With over 6 months of regulated online gambling in New Jersey, one area of the industry that has remained somewhat of a gray area has been affiliate marketing. Well, until today that is.
This afternoon New Jersey’s DGE (Division of Gaming Enforcement) released an official press release outlining acceptable affiliate compensation models, as well as the type of license the affiliate will need of the two available, vendors registration or a full CSIE (ancillary casino service industry enterprises).
While each type of license will allow affiliates to promote New Jersey’s operators in various forms of marketing – PPC, CPC, revenue share, flat ads – it can be summed up simply like this…
Abilities as a Vendor
With a vendors registration permit, the affiliate will be limited to promoting on flat ad or CPA deal with the operator. Likewise, the affiliate can in no way be compensated based upon a dollar amount gambled, such as how the traditional revenue share models work in affiliate marketing.
Interesting however in sec. 4.D Betting Fee, it states that these affiliates with vendors permits on CPA deals can indeed be compensated for every coded user that makes a certain number of bets on a gaming site.
I imagine this could be a popular threshold for affiliate programs as awarding CPA’s simply based solely on deposits or downloads could leave operators prone to fraud
The Ancillary License
As expected, the ancillary license, which involves a much more comprehensive process to receive than the vendors permit does, will allow affiliates to be compensated based upon net gaming revenue.
So for the affiliates familiar with the industry, this means a “rev. share” percentage.
Steps to Becoming a NJ Online Gambling Affiliate
Below is all the information you need to know about applying for either a vendor’s permit or full ancillary license.
Applying for a Vendor Permit
Receiving a vendor’s permit essentially will allow affiliates to work with casinos in a flat fee or paid advertising capacity.
Affiliates, however, must submit the VRF form to a casino that will then submit to the DGE. Affiliates must also submit a supplementary form themselves to the DGE.
So during your daily travels on the Internet superhighway, when you see New Jersey online gambling operators being promoted, it is more than likely that the owner of that individual website indeed already has a vendors permit.
Process to Acquire Ancillary License
The second way in which affiliates can become eligible to work with New Jersey’s online gambling operators is by receiving an ancillary license. And as stated above, this license will allow the affiliate broader options of promoting, such as revenue share, or compensation based upon net gaming.
The process to receive an ancillary license is far more comprehensive and in depth however. Affiliates must fill out forms 30A, 31A, 32A, and 36 found here.
On these forms, affiliates will be asked to provide a wealth of information pertaining to their current business, as well as previous businesses.
Affiliates will also be required to submit fingerprints and past tax returns to the DGE prior to receiving their ancillary license.
And while the ancillary license will give affiliates more flexibility in their compensation models, it also comes with non-refundable fee of $2,000.
However, the non-refundable $2,000 fee is more than likely paltry to the legal expenses and preparation it takes to simply submit an application for an ancillary license.
Other Notables from DGE’s Statement
Programs will be allowed to offer refer a friend programs, however no player can be compensated more than $2,500 in calendar year.
A sub-affiliate model will be available. It does state that “master affiliate” can only act up to their level of licensure, so basically, (CPA or revenue share). The master affiliate must also ensure that the sub-affiliates they do business with are properly licensed.
Upon entering a sub-affiliate agreement, the DGE will need to receive a copy of the affiliate agreement. Should a master affiliate have a improperly licensed sub-affiliate promoting their trackers, they may be subject to regulatory action or revocation of their license.
So Whose Affiliate Programs are Live?
Below are the affiliate programs that are currently live in the Garden State. If I missed someone, please email me and I’ll be happy to add your link.
My take on it all from an affiliates perspective
I have been anticipating the release of this letter for a few weeks now. Frankly, it is pretty much what I expected.
I think there still needs to be a little further clarification in the “sub-affiliate” model as I expect this to be popular with programs like PokerAffiliateSolutions.com who will undoubtedly offer New Jersey trackers as soon as possible.
I also do not see a huge influx of affiliates applying for ancillary licensure. For one, the process is quite intrusive and expensive for the simple privilege of being able to receive traditional revenue share in one regulated state.
Furthermore, with the absence of being able to offer incentive schemes such as rakeback, these days most affiliates actually prefer a CPA anyways. And without the CPA being able to have a specific handle or betting amount, it makes for an advantageous compensation model for affiliates.
Overall, there was nothing necessarily earth shattering or unexpected in this press release by the DGE. As a current affiliate in New Jersey however, it is nice to finally see clarification on what exactly is allowed and what is not.
And a special thanks to the crew over at LegalNJOnlineCasino.com for giving me the heads up as soon as this information broke.