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In an unprecedented move this year, New York and Massachusetts, two major Northeastern states, are reshaping the landscape of affiliate marketing in the sports betting sector. We’ll be highlighting key developments and their implications on stakeholders, most notably third-party companies and their advertising operations.
Affiliate marketing, a critical pillar in the sports betting ecosystem, is facing new boundaries set by regulatory bodies. In February, the New York State Gaming Commission (NYSGC) enacted regulations preventing third-party companies from earning revenues based on customer volume, bets made, or wager outcomes. Following suit, Massachusetts’ state gambling commission placed restrictions on affiliate marketers’ ability to enter revenue-sharing agreements with sportsbooks, though they allowed certain forms of advertising.
In response to these regulatory changes, representatives from the affiliate marketing sector voiced their concerns about the NYSGC’s regulations, fearing the impact on their compensation models. The NYSGC responded by approving modifications that, for the time being, permit affiliate marketing partners to maintain their business relations with sportsbook operators.
The NYSGC defines affiliate marketing partners as individuals or entities conducting advertising, marketing, or branding activities on behalf of a casino sports wagering licensee or a sports pool vendor with the aim of promoting or referring potential customers.
During a meeting with affiliate marketing representatives, the NYSGC introduced several modifications to the draft rules. The main requirement was for affiliate marketing partners to disclose any agreements with sports wagering licensees for promotion, client referral, or advertising. Such disclaimers must be prominently displayed or made available via an easily accessible “about” link on the page where the content is published. This approach seeks to enhance transparency and provide users with information about affiliate partnerships.
The NYSGC implemented additional changes concerning the content and practices of sports betting advertisements and promotions by affiliate marketing partners. These changes include:
All advertisements or promotions, including those by affiliate marketing partners, are barred from containing any false, deceptive, or misleading representations. This covers statements about winning odds, the number of winners, and betting terms.
Affiliate marketing partners are prohibited from suggesting or advertising sports betting as “risk-free”. Licensees cannot label betting activities as “free” or “cost-free” if bettors must risk their own money to claim winnings.
Affiliate marketing partners must not encourage bettors to “chase losses” or reinvest earnings when engaging with sports wagering licensees.
Brian O’Dwyer, Chairman of the Commission, has expressed reservations about these rules, vowing to closely monitor affiliate marketing practices over the next six to twelve months. If certain advertising trends contribute to an increase in problem gambling, O’Dwyer will suggest a review and possible revision of third-party advertising limitations.