Author: Staff

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.

nj.partypoker.com affiliate program

borgatapoker.com affiliate program

Caesars affiliate program

888.com affiliate program

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.

For those interested in becoming an affiliate in New Jersey or if you have additional questions, I’m always happy to help. You can reach me on Twitter @JeremyEnke, or via email [email protected]

And a special thanks to the crew over at LegalNJOnlineCasino.com for giving me the heads up as soon as this information broke.

Three states regulated online poker in 2013, but so far 2014 has failed to live up to the same excitement that occurred during last year’s historic launches.

That has changed a bit over the last month in couple key, well-populated U.S. states. In late April a well-publicized hearing in California was seen as a positive step for regulation in the state.

Good news followed in Pennsylvania on Wednesday when a highly anticipated study was released with findings that online casino gambling would not cannibalize the state’s dozen or so land-based casinos. Both states saw material increases in their chances for regulating by the end of 2015.

As to the question of what other states are on the horizon to regulate, that is a question many industry observers are pondering on a daily basis. While many of us speculate about what the future holds for the rest of the U.S., the many moving parts make it difficult to predict precisely when the next states will regulate in the future.

Of course, speculating is a big part of what us in the poker media like to do.

PAS recently posted a handy guide that details which states are likely to follow Deleware, Nevada and New Jersey. While I can’t agree with all of the categories detailed on that chart, it is a pretty good overall guide for where things are at the moment.

Previous Regulation Will Make it Easier

Those who impatiently waited through the sluggish regulation and licensing process in New Jersey and Nevada might come to the conclusion that without any imminent legislation the industry could be at least 2 years away from seeing cards dealt in the next state. While it’s true going live with regulated online poker is a rigorous process with many hurdles, it very well could be much faster process than we saw with the first three states.

Nevada took 18 months from the signing of legislation until cards at Ultimate Poker were dealt. New Jersey only took only 9 months from the signing of their bill until their November 2013 launch. With subsequent states, there is a sense that the process would much more closely mirror New Jersey than Nevada and likely will even take less time.

Many of the same companies will be involved in each state’s market and will be very familiar with the process in these emerging markets. Relationships and trust has been established. Mistakes have been made. Software has been tested. The more states that regulate, the more efficient companies will become at launching online poker in the more stringent US regulatory environment.

So while it may be easy to fall into the trap that regulation is many years away in some jurisdictions, it may be wise not to discount the previous groundwork that has been laid.

Add state competition and an insatiable desire for tax dollars to the mix and the dominos could really start to fall at some point. And this is without even considering that the population is quickly realizing the world will not go to hell despite what anti-gambling types have told us over the last decade.

What States Are Next

Many states have legislation that that stalled or in a holding pattern, but here is where would I put my money for states regulating in the next 2-3 years.

Pennsylvania

This week’s study of online poker in PA was seen as a huge positive and cements the state’s position as one of the best bets to be next to regulate. A neighbor of New Jersey, there is already some pressure for the state to join the action from a competition angle.

The four month long study found that that the state would generate $187 million in revenue in the first year and $307 million in subsequent years, all while complimenting land-based action. These facts should ease the concerns of many Pennsylvania legislators that were on the fence.

California

With 28 million residents, California is the 800 pound gorilla in the room, an undeniable game changer in the United States market.

There seems to be a strong interest in regulating online poker in the state, but a strong disagreement on how to go about it. PokerStars agreement with key California gaming interests only further complicates the efforts in the state. Finding consensus amongst California’s many Indian tribes has been and will continue to be arduous process to say the least.

New York

Another state in New Jersey’s backyard, New York’s inclusion in the regulated market may be partly a case of keeping up with the Joneses.

In late March, a bill was introduced in the New York Senate and followed up by a bill that was introduced in the Assembly last week. New York had last attempted to pass a bill in early 2013.

Unfortunately, the bill’s sponsor, Senator John Bonacic does not intend to try to push the bill this year, but says a dialogue must be started.

Iowa

Iowa has made tried unsuccessfully numerous times over the last few years to regulate online poker. President and CEO of the Iowa Gaming Association Wes Ehrecke says that the issue has been shelved for the rest of 2014.

The state will be intently watching the progress in New Jersey and will likely bring up a bill during the 2015 legislative session.

Massachusetts

There has been significant interest in online poker regulation in Massachusetts, which could accelerate as other surrounding states regulate.

Unfortunately, Stephen Crosby, who is the Gaming Commission Chairman in the state says online gambling won’t be a reality at least until the land-based industry gets off the ground, which probably wont happen until 2015.

Illinois

Like Massachusetts, Illinois will likely be held up until the land-based market opens up first. That could happen soon as the state recognizes they are losing tax dollars in riverboat casinos in nearby Hammond, Indiana.

Regulation in Illinois is seen as inevitable but will almost certainly have to wait until at least 2015 before the wheels start turning.