The New Jersey Division of Gaming Enforcement recently released a Director’s Advisory Bulletin regarding the licensing of internet marketing companies, also known as affiliates in the online gambling world.
The advisory begins with the NJ DGE acknowledging that both affiliates and online gaming sites have raised concerns over the current policies in place that deal with affiliate licensing.
In the second paragraph, and amid a bearish period in the still young market, the DGE also acknowledges that affiliates are an important part of the iGaming ecology, saying:
“The Division recognizes that affiliate marketing companies are important to the growth of internet gaming and has reevaluated its initial licensing determination.”
With that in mind, the DGE goes on to detail and explain each affiliate model and what type of license anyone engaged in such activities will be required to receive. These models include both flat rate affiliates and revenue sharing affiliates.
The advisory also explains some gray area possibilities, such as when a player utilizing a site’s refer-a-friend promotion becomes an affiliate (at $2,500/year) as well as including some language on subaffiliates which have proliferated under New Jersey’s strict licensing policies.
The above models all require the marketer to apply for and be approved for a Vendor License in New Jersey, which is the simplest and cheapest iGaming license.
In general terms these models pay a flat fee to the affiliate, and there is no added compensation based on the amount a player wagers. The affiliate’s role with the player ends once the initial payment threshold is crossed.
You can find a complete description of each affiliate model by clicking on the Advisory Bulletin linked to in the opening paragraph.
Both of the above affiliate models require the affiliate to apply for and be approved for the more intrusive Ancillary CSIE license.
Affiliates who partake in a revenue sharing system with one or more licensed online gaming sites (where they receive compensation over the course of a player’s time at the site and often based on the amount wagered by the player) will need to apply for an ACSIE license.
According to Jeremy Enke, the cost of an ACSIE license application is $2,000 (non-refundable) and involves a very stringent background check, including fingerprints and past tax returns.
First and foremost the DGE is hoping to boost signups and traffic at the online poker and casino sites in New Jersey.
Whether these new policies will do anything on that front is unclear.
Setting aside the everything but a proctology exam licensing process, there is still the not so small matter of a $2,000 up front fee for a revenue-sharing affiliate license, in a market that has average cash-game traffic of about 300 players.
It also appears the DGE is continuing their crackdown on “shady” affiliates (affiliates that are still promoting offshore, unregulated sites) which began last month when they sent six Cease & Desist letters to various affiliates who were double-dipping, advertising licensed and unlicensed New Jersey sites.