NJ's new affiliate guidelines: The affiliate view
Published 28th August 2014
The second half of 2014 is finally here, and that means New Jersey has officially had regulated online gambling for well over half a year. The market has continued to grow, and operators have settled in. However, one area of the industry which until now lacked true clarification were the rules and regulations for affiliate marketing.
On June 9th, the New Jersey DGE (Division of Gaming Enforcement) released an official press release which outlined exactly what the acceptable affiliate compensation models would be moving forward. The press release also outlined the type of licence the affiliate would need of the two available, which include a simple vendor’s registration or a full CSIE (Ancillary Casino Service Industry Enterprises).
Depending on the licence, affiliates will be able to promote New Jersey online gaming operators through a variety of ways, including pay per click, cost per click, revenue share, and flat ad sales.
The Vendor’s Permit
Under the most popular licence being sought after by New Jersey affiliates at the moment, the vendor’s licence, which is actually nothing more than a registration and permit, affiliates can promote the NJ-licensed operators on their portals.
However, they will be limited to promoting on flat ad or CPA deals. In no way can the affiliate be compensated based upon rake percentages or net losses of their referred players, which is how the traditional revenue share models currently work in the gaming affiliate space.
One interesting line of the new affiliate guidelines however is in section 4.D, which discusses compensation based upon a betting fee. It states that affiliates with vendor registration promoting on a CPA deal can be compensated for every coded user that makes a certain number of bets on a gaming site.
Time will tell, but this may prove to be a popular threshold for affiliate programmes, in lieu of awarding CPAs simply based solely on deposits or downloads. Over time, it has been proven that paying CPAs based on only registration leaves operators prone to fraud.
Applying for this permit involves affiliates submitting the VRF form to a casino that will then submit to the DGE. Affiliates must also submit a supplementary form themselves to the DGE. When you search the various sites already promoting New Jersey’s regulated operators, you can bet that most of them have vendor’s permits.
The Ancillary Licence
The next type of licence available to affiliate marketers to become eligible to work with New Jersey’s online gambling operators is the ancillary licence. Applying for receiving an ancillary licence involves a much more comprehensive process than the vendor’s permit does. However, with this licence, affiliates will be able to operate on a revenue share model, be compensated based upon net gaming revenue, and also be privy to additional player data in some instances.
Thus it gives the affiliate much broader options when working with NJ-licensed operators. Thus far, a limited number of affiliates have actually applied for an ancillary licence. The reason for this is three-fold, it’s expensive, it’s intrusive, and many affiliates prefer being compensated on the CPA model.
As mentioned, the process to receive an ancillary licence is far more comprehensive and in depth. The first step is to visit the DGE’s websites and fill out forms 30A, 31A, 32A, and 36. On these forms, affiliates must provide a wealth of information pertaining to their current business, as well as previous businesses. Affiliates will also be required to submit fingerprints and past tax returns to the DGE prior to receiving their ancillary licence.
And while the ancillary licence will give affiliates more flexibility in their compensation models, it also comes with non-refundable fee of $2,000. However, the non-refundable $2,000 fee is more than likely paltry to the legal expenses and preparation it takes to simply submit an application for an ancillary licence.
Refer A Friend & Sub Affiliate Programmes
New Jersey’s online casino and poker sites will be allowed to offer refer a friend programmes, but there is a catch. No player can be compensated more than $2,500 in calendar year through this programme.
A sub-affiliate model will also be available. In the guidelines, it states that “master affiliate” can only act up to their level of licensure. The master affiliate must also ensure that the sub-affiliates they do business with are properly licensed. This is a bit confusing, as any affiliate that goes through the process of receiving either licence would surely not need to work under a master affiliate.
Upon entering a sub-affiliate agreement, the DGE will need to receive a copy of the affiliate agreement. Should a master affiliate have an improperly licensed subaffiliate promoting their trackers, they may be subject to regulatory action or revocation of their licence.
Which affiliate programmes are Live?
Many affiliate programmes in the Garden State are live and ready to start working with affiliates. Here is the list of sites with published affiliate programmes:
While these new clarifications from the DGE are quite welcome, they have been anticipated and were not anything unexpected. Clarifications still need to be made about the “sub-affiliate” model as well as the CPA based upon betting fees.
Overall, I expect the sub-affiliate model to be popular with gambling affiliate networks such as PokerAffiliateSolutions.com, which will undoubtedly offer affiliates New Jersey trackers as soon as possible. At this point, one thing is also certain, don’t expect to see a huge influx of affiliates applying for ancillary licensure. The process is far too intrusive an expensive for the simple privilege of being able to receive traditional revenue share in only New Jersey.
Further to this, with the inability of being able to offer incentive schemes such as rakeback, the ancillary licence becomes even less attractive to affiliates. These days most affiliates actually prefer a CPA anyways.
As the market continues to grow, and as affiliate programmes in New Jersey continue evolving, there is no doubt that affiliate marketers will become a much more significant aspect of not only New Jersey’s regulated iGaming market, but also future markets.