The New Jersey Division of Gaming Enforcement (DGE) has given online gambling affiliates a 150-day window to clean up their acts if they wish to promote state-regulated sites to New Jersey residents in the future.
A memo sent by the DGE and forwarded to the GPWA by Income Access (which has worked with the DGE on sorting out the affiliate marketplace) 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 U.S. players. According to the memo, affiliates have 150 days (as of June 4, 2015) to “completely cease promoting or marketing, directly or indirectly, any illegal online gaming sites accepting wagers from players in the United States,” and to “submit a notarized Certification to the Division attesting to that fact.”
The DGE is effectively providing leeway to affiliates that marketed sites not licensed by New Jersey to New Jersey residents after the state launched regulated online gambling on Nov. 26, 2013. Even though the DGE says affiliates that promoted such sites after the launch violated New Jersey law, the agency has made it clear that if affiliates comply with the amnesty process, it will not take enforcement action against an affiliate or consider that affiliate’s prior conduct when assessing the suitability of its license application.
If affiliates licensed by New Jersey do not comply with the DGE’s eligibility requirements within the 150-day grace period and continue to promote sites licensed outside the state to New Jersey residents, their licenses could be revoked and fines imposed. Furthermore, those noncompliant affiliates will be deemed unsuitable for licensure or registration by the DGE going forward.
The DGE has not addressed the potential consequences for affiliates not licensed in New Jersey that continue to promote “illegal” sites to New Jersey residents.
“If New Jersey-facing affiliates were previously unsure about the consequences of advertising both regulated and unregulated brands, the DGE’s June 4 statement makes the situation entirely clear,” said Income Access CEO Nicky Senyard. “By giving affiliates 150 days to adjust their marketing approach, the regulator has also given them a window of opportunity — affiliates have the time to make a decision about what action to take.”
The DGE has also taken a stance on affiliates that promoted online gambling sites to U.S. residents after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) on Oct. 13, 2006. The DGE has previously found operators that took wagers from American players after UIGEA to be unsuitable for a New Jersey license. However, the DGE has made a distinction between operators and affiliates, noting that affiliates “did not actually consummate the gaming transaction” and that “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.” Therefore, the DGE will not take enforcement action against those affiliates that marketed to U.S. players after UIGEA, provided they comply with New Jersey law within 150 days.
There are currently two types of licenses that an affiliate can acquire if it wishes to promote regulated online gambling sites in New Jersey. The first type is Vendor Registration, which allows affiliates to earn CPA commissions and offer media buys (CPC and CPM). This type of license is free to acquire.
The second type of licensing is the Ancillary Casino Service Industry Enterprise License, which allows affiliates to earn commissions through revenue sharing. This license requires an upfront fee of $2,000.
The June 4 memo is not the first time the DGE has addressed affiliates that promoted online gambling sites not licensed by New Jersey. On April 17, 2014, the DGE sent a letter to six online poker affiliates, warning them to cease and desist from promoting such sites. The letter stated that the affiliates, “by offering links to sites which may be offering unauthorized online gaming, may be promoting activity that is contrary to New Jersey and federal law.”
The letter preceded a May 14, 2014 announcement by the Winning Poker Network that it wouldstop accepting players from the three U.S. states (New Jersey, Delaware and Nevada) that license and regulate online gambling.