iGB North America magazine IGBNA Aug/Sep | Page 13

Law and Legislation

of a license or registration, and/or the
imposition of a monetary penalty are also
potential consequences for such conduct.”
Affiliates not engaged in the promotion of
illegal sites are not subject to the compliance
conditions – meaning, any affiliates who
file certifications at the end of the 150-day
window could arguably be assumed to have
promoted illegal sites (although compliance
appears to absolve them of any past conduct).

Affiliates and post-UIGEA conduct
The Bulletin also devotes a section to
gambling affiliates who promoted illegal
gaming websites after the passage of the
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 incl Ց