New York May Back Off Third-Party Ban

This year, a pair of prominent Northeastern states have considered new regulations on affiliate marketing in sports betting, including the possibility of banning sports wagering advertising by certain third-party companies.

In February, the New York State Gaming Commission (NYSGC) approved proposed rules that would prohibit compensation of third parties based on the volume of customers, bets placed, or the outcome of the wagers. In Massachusetts, the state gaming commission prohibited affiliate marketers from entering into revenue-sharing deals with sportsbooks but allowed other forms of advertising on a limited basis.

Since then, representatives of affiliate marketers met with the NYSGC to state their case for why such limitations would effectively prohibit their businesses from being compensated. Last week, the NYSGC approved a series of amendments allowing affiliate marketing partners to conduct business with sportsbook operators for the time being.

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The commission defines an affiliate marketing partner as an “entity or person who promotes, refers potential customers to, or conducts advertising, marketing or branding on behalf of, or to the benefit of, a casino sports wagering licensee or sports pool vendor according to an agreement with such licensee or vendor.”

Ahead of the meeting, the NYSGC added a series of amendments to the original version of the proposed rules. One rule will require any affiliate marketing partner to disclose whether it has agreed to promote, refer customers, or advertise on behalf of a sports wagering licensee. Under the rule, the affiliates must display the disclosures in a “reasonably prominent manner” and/or in an “about” link accessible from the page where the editorial content appears.

Other amendments approved include no sports betting advertisements or promotions, including any material published or disseminated by an affiliate marketing partner, which should contain false, deceptive, or misleading statements. These include statements on the chances of winning, the number of winners, and the wagering conditions.

A sports wagering licensee through an affiliate marketing partner should not “imply or promote” sports betting as “free of risk.” Licensees should not describe betting activities as “free” or “cost-free” if the bettor needs to risk any money to withdraw winnings from the bet.

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