INSIGHT
Unlawful Internet Gambling Enforcement
Act (UIGEA) of 2006. It provides: “The
Division, after careful consideration,
has made a determination that the
conduct of affiliates under UIGEA can
be distinguished from the past conduct
of online operators and payment
processors.” The Bulletin goes on to state:
“While affiliates were paid under various
compensation models for marketing to
US payers after UIGEA, 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.” Thus,
while gaming operators have often had
their post-UIGEA conduct held against
them, the DGE does not attach the same
stigma to affiliates, which the DGE views
as being at least one step removed from
actually consummating an illegal gambling
transaction. According to the DGE, this
demarcation between site operators and
affiliates is due to its determination “that
affiliates did not actually consummate
the gaming transaction or process the
payment of such activity. Therefore, the
Division has taken the position that it “will
not direct its investigation resources nor
take enforcement action” against online
gambling affiliates who promoted illegal
gaming websites post-UIGEA, “provided
they come into full compliance with New
Jersey law and the laws of other states”
within 150-days.
The DGE’s shift in attitude
The DGE’s deferred enforcement approach
signals a departure from the more
aggressive position it adopted last year in
issuing cease-and-desist letters to six U.S.
affiliates, including highly trafficked sites
such as CardsChat.com, requesting they
immediately remove any online gaming
links that are not authorized under federal
law or under the law of any state and
threatening to pursue legal action should
they not comply. The Division’s actions
compelled offshore operators, such as
the Bovada, to either stop accepting new
registrants from NJ or abandon that
market altogether. This summer’s Bulletin
represents a more moderate approach by
the Division, begging the question: “Why
has the DGE shifted its attitude toward
affiliates promoting unlicensed gaming
sites?” Perhaps the DGE’s seemingly
new-found tolerance of affiliates can
best be explained by the imperative
role affiliates play in drawing players to
online sites. Rather than alienate affiliates
entirely by immediately “laying down the
hammer” – a counterproductive move for
a market in desperate need of generating
increased online gaming revenue – the
Division realizes a gentler approach may
be necessary to attract more affiliates, and,
by extension, increased traffic, to NJ’s
online gaming market. Certainly, it’s “let
bygones be bygones” approach to affiliates
who marketed illegal gaming sites in the
U.S. post-UIGEA will attract more affiliate
marketers to the State, without fear that
their post-UIGEA activity, like that of
some site operators, will negatively impact
their suitability determinations.
With this new Bulletin, the DGE now has
the most robust policy position regarding
online gambling affiliates of the three
states (New Jersey, Nevada, and Delaware)
that have regulated online gaming within
their borders. These new policies will
force affiliate marketing sites – which
includes major informational websites,
personal blogs, and anyone else who
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