The email states:
“Please be advised that FanDuel considers the promotion of offshore gambling websites as promotion of illegal activities. As such, FanDuel will take steps to monitor your site to ensure it complies with FanDuel’s terms and conditions, and will take appropriate actions including, but not limited to, terminating your participation in the FanDuel Affiliate Program if you fail to comply with the terms and conditions.
By continuing to participate in the FanDuel Affiliate Program, you represent and warrant that your site does not currently promote any illegal activities, including, but not limited to, offshore gambling.”
There has been a notable uptick in marketing spend by offshore sportsbooks in the months since the federal sports betting ban was struck down. Offshore sites have commonly been purchasing ads or sponsorships at US-facing betting and fantasy sports content sites, as well as Twitter mentions and other social media promotion.
NJ is proactive in preventing competition from offshore operators
Now that FanDuel is legally running sports betting operations in New Jersey, it is bound by the NJ Division of Gaming Enforcement (DGE) regulations.
Right from the get-go, the DGE has been proactive in reducing the opportunity for black market or gray market sites to compete with New Jersey’s licensed providers.
In May 2014, it sent cease and desist letters to a number of affiliate sites warning them not to promote illegal offshore gambling sites. Affiliates with New Jersey licensees are required to be licensed by the DGE.
The DGE recognized that part of the deal with its licensees is that they pay license fees and taxes for access to the market and that in exchange, the DGE takes action to prevent competition from unlicensed sites.
Allied with this is cutting off the offshore sites from the advertising that is their lifeblood. But there is also a broader issue of disassociating the regulated sites from the unlicensed sites in consumer perception.
DGE spokeswomen Kerry Langan told Online Poker Report:
“We believe this may either taint legitimate sites by associating them with the illegal ones, and conversely may lend the appearance that these illegal sites are affiliated with authorized sites.”
In July 2015, the DGE followed up with an advisory bulletin explaining in detail what it defined as illegal sites and what steps it expected affiliates to take in order to continue to be allowed to promote licensed sites in New Jersey.
- “Completely cease promoting or marketing, directly or indirectly, any illegal online gaming sites accepting wagers from players in the United States.”
- Submit a notarized certification from the CEO or COO to the DGE “attesting to that fact.”
FanDuel needs to be seen to comply
The warning to affiliates is an effective way for FanDuel to be seen to comply.
It also achieves two mutually supporting objectives:
- Helping to reduce competition
- Channeling more traffic from the black market to the regulated market.
FanDuel may not just be relying on goodwill for the enforcement of its policy.
The war against unlicensed gambling operators has become much more important now that the US sports betting market is expanding to a large number of states.
This expansion creates a market opportunity for companies that can create tools that help operators and regulators to tackle the threat.
Rightlander and GiG offer compliance tools
GVC and the Kindred Group, both of which are active in New Jersey, are signed up with Rightlander, to use its affiliate compliance software. Rightlander also boasts contracts with Bet365 and most recently with the Gibraltar-based Mansion Group.
Rightlander’s solution scans affiliate websites, monitoring all links to the customer websites and mentions of the company’s brands. It also searches for specific events or conditions as defined by the operator.
Rightlander founder, Ian Sims, said:
“Our competitively priced product does the heavy lifting for operators and provides them with a clear view of the affiliates linking to their brands across geographies and whether they are doing so in a responsible manner.”
Affiliates can self-police using the Rightlander software for free.
Gaming Innovation Group (GiG) announced in its 2018 Q2 report that it was launching a similar product in September.
GiG Comply is a “compliance tool that monitors advertising partners towards regulatory bodies.”
GiG said that it expected the first two customers to come on board in September.
A close reading of FanDuel’s warning email can now suggest that the phrase “FanDuel will take steps to monitor your site,” is not just empty rhetoric.
It is not known whether FanDuel is using either of the tools mentioned above, but the compliance technology now means that operators can indeed monitor their affiliate sites.
The UIGEA made it extremely difficult for black market operators to accept deposits and process withdrawals. Active regulators such as the DGE have made some markets too hot for the black market and now new compliance technology is attacking them where it really hurts, in their ability to attract customers.