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Gaming Guru

Karime Garcia
 

Affiliate marketing in the US

5 March 2019

New Jersey is one of the most strongly regulated online gaming markets, and one where the authorities keep the requirements for obtaining an online gaming affiliate license up to date. The newly revised guidelines are set to strengthen the previous set by ensuring that affiliate marketers do not promote gambling platforms not authorized by the state. The Division of Gaming Enforcement (DGE) understands the importance of keeping online gaming affiliate sites regulated under state law.

If the DGE is to let affiliate marketers promote unregulated online gaming sites, then ignorant gamblers will be exposed to unlicensed gaming sites. With affiliate marketing programs being the mainspring for online gambling sites to obtain new gamers, it is vital for authorities to regulate the affiliate marketers. By doing so, the DGE reduces the number of offshore operators and prevents unlicensed gaming sites from being promoted by legitimate affiliate marketers. Moreover, the promotion of offshore operators drives tax revenue away from the states of New Jersey and Pennsylvania. This translates to an unfavorable environment for licensed operators who duly pay their fees yet compete with unlicensed vendors that do not pay taxes.

Licensing requirements
New Jersey and Pennsylvania are among the few licensed online gaming jurisdiction states. The states take the regulation of affiliate marketers seriously, and there are certain requirements that an entity has to meet before becoming a licensed online gambling affiliate. These requirements are set to produce a uniform affiliate program that will work in favor of the licensed New Jersey and Pennsylvania gaming sites. The process for registration is defined by the structure selected by the entity. There are two different models in affiliate marketing accepted in New Jersey and Pennsylvania, and each model presents a different registration process. The models are defined by the type of accord the marketer has with the vendor. The two ways in which a marketer can operate within the states are by obtaining either a vendor license or an ancillary license.

Vendor license
By obtaining a vendor license, the marketer is paid a flat fee to redirect relevant traffic to the agreed-upon gambling platform. The marketer-vendor agreement can rely on cost-per-click (CPC), cost-per-action (CPA) or cost-per-view (CPV).

The CPC agreement states that the marketer is to get paid if a visitor generated by the marketer clicks an affiliate link or banner, whereas the CPV agreement states that the marketer is to be paid when a unique visitor views the affiliate advertisement on the marketer’s website. The cost-per-action states that the affiliate marketer is to be paid a flat fee when a visitor from their website registers with the specific gaming site or downloads the software.

The registration process for becoming a vendor license holder does not cost a penny. However, the VFR form, together with the Vendor Registration Supplemental Disclosure Form (VRSDF), has to be submitted by the interested affiliate marketer to a regulated casino. The casino in question will then submit the forms to the DGE. Upon approval, a temporary license will be granted and the affiliated entity added to the approved list of active vendors.

Ancillary license
Another way an entity can be eligible to work with New Jersey’s online gambling sites as an affiliate marketer is through obtaining an ancillary license. The ancillary CSIE license can be obtained in a more catholic manner than the procedure spelled out for a vendor license. The newly revised guidelines indicate that affiliate marketers with the obligation to operate with an ancillary CSIE license need to use the Revenue Share marketing form. The form entitles affiliate marketers to receive a percentage from the converted clients’ deposit amount. Moreover, it can also entitle the marketer to a percentage revenue share spent by the client at a particular gaming site for their entire lifetime.

With that said, the ancillary CSIE license is obtained if the marketer is to gain revenue rooted in the total expenditures of the gamer, the total amount in bets the gambler makes, or the deposit amount the player makes. If an affiliate marketer is to have sub-affiliate marketers, they will also need an ancillary CSIE license.

To obtain an ancillary CSIE license, the interested entities are subject to a minimum application fee of $2,000 payable to the Casino Control Fund. Upon obtaining the license, a resubmission is required in no more than five years for renewal.

The newly revised guidelines of the DGE state that all affiliate marketers are to release a monthly report showing all compensations as per contract or license held by the marketer. This further illustrates that any business obtained through contracts that are not regulated by the states’ authority will not be compensated.

Crackdown on unregulated gambling platforms in New Jersey and Pennsylvania
It is evident that unregulated gaming sites have a negative effect on the progress of licensed New Jersey gambling platforms. As a result, the latest DGE revision addresses the issue and aims at preventing the wrongful use of affiliate marketing licensing to promote unregulated gaming sites in New Jersey and Pennsylvania. For instance, raketherake.com promoted various offshore gambling sites that are not based in the U.S. and not regulated by the DGE. For this reason, the authority had to address the matter with the respective affiliate and amend the affiliate marketer’s laws.

Allowing licensed affiliate marketers to promote unregulated gaming sites together with regulated ones would taint the legitimacy of licensed gaming sites. With the unregulated gaming platforms in the picture, the ground is imbalanced for the regulated sites. Licensed gaming sites only operate within New Jersey and Pennsylvania, while the unregulated gaming sites have the liberty to obtain clients from all over the world. This means the licensed gaming sites have to compete with unregulated sites that have no restricted source of income as well as reduced operating costs, since they are not obligated to pay taxes. For this reason, the DGE had to be strict in regulating affiliate marketers, who are the backbone of channeling gamers to licensed gambling platforms as well as unregulated ones.
Affiliate marketing in the US is republished from iGamingAffiliatePrograms.com.
Karime Garcia

Karime Garcia is the U.S. affiliate manager at Kindred Group. She has a wealth of experience in senior affiliate management roles in the iGaming industry. Karime previously worked for Wintrillions as head of acquisition (lotteries and casino), and before that, she held a position as a global acquisition manager at Referback (Buffalo Partners).
Karime Garcia

Karime Garcia is the U.S. affiliate manager at Kindred Group. She has a wealth of experience in senior affiliate management roles in the iGaming industry. Karime previously worked for Wintrillions as head of acquisition (lotteries and casino), and before that, she held a position as a global acquisition manager at Referback (Buffalo Partners).