MGC Delays Sports Wagering Affiliate Marketing Decision Until March 2

Following a Massachusetts Gaming Commission (MGC) meeting on Feb. 27 to discuss the role that marketing and promotions will play in the Massachusetts sports betting launch, the MGC reconvened on March 1 to discuss the issue further. After much deliberation, the vote on whether to waive the affiliate marketing restrictions was tabled to March 2.

Massachusetts Affiliate Marketing Background

Currently, Massachusetts gaming regulations do not allow for affiliate marketing. Per Regulation 205 CMR 256, subsection 256.01 (3): “No sports wagering operator may enter into an agreement with a third party to conduct advertising, marketing, or branding on behalf of, or to the benefit of, the licensee when compensation is dependent on, or related to, the volume of patrons or wagers placed, or the outcome of wagers.”

This includes affiliate marketers that use a Cost Per Action (CPA) model as well as a revenue share model. The difference between the two is that CPA’s pay the affiliate a certain amount for each registered customer that comes from their website. This amount is the same regardless of how much that customer wagers with the sportsbook. An affiliate that conducts a revenue share model essentially gets a percentage of the amount that that customer wagers in the future. In essence, the more their customer bets, the more the affiliate gets paid.

At the Feb. 27 meeting, several industry executives spoke out in favor of affiliate marketing, citing the rise of offshore books as a reason to keep affiliate marketers in search engines.

March 1 Discussion

After discussions on March 1, the MGC seems to be leaning towards waiving these restrictions, perhaps with a caveat.

While the commission did not seem wary of waiving the CPA-related restriction, they were more hesitant to waive the restrictions for those that conduct revenue-share marketing. Both Commissioner Eileen O’Brien and chair Cathy Judd-Stein did not favor the revenue sharing model and requested more research be done on the model. They both expressed their concerns that the model contradicts their responsible gambling policies.

“The inherent motive to get people to join and earn (under) rev sharing is counteractive to our responsible gaming efforts,” Stein said in the meeting.

Different ideas circulated throughout the meeting, including requiring a higher degree of licensure if an affiliate wants to use the revenue share model in addition to the CPA model. The MGC also floated the idea of having a short-term waiver on such restrictions until at least April 14, at which point the MGC could set more concrete parameters.

March 2 Vote Coming

Nonetheless, nothing was finalized in the March 1 meeting despite so much deliberation. Whether CPA-driven affiliates, revenue sharing-driven affiliates, both or neither will be allowed, remains to be determined. Per the agenda, the meeting to vote on this is scheduled for 1 p.m. on March 2.