The recently adopted Nevada online poker regulations will require that persons who seek to provide Affiliate marketing services to Nevada licensees will need to first be licensed.

I will be addressing the topic of Affiliate Licensing for the Nevada/US market in a presentation to affiliates attending the London Affiliates Conference, on January 27, 2012.

I would be interested in hearing from affiliates what sort of business issues they would forsee arising in offering services to prospective US operators. I want to address such concerns at the London Conference and get a discussion within the affiliate industry re what the regulatory landscape will or may look like as the US market is re-entered for online poker.

For example, business issues which might be impacted as regulations develop may include permitted affiliate compensation models, maximizing value from databases, acquisition and retention incentives (rakeback & others), cross-selling opportunities, the need/appetite of prospective operators for affiliate services.

I would also like to hear about any discussions already underway with B&M marketing efforts for poker online. (Has the US B&M industry has advanced online much, and to what degree, since the days of "Online sends players, WSOP gets players" ?)

Finally, what experiences have you had with licensing/regulation in other markets than the US ?

I don't think affiliate licensing exists anywhere else in the world?

Seems like a bit of a new thing and I am not too sure it makes sense. User's will not be depositing, wagering funds or doing anything that would typically require a licence (for anything, anywhere else in the world) on the affiliate's site.

The businesses the affiliate will be driving traffic to, will be licensed.

Affiliates have brought a lot of innovative ideas and overall have contributed to the poker world. Without the affiliate model communities such as this one probably wouldn't be viable and the standard of content including; strategy articles, coaching, entertainment videos would diminish.

Affiliation is the one area of the industry where businesses can run with ideas and newcomer's can enter and attempt to innovate without red tape. Regulation will reduce the volume of affiliates and will completely lock up the industry to any newcomers.

Of course the established affiliates will have the time and resources to apply for a licence which will result in less competition and choice for the consumer.


Jamie

Possibly but it may also provide recourse for the players in situations where the affiliate defaults on its payments/commitments as in the case of another thread in this forum. Affiliates will think twice about that sort of shenanigans if it means ending up in a US court!

If the poker room in question was regulated properly it would make this kind of thing a lot harder anyway. The room should be responsible for player rewards and how they are taken care of.

An affiliate's job is to drive traffic to the room and help retain players.

A regulated room in the US market would not tolerate affiliates making player payments of any kind (not many poker rooms do) and if the situation outlined above was to occur the room would be sanctioned.

Both poker room regulation and affiliate regulation would aim to do the same thing so why do we need them both?


Jamie

I don't know that affiliates are particularly licensed any where else either, asdie from whatever general business license any business might need.

I would like to hear if there is a licensing in any EU jurisidiction for affiliate markteting as such, whether for gambling or other lines of commerce.

The whether or not affiliates "should" be licensed ship has sailed, at least in Nevada. One reason this topic is timely is that, as Nevada goes, so goes the US most likely.

So far, the requirement is for licensing, not specific regulations. (In my personal view, the less burdensome the process or regulation the better for the businesses' ability to repsond to consumer and market demands.)

There are consumer protections in the Nevada Gamong regulations generally. More basic issues however, which MAY be the subject of regulatory discussions, are whether or not rakeback would even be allowed generally. There is a hisotry of allowing porps/shills in B&M poker games. Also there is a carvepout written already for "celebrity" players to be paid, thanks to some adept lobbying.)

Jamie,

There is essentially a clean slate to be written on here with respect to online gaming. I cannot say what a regulated online site in the US would or would not tolerate in structuring any sort of regulatory permitted rakeback.

The B&M industry here understands the function of affiliates to drive traffic and retain players. Some prospective sites may not feel they need that help, if they are permitted to mine their accumulated databases, hire internal expertise, and freely market within the US, in "legal" jurisidictions themselves. Other prospective sites might understand that, lacking a competitive marketing foothold themselves, they may really benefit from third party affiliate marketing.

In order to do affiliate marketing business with this second sort of Nevadaonline operator, who will want to do business with you, an affiliate will be required to operate under a license from Nevada.

What other gaming regulations may affect affiliates is a discussion point, but the Nevada licensing need is clear. There are betting propositions on what any further regulation will follow or whether a similar licensing will pop up in other US States or federally. My current view is there will be regulatory activity on both counts, and the affiliate community can help in shaping the outcome somewhat.

I will try and cover as many salient points as possible for discussion at the presentation at the LAC on the 27th. (If possible, and enough topics of interest are raised here, I will provide related materials.)

Will an affiliate need a specific Nevada gaming affiliation licence or will a standard gaming licence be required?

How much would acquiring the licence typically cost?

If you can't answer these questions here, will they be addressed at the LAC? If so I'll make sure to come along.

Jamie

I will cover these topics more fully at the LAC. However, the quick answer is that, in order to provide affiliate marketing services to a Nevada online poker licensee, an affiliate will have to obtain a license from the State of Nevada. (It is a new category of Nevada gaming license.)

The actual Gaming application fee will be $150 payable to the NGC, plus a $2,500 deposit for "investigation" costs.

The application process will be pretty straight forward, I'll provide the regs at the LAC session. I do expect to talk with the gaming regulatory staff again before the Conference and will relay what other materials/information I can as well.

What I personally ope to learn from attendees at the session are the concerns of affiliates and perhaps explore/develop cost effective ways to satisfy both those concerns and those of the Gaming regulators going forward. The regulatory process in the re-emerging US market(s), at any level, seems likely to look to Nevada, as the first mover and experienced gaming regulator. That was the gist of the proposed Barton Bill and is clearly the intention of Nevada's influential political representation.

The LAC seems a timely gathering to address this topic. I will be at the conference on the 26-27th and in London the prior few days (for ICE).

It would seem likely that anyone wanting to be an affiliate for the Nevada poker rooms will need some sort of business presence in Nevada. This will be an interesting few months. Office space and virtual offices are very cheap here for people needing to set something up.

Hi Gzesh,

What time will your address be and where exactly at the LAC?

Jamie

It will be listed in the program; the time and location have been confirmed as:

Confirmation of Session
• Time: 15:45 – 16:30 on Day 1, Friday 27th January, Conference Room 1
• Session: Licensing of Poker Affiliates Under New Nevada Regulations

If the layout is again like the prior LAC I attended at Old Billingsgate, the two Conference rooms are on the second level.

I would prefer to speak for only 25 minutes to allow discussion and Q&A, (if needed, I can go longer as there are a number of unresolved areas under the topic.) If you would like anything of concern specifically addressed, let me know so I can look into it beyond the black letter licensing regulations.

Could you please report back after the conference? This is all very helpful information for new and existing affiliates.

Will do =)

I will be doing a brief article after my presentation at the conference.

Regulation of the marketing affiliate area is going to land somewhere along a learning curve. There are a number of issues that need to be fleshed out. It is in the interests of affiliates that the Nevada regulators know "how it works best" and tailor regulations to that end, to the extent possible within the traditional regulatory framework and concerns.

(For example, drawing analogies to traditional permitted marketing channels can be useful in such discussions, but there will be differences from the way re-emerging market relationships can be structured compared to the unregulated affiliate industry. The good news is that there should be a pretty close proxy available to "how it works best" that is feasible, at least in this first regulated market.)

I'll update folks at the Conference next week and include any new information in an article in the Affiliates Conference magazine, which should be available online at some point.