possible consequences for affiliates not licensed in New Jersey that keep promoting illegal sites to New Jersey residents, it’s expected that they will be blacklisted not just in New Jersey, but in other states as well. They may also face legal actions for non-compliance.
According to the New Jersey Director, affiliates are in the clear regarding the 2006 UIGEA Bill, and they will not be penalized for driving US-facing traffic to offshore online gaming companies post UIGEA. The DGE has made a distinction between operators and affiliates based on the fact that affiliates “did not actually consummate the gaming transaction”, as well as the fact that up until now, there was confusion surrounding the legality of an affiliate promoting or marketing to an illegal offshore gambling site.
For those not yet licensed in New Jersey who choose to comply with the DGE’s new rules, and who wish to become legal as an affiliate in New Jersey, there are two types of license that an affiliate can apply for. The first type is known as Vendor Registration, which permits affiliates to earn CPA commissions and offer media buys (CPC and CPM). This type of license is free.
The alternative license is known as an Ancillary Casino Service Industry Enterprise License, which gives affiliates permission to earn commissions through Rev Share deals. To acquire this license will set you back $2,000, and it’s a fee that must be paid upfront.
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