NJ Draws Line in the Sand for Online Betting Affiliates

On June 4^th, the New Jersey Department of Gaming Enforcement (DGE) issued a Director’s Advisory Bulletin advising online betting affiliates to stop promoting unlicensed offshore sites to players in the United States. People who currently promote illegal gambling sites have 150 days to fall in line and receive amnesty from any future legal action.

This announcement will result in changes for everyone. I’ll explain the announcement in more details first and then talk about what this means for BettingUSA.com below.

Overview of the NJ Declaration

Last week’s advisory addresses two key issues regarding the promotion of online betting sites. First, the bulletin explains that one of the major concerns of authorities are affiliates who continue to promote unlicensed offshore betting sites to New Jersey residents even after the state legalized online poker and casino gambling in 2013.

The DGE sees unlicensed gaming sites as a threat to the legalized market in New Jersey. Last year, the DGE even sent cease and desist letters to five affiliate websites that promote offshore sites.

Second, the advisory addresses affiliates who have recommended offshore betting sites at any point after the passage of the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA). This covers a wide swath of websites – as pretty much anyone who ran a website post-2006 promoted “illegal” casino, poker, bingo and sports betting sites at some point.

The most recent advisory once again iterates that those who continue to promote offshore sportsbook sites are subject to enforcement action by the Division. This could include criminal and civil action as well as being prohibited from consideration should an affiliate apply in the future to promote NJ-legal betting sites.

What is an affiliate?

An affiliate is anyone who runs a betting website and recommends gambling sites to readers in return for advertising fees or commissions. So basically, anyone who runs a website that makes money by referring players to real money betting sites is an affiliate. This is the most common and broadest definition that you typically see on the internet.

It should be noted that the term “affiliate” in this context doesn’t just apply to people who have intimate, formal relationships with betting websites. If you earn money to promote gambling sites in any manner, you are an affiliate. This incudes major informational websites, personal blogs and anyone else who earns any income referring players to betting sites.

150 Days to Comply

The bulletin did throw affiliates a bone by giving them 150 days to comply without risk of legal action. If an affiliate stops all promotion of offshore gambling sites to US players within 150 days from June 4^th, the affiliate will be forgiven and may even seek licensing to market legal NJ gaming sites.

150 days is the line in the sand for affiliates; it is the point of no return as far as I can tell. If you run any sort of information, strategy or promotional website that markets overseas operators to US players, you have about five months to figure out what you’re going to do and make any necessary changes. After that point, you’re either in or out of the New Jersey market and possibly other states as time passes.

New Jersey is taking a strong stance and, in my opinion, shown that it is serious. The fact that they are giving affiliates 150 days comply makes me take this as more than just bluster. I see it as the DGE being “merciful” for now with every intent on cracking down seriously in the future. Furthermore, the bulletin itself makes the point that affiliates who continue to promote after the 150 day grace period show a “conscious refusal” to comply.

There are no Easy Outs for Affiliates

There are two pieces of text in the bulletin in particular that preemptively close any easy outs for affiliates. One is a warning that the DGE will share its determinations for suitability with any other regulatory agency that accepts affiliates in the future. So if you were hoping to just ignore the NJ market and focus your efforts on the other 49 states, you risk being left out as other states go the legalization route. If the DGE deems you unsuitable, it will pass that information along to other agencies as they come into being.

From the bulletin:

“Moreover, the Division will advise all other gaming regulatory agencies which affiliates, and their principal owners, officers and directors, have not complied with New Jersey law and identify each as unsuitable for licensure or registration in New Jersey.”

Number two: the bulletin stresses that changes in corporate structure or ownership will not be enough to avoid legal enforcement. In other words, you won’t be able to spin off a separate business entity to promote offshore brands and still keep your “main” business in good legal standing.

Here’s what the bulletin says about that:

“To be clear, the negative suitability assessment will attach to each principal owner, officer and director regardless of any changes in corporate ownership and structure.”

How this Impacts BettingUSA.com

We’re very fortunate to have taken the right approach with BettingUSA.com from the beginning. We anticipate no direct impact because we focus exclusively on 100% US-legal and licensed online betting. Never once have we recommended or taken advertising money from offshore sites that accept US residents contrary to US law.

The more time passes, the more this approach seems to pay off. Recent developments in New Jersey are just a preview things to come. Regulation in the United States is only going to become increasingly stringent. Just think about it – this is one advisory from one state’s gaming agency and it is going to have major repercussions for affiliates across the United States.

There is always a temptation to “bend the rules” a bit by recommending certain offshore sites to customers who have no legal options where they live. For example, legal online poker is only available in three states today. The overwhelming majority of our visitors come from states that have no legal option for online poker. It would be so easy and profitable for us to have just rationalized ourselves into going down that route.

I’m happy to report that we have resisted all such temptations and to this day only recommend sites that are clearly legal and licensed. It’s not the most profitable approach in the short term, but it’s the smartest way forward.

And going beyond just the monetary side of things, we can go to sleep at night and know we aren’t sending our readers to sketchy betting sites located in places like Costa Rica where there are basically zero player protections and slow payments/no-payments are a regular part of life. Whenever you see a site listed anywhere here at BettingUSA.com, you can take comfort knowing that it is a legal, regulated and reputable place to do your betting.