GPWA Times Magazine - Issue 29 - July 2014

understand what your decision means and understand that the DGE is serious about its job and its role," Petrilli said. Anewaffiliatemarketplace Ken Smith created BlackjackInfo.com in 1998andhasbeenanonlinegamingaffili- ate since 2001. He created two other sites and became a full-time affiliate in 2005, and has been a firsthand witness of the ups anddowns of the industry, especially in theU.S. Flash forward to 2011. Smith, who had closely followed the regulatory land- scape in the U.S., realized the only real hope for online gaming returning to the countrywas through a state-by-state ap- proach. Late that year, he acquired a set of domains to target the potential state- by-statemarket. Today, his New-Jersey-Online-Casinos.com is a New Jersey-focused online gaming affiliate website that promotes only li- censed online casinos in the state. The site is a standardWordPress blog, with recent posts titled "Wolf Run is Game of theMonth at Betfair" and "Review of 888Casino inNew Jersey." It provides a complete list of licensed online casinos andpoker rooms, site andgame reviews and other newsworthy items. A large Betfair Casino banner runs across the top of the page. This, in a verybasic sense, iswhat aNew Jersey online gaming affiliate looks like. The idea seems easy enough, but the im- plementationwasn't so simple for Smith. "The main challenge for me was the bu- reaucracy . . . learning what paperwork was requiredandmaking sure I complied with all the New Jersey requirements," Smith said in an e-mail conversation. TheNew Jersey affiliate landscape differs fromEurope's inabigway:Affiliatesneed to be licensed by the state, and there are two types of licenses that an affiliate can acquire, which allow them to earn differ- ent types of commission structures. The first type is Vendor Registration, which allows affiliates to earn a flat fee, cost-per-hundred clicks (CPC) or cost- per-thousand clicks (CPM). In order to acquire vendor registration, affiliates must submit a Vendor Registration Form to an online casino, which then sub- mits that form to the DGE. The affiliate must then submit a Vendor Registration SupplementalDisclosureFormdirectly to the DGE. This type of licensing is free to an affiliate. The second typeof licensing is theAncillary Casino Service Industry Enterprise (CSIE) License, which allows affiliates to earn commissions through revenue sharing, cost-per-acquisition (CPA) and cost-per- lead (CPL). Affiliates need to fill out four different forms and submit them to the DGE, and this license requires an upfront feeof $2,000. "For affiliates who are used to clicking 'Register Now' and being able to post banners on their site 10minutes later, the New Jerseyprocesswill comeas a shock," Smith said. But beyond the regulatoryhoops to jump through, Smith said the biggest challenge foraffiliates is targetingadvertisements to New Jerseyplayers. "You must either have a way to attract [New Jerseyplayers], orhavea tonof traf- fic toyour existing sites that you cangeo- target for theNew Jersey portion," Smith said. "It's interesting to compare it toa sit- uation like, say,Denmark. . . . If youwant to target Denmark, [you] develop con- tent in Danish and bingo, you're getting Denmark traffic. So, how do you do that forNew Jersey? Accents aside, theydon't speak a different language [from the rest of theU.S.]. Ifyourvisitorsareall over the English-speakingworld, then only a frac- tionwill bepotential customers." For affiliates who are now forced to de- cide between promoting licensed or unli- censed sites, it could be a toughdecision. Bovada can now be promoted in 47 U.S. states, but onlyNew Jersey residents can play on Party Poker. Reluctance to shift into a fully regulated marketplace could stall thegrowthof theNew Jerseyaffiliate market, according toSmith. "Still, I believe that this is absolutely the correct thing forNew Jersey todo," Smith added. "I think it is critical that the indus- try protects regulated businesses. They want to make sure the customer under- standswho the regulated casinos are." What does the futurehold? Gaming analyst Thomas Allen predicted inMarch that legal Internet gaming in the U.S. will produce $8 billion annually by 2020.New Jersey is just sevenmonths into its regulated market, but companies are investingheavily inmarketinganddevel- oping their newonlinebusinesses. The Borgata, which has dominated the New Jersey brick-and-mortar market for the past decade, has also taken the lead on the Web. It will continue its plan to get out of the redby the endof 2014. The Borgata is developing a mobile applica- tion for the iPhone, and it wants to gain a better understanding of the seasonality of the industry. "The one thing about online wagering is that there is immediateandvery thorough analysis of not only feedback but the suc- cess and failuresof different promotions," Lupo said. "It's obvious what works and what doesn't." . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DanPodheiser is the associate editor of the GPWA TimesMagazine. He has followed the online poker industry closely for the past 10 years, and played consistently onU.S.- friendly sites prior to Black Friday. 44 Affiliates face a different business environment inNew Jersey