Details Emerge on PA Online Gaming Affiliate Licensing

New details have emerged on how the Pennsylvania Gambling Control Board (PGCB) plans to manage online gambling and sports betting affiliates. The PGCB has not confirmed these details to us personally, so keep in mind this is all subject to change. With that said, here’s what we know about being a PA affiliate.

It appears Pennsylvania will be following the New Jersey model by requiring all affiliates to be licensed before promoting licensed PA betting and gaming sites. This means anyone interested in promoting legal online casinos or sportsbooks in PA will have to receive a license from the PGCB before being eligible to receive commissions.

Note: In the context of this post, the word “affiliates” refers to those who promote gambling and sports betting sites in return for an advertising commission. The typical example of an affiliate is someone who operates a website, discusses online gaming and shares links to licensed betting sites that in turn pay the website operator a commission.

Commissions are typically paid either on a cost-per-action (CPA) or revenue share (rev share) basis. CPA commissions pay a flat fee once a certain action has taken place – such as a referral making a real money deposit. Revenue share simply pays the affiliate a percentage of each customer’s expenditures at that betting site.

You can read a much more detailed explanation of the affiliate business model here. For full disclosure, BettingUSA.com also operates as an affiliate to numerous licensed gaming sites in the USA.

How Pennsylvania Will License Online Gambling Affiliates

We have received information that two different licensing models have been outlined by PA regulators: one for affiliates who promote on a CPA basis and one for those who promote on a rev share basis.

As is the case with New Jersey, Pennsylvania will establish a simpler licensing process for those who promote on a CPA basis and a more involved process for those who promote on a rev share basis. Both applications involve a background check.

CPA Affiliate Licensing

  • Application fee: $500
  • Per individual qualifier (indirect and direct owners of 10% or more): $60
  • Certification fee: $2,500 for five years

Affiliates who wish to advertise on a CPA commission model will need to provide the PGCB with a $500 application fee and then fill out this form, which is titled Gaming Service Provider Registration Application.

This application asks for basic personal information along with information related to criminal offenses, prior gaming licenses held and a list of all websites used to advertise online gaming. This particular form does not look terribly complicated and should be manageable for most affiliates.

Fees are to be sent along with the application to:

Pennsylvania Gaming Control Board
Bureau of Licensing
303 Walnut Street
Fifth Floor, Commonwealth Tower
Harrisburg, Pennsylvania 17101

Rev Share Licensing

  • Application fee: $2,500
  • Per individual qualifier (indirect and direct owners of 10% or more): $1,000
  • Certification Fee: $5,000 for five years

Upgrading to a revenue share deal will require a much more involved rev share application. To promote PA betting sites on a rev share basis, you’ll need to pay bigger fees as noted above and fill out three forms:

  • Gaming Service Provider Certification Form (here)
  • Gaming Service Provider Certification Holding Company Form (here)
  • Personal History Disclosure Form (here)

All three of these forms are intensive as they ask prospective affiliates to provide a variety of information including name, address, social security number, past employers, criminal background history, prior gaming licenses held, drug use history, detailed financial information, business organization information, personal references and more.

These forms are all sent to the same address listed above, but affiliates should take care to read each form’s instructions carefully as they each come with different submission requirements. For example, the personal history disclosure form must be submitted as follows: the original form, one paper copy and two compact discs (CD) containing all completed forms.

It should also be noted that this post is only a preview of the affiliate licensing process, not an instruction manual. Any affiliates who are seriously interested in serving the PA market are advised to do their research and possibly get in contact with an attorney for assistance.

Is a PA Affiliate License Really Necessary?

It appears so. The information we’ve been given so far appears to follow New Jersey’s lead in requiring all affiliates to be licensed. There is no way to get around this requirement because legal betting sites in PA are not going to put their own licenses at risk just to pay commissions to unlicensed affiliates.

There is also a strong chance Pennsylvania will not license affiliates who continue to promote illegal offshore sportsbooks. As we saw in New Jersey, the gaming commission there has made it clear time and again that affiliates who wish to promote legal NJ betting sites are prohibited from also promoting offshore betting sites.

At one point, the New Jersey Division of Gaming Enforcement (NJDGE) warned affiliates that they could in fact face criminal and civil action for promoting illegal gambling sites. Pennsylvania is likely to follow New Jersey’s lead in this as well.

Additionally, New Jersey warned affiliates that it will inform other regulators of any affiliates who have failed to follow New Jersey advisories regarding the promotion of illegal betting sites. In other words, affiliates who flouted the law in New Jersey may also be shut out of Pennsylvania.

One of the PGCB’s goals will be to funnel players away from offshore betting sites and onto licensed operators that pay taxes in Pennsylvania. Thus, the PGCB has little incentive to allow affiliates to promote offshore options that will only serve to draw players away from legal gambling sites. It is for these reasons we believe Pennsylvania will follow New Jersey’s lead in managing affiliates.

Furthermore, individual gaming sites are getting on board with these requirements as well. For example, FanDuel sent out a notice in September warning daily fantasy affiliates that they will be dropped from the affiliate program if they are caught promoting offshore betting sites.

Note that this came directly from FanDuel, not from the state. So, even if Pennsylvania itself does not restrict affiliates from promoting offshore sites, individual operators may end up enforcing similar restrictions on their own. After all, legal gaming sites in the US have a financial incentive to put a crimp in their offshore competition.