Would you promote a Nevada online gaming site accepting only local players?

[MichaelCorfman]

It looks like online poker will be offered by licensed Nevada operators, who will accept only individuals connected from within the state boundaries, in the not-too-distant future. It is not yet known if or when any of the early operators will have affiliate programs in place, but the proposed regulations allow operators to have affiliate programs.

Nevada regulations appear to allow individuals located anywhere to become licensed as an affiliate, and partnerships or corporations (or subsidiaries) located in Nevada, or registered as foreign corporations in Nevada, to become licensed affiliates. To become a licensed affiliate under the proposed Nevada regulations, a combined one-time application and registration fee of $3,000 or more would be payable to the Nevada Gaming Control Board along with the required application information, which includes fingerprints. Only licensed affiliates would be able to earn a share of revenue for players they refer. But I believe anyone could be compensated as an advertiser (which I expect would mean CPM or CPC compensation, but not revenue-share). CPA based compensation might also be grouped with revenue-share compensation.

In this context, do you think you would promote licensed Nevada gaming operations? If you did, do you believe you would do it only as an advertiser paid on a CPM or CPC basis? Or would you become a licensed affiliate in order to receive revenue-share based compensation?

Be sure to share your reasons and thought process.

Michael

[p.arena]

$3,000 each for the license?

It seems pretty unfair for affiliates to only be able to promote to 1 state and have to pay that much money up front for the right to do so.

[baldidiot]

There's no way I'm moving to Nevada and getting background checked just to promote poker in the US... I don't think they've grasped the concept of online marketing, and I view either a change in their stance coming at some point or a severe lack of web coverage of the new regulated sites.

Thing is, it's not like all the people who aren't licenced are going to turn around and say 'fair enough, I'll turn my websites off then and let you have the top spots in the SERPs'. So the large majority of Nevada gaming traffic will either have to go the CPM/CPC route, or will do as it is now and just send to non-regulated sites - which is good news for Carbon, Club World and Bovada...

[TravG]

I am not really sure. The 3K could turn out to be a huge advantage if your one of the first to start promoting them. If the sites are successful and your first to market it probably would be very lucrative. 3K really isnt that much and it could have a huge upside.

[mojo]

Nevada regulations appear to allow individuals located anywhere to become licensed as an affiliate, and partnerships or corporations (or subsidiaries) located in Nevada, or registered as foreign corporations in Nevada, to become licensed affiliates.

If I don't have to reside in Nevada then yes, I would. The 3k is a business cost and a write off, though if all states do this that could add up quite a bit.

I have never been fingerprinted and don't want to be so I would have to think about that.

For me, it really depends on how the other states handle it and the country as a whole with Nevada as the testing ground. I feel it will help to get in on the ground floor as well and make any application to other states easier.

[FictionNet]

Michael's post indicates that residence in Nevada would not be compulsory.

[TheGooner]

Michael's reading of the regulations are widely varying from other interpretations I've come across.

1) NO I will not submit to fingerprinting or registration.
2) NO I will not pay a $3K fee to a Nevada organisation in order to accept advertising on my website half a world away.

The seems to be a complete misunderstanding of business on the internet and the power and reach of Nevada authorities outside of their state.

If may not be rev-share or CPA, but be sure I will be making money from any organisation that wishes to get exposure on our websites - and it's none of the states business as to how that reward is structured.

[promoguide]

I agree with TheGooner. Doesn't limiting promotion to Nevada only players kinda defeat the purpose of online marketing?

[MichaelCorfman]

The seems to be a complete misunderstanding of business on the internet and the power and reach of Nevada authorities outside of their state.

Regulators within the United States have a pretty simple perspective: "If you, as an operator, want to legally offer online gambling services to those within the borders of the jurisdiction we regulate, you have to be licensed and abide by the regulations we stipulate. If you are a licensed operator, then you may only deal with third parties in accordance with the terms of the regulations we promulgate." In the case of the Nevada, draft regulations envision the following requirement: "Any third parties who help market your business, and who are compensated based on a share of gaming revenue, must acquire a class 3 gaming license for that purpose. If you work with any third-party affiliate compensated based on a share of gaming revenue who has not been licensed by us, you will not be in compliance with our licensing requirements, and you may be fined or your gaming license may be revoked in accordance with our regulations."

So, I believe that Nevada regulators do have a good grasp of their authority and how to use that authority to require third parties outside of the state to submit to their regulations if those third parties wish to do business with the operators they regulate. However, the proposed regulations clearly introduce a real regulatory hurdle, and I believe will limit the viability of affiliate relations in the small market to be regulated (poker players playing at licensed poker sites operating exclusively within the state of Nevada). So, from that perspective, I have to agree with you that the proposed regulations will significantly stifle the activity of affiliates in the state. And the fact that the licensed operations will only be for those within the border of Nevada will create a very difficult economic environment. But, unfortunately, Nevada regulators do not currently have any authority to authorize or regulate online gaming except within the border of the state.

If may not be rev-share or CPA, but be sure I will be making money from any organisation that wishes to get exposure on our websites - and it's none of the states business as to how that reward is structured.

If a regulated operator wants to keep their license, then they will only be able to do business with you if the business relationship they establish with you complies with the regulations to which they are subject. So, there could easily by a regulated operator who wanted to do business with you, but would be unable to do so unless you came to terms with the operator that complied with the regulations to which they were subject. Unfortunately, that makes your relationship with the operator the business of the state, as distasteful as that might be.

I agree with TheGooner. Doesn't limiting promotion to Nevada only players kinda defeat the purpose of online marketing?

Well, yes. But if we want to talk about the online world from that perspective, the whole concept of regulators requiring operators to limit the players they accept to those within a specific geographic marketplace flies in the face of a free and open market on the Internet.

Unfortunately, U.S regulators have a long history of special regulations applying to casino hosts (those who arrange junkets, or trips to casinos, and earn a revenue share off of the players they bring in), and the regulators in the U.S. currently seem intent on regulating affiliates the same way they regulate junket operators.

Michael