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Online gambling affiliates, some of whom had already obtained their vendor licenses in the state of New Jersey, were dealt a serious blow by that state’s Attorney General last week. But it is actually the casinos themselves that will feel the most pain.
New Jersey Assistant Attorney General George N. Rover informed those affiliates of state licensed online casinos that they would be restricted from directly targeting NJ residents or visitors unless they removed all links and banners from offshore gambling sites still conducting business in the state.
That pretty much disqualified around 80% of the online gambling affiliate pool since most were doing business with Bovada.lv (formerly Bodog.com), widely considered to have one of the highest customer conversion rates in the industry.
The Bovada.lv online poker room continued to accept players from the state of New Jersey and is one of the only sites to do so after Americas Cardroom pulled the plug last week.
While the geo-targeting of banner ads to individual US states is now possible with some website database programs like Drupal, such targeting of content is not. Many of the top affiliates have been in business for more than a decade with these so-called “prohibited” links archived on pages that can no longer be edited. Furthermore, most of the larger affiliates cater to a worldwide readership base in jurisdictions where NJ-prohibited online gambling sites are welcome to operate. A number of affiliates run interactive posting forums where members routinely promote links to unlicensed betting sites.
Affiliates who fail to comply with the Attorney General's mandate would be subject to a fine up to $75,000. Few, if any, were willing to take a chance especially considering they have zero control over how their ad partners elect to run their own business.
Nor do these affiliates have much of a choice.
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Licensed casinos in New Jersey aren’t taking any chances either with a handful opting to stop partnering with affiliates until such a time in which the New Jersey AG’s office changes its policy.
A smart and almost necessary move perhaps. Those operators we spoke to all described this stance as "overreaching".
One casino operator tells Gambling911.com: “This came completely out of left field. We were not even notified about this policy.”
There were two types of affiliate models initially granted access to the New Jersey online gambling market. One is a straight advertising deal similar to those entered into with offline media outlets. The second is a revenue sharing deal that required a $2000 fee upfront. The vast majority of online gambling affiliates operate using the revenue-sharing model. Gambling911.com and a handful of other sites in the industry are an exception to that rule.
Without access to affliates, New Jersey's licensed online casino operators will likely be shut out of the lucrative Web marketing sector that, to some degree, single-handedly built the offshore and European Internet gambling sector, thus impeding growth.
- Ace King, Gambling911.com
