GPWA Times Magazine - Issue 33 - October 2015

New Jersey affiliates can no longer have it both ways Affiliates will have to choose between promoting regulated sites in New Jersey or offshore sites that accept American players. By Dan Podheiser O n June 4, 2015, the New Jersey Division of Gaming Enforcement (DGE) released a memo that outlined the policies affiliates must comply with if they want to obtain – or continue to hold – an “affiliate license” and have previously promoted or currently promote sites that “illegally” take deposits fromU.S. players. The memo gave affiliates 150 days, ending Nov. 1, 2015, to “completely cease promot- ing or marketing, directly or indirectly, any illegal online gaming sites accepting wagers from players in the United States” and to “submit a notarized Certification to the Division attesting to that fact.” The DGE is effectively providing leeway to affiliates that marketed sites not li- censed by New Jersey to New Jersey resi- dents after the state launched regulated online gambling on Nov. 26, 2013. Even though the DGE says affiliates that pro- moted such sites after the launch violated New Jersey law, the agency has made it clear that if affiliates comply with the am- nesty process, it will not take enforcement action against an affiliate or consider that affiliate’s prior conduct when assessing the suitability of its license application. If affiliates licensed by New Jersey do not comply with the DGE’s eligibility require- ments within the 150-day grace period and continue to promote sites licensed outside the state to New Jersey residents, their licenses could be revoked and fines imposed. Furthermore, noncompliant affiliates will be deemed unsuitable for licensure or registration by the DGE going forward. The DGE has not addressed the potential consequences for affiliates not licensed in New Jersey that continue to promote “il- legal” sites to New Jersey residents. “If New Jersey-facing affiliates were pre- viously unsure about the consequences of advertising both regulated and un- regulated brands, the DGE’s June 4 state- ment makes the situation entirely clear,” Income Access CEO Nicky Senyard told the GPWA in June. “By giving affiliates 150 days to adjust their marketing ap- proach, the regulator has also given them a window of opportunity; affiliates have the time to make a decision about what action to take.” The DGE also took a stance on affiliates that promoted online gambling sites to U.S. residents after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) on Oct. 13, 2006. The DGE has previously found operators that took wagers from American players af- ter UIGEA to be unsuitable for a New Jersey license. However, the DGE made a distinction between operators and af- filiates in the memo, noting that affiliates “did not actually consummate the gaming transaction” and that “there was clearly some legitimate uncertainty as to whether the actions of an affiliate promoting or marketing to an illegal gambling site was, in and of itself, an illegal act.” Therefore, the DGE will not take enforcement action Revenue by operator since launch (through July 2015) Operator Poker Casino Total Borgata/Party $25,009,184 $50,076,362 $75,085,546 Caesars/Harrah’s/888 $20,911,337 $32,759,818 $53,671,155 Golden Nugget/Betfair $140 $37,170,642 $37,170,782 Resorts AC - $1,701,297 $1,701,297 Tropicana/Virgin - $42,090,126 $42,090,126 TOTAL $45,920,661 $163,798,245 $209,718,906 Data provided by the New Jersey Division of Gaming Enforcement. 26 New Jersey affiliates can no longer have it both ways