After the Massachusetts Gaming Commission voted 5-0, operators in the Bay State can relax. The MGC lifted restrictions on affiliate agreements. After carefully considering the pros and cons to keeping the ban in place, the regulator decided that CPAs and revenue-sharing models should be allowed within its jurisdiction. This will allow for proper oversight.
Affiliates are a highly contentious matter
In February, the MGC first announced its intention of addressing revenue-sharing arrangements. The Bay State’s current regulations prohibit sports betting operators from paying third parties based upon the volume of clients, bets placed, or the outcome of specific wagers. These restrictions eliminate the traditional affiliate model that many operators rely on for promotion and marketing.
After an extensive review, the Commission decided to have talks with operators and other affected parties in order to decide its future course. The regulator said it would hold its final vote in March. The date is nearly two weeks after the official launch of online gambling in the state. This would severely impact operators that rely on affiliates for a large part of their onboarding process.
A Permanent Solution Is being sought by the Regulator
The MGC has agreed to temporarily lift revenue-sharing and CPA restrictions for the period of 14 April, according to the most recent updates. The unanimous vote agreed that the temporary measure was sufficient to allow for better gambling rules and allow an easy launch of online sports betting.
Despite the regulator’s willingness and ability to address the issue, it is unlikely that the waiver will be made permanent without additional compliance and safe gaming requirements. Although several commissioners were skeptical about the compromise, most agreed that it was right for the MGC to take the lead and establish a framework that focuses on player safety.
Someone will fill that space…and we need to regulate this.
MGC Commissioner Jordan Maynard
Already, the Commission has taken steps to curb affiliates. A new regulation places them in the same category of vendors and requires them to register with regulators. MGC may also require them to apply to vendor licenses or introduce other regulations to stop market saturation.
Affiliate marketing for operators is still a delicate topic. Cathy Judd Stein, chairperson of MGC, noted that revenue sharing was incompatible with the organization’s responsible gambling efforts. The Commission seems to agree with the practice and is making every effort to ensure that it is safe and fair. The Massachusetts regulator will face similar problems as the Massachusetts regulator with the closing of the online sports betting launch on March 10.