Affiliate marketing in grey territories: do or don’t?

Grey market advertising has long been a topic of debate in the industry. On one hand, some affiliates see it as an opportunity to reach untapped audiences and drive revenue where fully regulated marketing may be limited. On the other hand, the risks associated with operating in grey markets are real and cannot be ignored. Operators and suppliers are increasingly scrutinising the channels, targets and methods through which their products are promoted, and engaging in non-conformist advertising can lead to serious consequences.

The question for affiliates becomes whether the potential gains outweigh the possible fallout: will their decisions result in a minor warning, a “slap on the wrist” or could they lead to the loss of partnerships, exclusion from affiliate programmes or even legal and financial penalties in certain jurisdictions?

Think twice before entering the grey

Beyond immediate gains, there are longer-term implications for reputation and trust within the industry. Affiliates known for grey territory marketing or unethical practices may find it harder to secure new partnerships or maintain relationships with established operators, potentially limiting future growth and stunting the prospects of a reasonable exit. Ultimately, the debate is not just about risk versus reward, but also about sustainability and credibility. Affiliates must weigh short-term gains against the potential damage to their professional standing, operational stability and ability to operate in fully regulated markets in the future.

The reality is that as regulated markets continue to evolve, the rules and oversight surrounding what affiliates can and cannot do are becoming increasingly strict and uniform. Scrutiny is being applied to the location of the target customer, how personal data was acquired and the context in which the operator or brand was promoted.

So what actually defines a “grey market”? This can vary, but it would be territories where online gambling is not strictly legal or illegal and therefore has no clear or authorised guidelines for consumer protection. If remote gambling supplies are not addressed, then it is likely that marketing and advertising provisions will carry the same level of ambiguity. If a regulator for online gambling exists, it can and often is inconsistent or reactive, meaning that it is often too tempting for affiliates to push the parameters. The rules related to privacy and the context of advertising material are also key.

Liability without protection

It is important to note that affiliates are not generally covered by an operator’s or supplier’s licence. Those third parties, however, are exposed to risks when an affiliate goes rogue. There are two consequences. First, as mentioned above, they may distance the affiliate, resulting in the termination of contracts. Second, any breach of local advertising or regulatory requirements could directly lead to serious repercussions to the affiliate company, including financial penalties or criminal liability. That said, there is often no regulator in the scope to resolve the issue. 

It is worth considering a precedent on the issue:

Kindred Group's subsidiary, Trannel International, had a long-running legal dispute with the Norwegian Gambling Authority (Lotteritilsynet) over operating without a local licence, which resulted in a threat of a daily coercive fine of approximately NOK1.2 million (around €114,000/$117,000 at the time). As Norway operates a strict gambling monopoly, allowing only state-owned entities (Norsk Tipping and Norsk Rikstoto) to offer online gambling, the Norwegian regulator ordered Kindred to stop offering its services to Norwegian residents through brands like Unibet, Mariacasino, Storspiller and Bingo.com, as it considered them illegal under Norwegian law. In court, it was argued that in 2022, Kindred had converted website pages to English, removed Norwegian flags and references to the Norwegian krone and stopped advertising on Norwegian television channels.

The company also stated it told its affiliates not to engage in direct marketing towards Norwegian residents. In December 2024, the authority said Tiergarten Marketing, the company behind the schpell.com affiliate site, had lost its appeal in court. It was then ensured that the business would be liable for daily fines if it did not comply with the guidelines set. This shows that regulators will still pursue affiliates if illegal behaviour continues, meaning they cannot absolve themselves under the auspices of a third party operator.

Building a sustainable affiliate business

It is key for affiliates to create a checklist to make sure they are covered from a regulatory and legal perspective. Not relying on operator approval alone should be the first step, followed by taking proper legal advice and ensuring all compliance checks and market approvals are logged, so a clear paper trail exists if cases are investigated further down the line. In short, what matters is not only what has been controlled or monitored contractually with the service buyers, but also the due diligence carried out by the affiliate.  

Unless carefully curated, any business plan can create significant risks to future licensing and expansion. Where affiliates seek to obtain a licence in a jurisdiction, enter into regulated media partnerships or engage in direct commercial agreements with Tier 1 operators, any history of grey-market or unethical promotion may lead to applications being delayed, rejected or subjected to enhanced due diligence (EDD). Such activity can also undermine an affiliate’s reputation, credibility and overall suitability assessment. Taken together, these outcomes present material and detrimental consequences, particularly where time, resources and compliance budgets are constrained.

In conclusion, jurisdictions such as the UK, Canada, the EU and the US operate under highly developed regulatory frameworks that actively restrict and enforce against grey-market and unethical gambling promotion. Affiliates that promote unlicensed or ambiguously regulated operators risk regulatory scrutiny, enforcement action and reputational harm, particularly when seeking to operate, partner or obtain approval within these markets. In light of these risks, grey-market promotion and unethical practices represent a material compliance and suitability issue and are unlikely to align with regulatory expectations or long-term business sustainability.