Nevada to Scrutinize Affiliates in Licensing Process

Nevada will become the first jurisdiction to require online affiliates to receive a gaming license according to GamblingCompliance.
The Nevada Gaming Control Board has included “marketing affiliates” on its list of interactive service providers required to receive a license in order to profit from the state’s legal online poker framework. However, it is unclear if this licensing requirement applies to affiliates being paid on a CPA basis.
Marketing affiliates fall into the third category of Nevada’s licensing regulations as they are entities that provide key supporting services for online poker, yet are not integral to the gambling activity itself. The term also applies to any company that provides player information to a poker operator “via a database or customer list.” Anyone involved in an Internet gaming operation that is compensated based on a revenue share model will also be required to hold a license.
Licensing Loophole
It is unclear if affiliates compensated on a per-registration basis or “CPA” model fit into a description of an interactive service provider required to be licensed. Since most affiliates do not collect customer information to pass on to online gaming sites, and instead send players directly to sites via banner ads and text links, it seems possible affiliates being paid on a CPA basis may be exempt from needing a Nevada license.
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Affiliates who do meet the requirements of an interactive service provider in need of a gaming license will be asked to fork over $3,000 for a licensing investigation deposit. Additionally, their fingerprints and personal financial histories will be collected by the Nevada Gaming Control Board.
According to GamblingCompliance, no affiliate has yet stepped forward to be scrutinized by the Nevada licensing process.
Related: How becoming a corporation is a key step for affiliates wishing to become licensed in Nevada.
Countdown is On
Dominik Kofert, CEO of Poker Strategy, told GamblingCompliance, “Our current view is that it could be difficult for affiliates in general to work in a regulated U.S. market due to various regulatory hurdles which they may find difficult to clear.”
Kofert added, “Only the largest and most professionally-run affiliate businesses – it is probably fairer to call them strategic marketing partners – would have the resources and expertise required to be able to successfully enter the market as a licensed entity.”
One casino CEO expects legal online poker in Nevada to go live this fall.
South Point CEO Michael Gaughan told eGaming Review that his company is already deep into the independent testing process for its software. It is expected that South Point will be one of the operators whose licensing application will be granted next month. Gaughan believes South Point will be ready to launch its online poker platform shortly thereafter.
With legal online poker in Nevada on pace to go live within months, it seems imminent that major affiliates will soon step up to the plate to receive an interactive service provider license. While regulation will allow licensed operators to advertise via more mainstream channels, affiliates will likely remain a critical factor in helping operators build a liquid player base.