In a bulletin released by the NJ Division of Gaming Enforcement (DGE) on June 4, Director David Rebuck clarifies the Division’s stance toward affiliates promoting unlicensed sites prior to and after the launch of legal NJ online casinos.
Detailed in the bulletin are the potential ramifications affiliates who refuse to abide by the rules face, as well as the conditions by which affiliates would be welcomed back into the Division’s good graces.
Bulletin not the first time DGE has confronted US-facing affiliates
The Division’s earlier position regarding affiliates that purposely direct Garden State players to offshore gambling sites can best be described as intolerant.
In April 2014, the DGE sent cease and desist letters to six US affiliates, including highly trafficked sites such as CardsChat.com, requesting that they “immediately remove any online gaming linked that are not authorized under federal law or under the law of any State,” and threatening to pursue legal action should they not comply.
An example of one these letters, sent to RaketheRake.com, can be found here.
The Division’s aggressive actions compelled offshore operators such as the Winning Poker Network and leading US-facing site Bovada to either stop accepting new registrants from New Jersey or abandon the NJ market entirely.
Of the six affiliates targeted, several (including RaketheRake.com) have stopped promoting US-facing sites altogether. Others have either abandoned New Jersey regulated sites in favor of offshore operators or hedged their bets by promoting New Jersey sites to devices geo-located in the Garden State, and US-facing sites elsewhere. CardsChat.com is the most notable site to institute this dubious approach.
I say “dubious” because as a New Jersey resident, I can simply conduct a Google search for the phrase “Cardschat Bovada” and be immediately directed to a review of Bovada by CardsChat, with links to Bovada’s homepage integrated throughout.
Bulletin addresses affiliates that promoted illegal site in pre and post regulated era
The Director’s Advisory Bulletin dedicates a section to both affiliates that promoted and marketed illegal online gambling sites after New Jersey began offering regulated iGaming options on November 26, 2013 and those who do so in the post-UIGEA of 2006 era.
Regarding the former, the DGE has adopted a softened stance. US-facing affiliates promoting to New Jersey players will become eligible for a “deferment on enforcement” in so long as they completely cease promoting or marketing illegal sites to US players within 150 days of the Bulletin’s issuance date. Furthermore the CEO or COO of the company “must submit a notarized Certification to the Division attesting to that fact,” within the same time frame.
Not only will affiliates who comply be exempt from the long arm of the law, but the affiliate’s prior actions will not be considered when “assessing the suitability of an affiliate, or its principal owners and officers and directors for licensure or registration.”
The Division’s stance toward post-UIGEA affiliates is similar.
In short, as long as these affiliates “come into full compliance with New Jersey law and the laws of other states” within 150 days of the bulletin, they’re essentially off the hook. However, failure to do so could result in enforcement action and will negatively impact the affiliate’s suitability profile.
Why has the DGE shifted its attitude toward affiliates?
Considering that the cease and desist letters were issued over a year ago, I was a bit taken aback that the DGE extended a five month grace period to NJ affiliates that to date, have refused to remove their offshore site paraphernalia.
Clearly, the bulletin represents a more moderate stance by the Division. This begs the question, “Why the change of heart?”
While the answer to that is up for debate, it’s conceivable that the Division is more cognizant of the imperative role affiliates play in drawing players to online sites and that to ostracize some of the biggest names in the affiliate world may be counterproductive to the market’s ultimate goal of generating increased revenue.
This argument carries more weight in lieu of the industry’s performance in the online poker sector, which has been in a state of continual decline.
In either case, the Division has shifted to a more neutral stance – one that in the long-run is still intolerant of affiliates that double dip, but also willing to let bygones be bygones.