Yesterday, the New Jersey Office of the Attorney General, Department of Law and Public Safety, Division of Gaming Enforcement (“DGE”) released additional guidance for affiliate marketing companies working with state online gaming operators. The full text of the letter can be viewed here.
Affiliate marketers working in New Jersey’s iGaming industry are licensed by DGE based on how they are compensated. The letter indicates that affiliates who are paid a flat fee for directing traffic to a site can register as vendors, whereas affiliates whose compensation is tied to player activity are required to obtain an ancillary casino service industry enterprise (“CSIE”) license. If an affiliate has an agreement with a “sub-affiliate” then the type of licensure required for both the affiliate and the sub-affiliate is also determined by the compensation each receives. All affiliates are required to ensure that all sub-affiliates are properly licensed and the letter warns that conducting business with an unlicensed sub-affiliate could result in the revocation of an affiliate’s license.
The DGE letter approves certain compensation models for affiliates based on the type of license required and noted that these specific models are the only ones approved by the Division at this time. For affiliates holding a vendor registration, compensation can be based on the cost per click, the cost per impression, the cost per action (such as a sign up fee or download fee) or if it is part of a flat fee sponsorship deal.
An ancillary CSIE is required if the affiliate marketer is paid based upon how much money a player deposits or the total number of bets the player makes, if there is a revenue share agreement between the affiliate and the gaming operator, or if there is a hybrid revenue share agreement based in part on how much money the player deposits or bets.
The letter goes on to state that DGE will require all affiliates to produce a monthly report detailing all compensation; and all compensation must be based on the contract that the affiliate provides to DGE. Affiliates may not receive compensation for business gained through contracts that are based outside of New Jersey.
DGE affirms in the letter that it recognizes the importance of affiliate marketers in promoting the growth of the internet gaming industry in New Jersey. The letter will provide further guidance to affiliate marketers in the state’s iGaming industry as they continue to help the industry grow.