The Massachusetts Gaming Commission will vote Thursday whether to temporarily waive restrictions on affiliate marketers in the sports betting industry. Such a decision would allow third-party affiliates to enter into either Cost Per Acquisition (CPA) or revenue share agreements with sports betting operators.
There didn’t appear to be any hesitation to waive restrictions or allow CPA agreements during Wednesday’s MGC meeting. However, there was disagreement on whether MA should allow CPA and revenue share agreements.
Some commissioners had concerns whether revenue share agreements — which pay affiliates a percentage of total money wagered by a customer they deliver to an operator — are counterintuitive for responsible gaming.
If the MGC does waive the restrictions, sports betting operators would be allowed to make deals with affiliate marketers ahead of the March 10 Massachusetts mobile sports betting launch.
The MGC floated the idea that such a removal of a ban on affiliates would be in place until at least April 14. At that time, it’s possible the MGC would have more concrete parameters for affiliates and could vote on permanent rules.
At issue is the ability of sportsbooks like DraftKings and FanDuel to partner with affiliate marketers in the sports betting industry. Those affiliates would earn revenue from acquiring customers for the sportsbooks, either via a “bounty” under a CPA model, or through revenue sharing.
Some commissioners fear threats to responsible gaming efforts
In many states with legal online sports betting, affiliates are an important component of the industry, finding and delivering customers to sports betting operators, while also ensuring a consistent, legal message and promoting responsible gaming.
Commissioner Eileen O’Brien and chair Cathy Judd-Stein both expressed their discomfort with the revenue sharing model, at least until the commission hears more on the matter, especially regarding its impact on responsible gaming. At the Feb. 27 meeting, the MGC discussed the possibility that affiliates would be required to have responsible gaming messaging or a badge on their websites.
Stein discussed potential “guard rails” for the affiliates and sportsbook agreements. The most significant guard rail would be requiring a higher degree of licensure if an affiliate wants to be able to enter into revenue share agreements in addition to CPA deals.
Looking to other states
The Massachusetts Gaming Commission has illustrated a sensitivity to the saturation of marketing in the state when online sports betting launches on March 10. The language drafted by Massachusetts is modeled after Illinois and Colorado, which do not allow affiliate marketing partnerships by sports betting operators, or limit them.
“Are we attracting the sports bettors we don’t want?” Stein asked. “(Bettors) who are susceptible to gambling problems.”
Commissioner Brad Hill explained that he felt the MGC is “protecting our most vulnerable constituents with our current regulations.”
“The inherent motive to get people to join and earn (under) rev sharing is counteractive to our responsible gaming efforts,” Stein said.
The MGC has received applications from 75-80 marketing affiliates.