Revisited – the argument for affiliate licensing

Since the repeal of PASPA a little over three years ago, there have been a lot of discussions about what the US market can learn from the UK and other more mature online gambling jurisdictions especially when it comes to responsible gambling and compliance.

But one area where the US is very much ahead is the licensing of affiliates; while European jurisdictions have shied away from doing this, in the US affiliates must meet a range of requirements and prove suitability before they can market to players in each state.

This, combined with enforcement action against unlicensed affiliates in states such as New Jersey, has proved to be incredibly effective at removing bad actor affiliates and ensuring that players are not channelled towards rogue operators.

In contrast, UK-licensed operators remain locked in a battle with affiliate partners to ensure they are playing by the rules set by the Gambling Commission and other advertising watchdogs, with their licences very much on the line at all times.

For this reason, and due to the success of affiliate licensing in the US market, there is a clear need for affiliates targeting regulated markets to have to apply for and secure licences. While many professional affiliates self-regulate, clear guidelines and rules are required.

The health and happiness of players must come before anything else, and the industry needs to take collective responsibility and come together to promote responsible gambling and to also safeguard players from the rogue operators that some affiliates still choose to promote.

There are key standards all affiliates must follow

In the US, each state sets the regulations that affiliates must follow but they are broadly based around the same key standards – promoting responsible gambling, providing tools for self-exclusion and having direct links to resources for treating problem gambling.

In addition to this, I believe that affiliates must prove they have a basic level of financial stability and that those running the company have integrity and are reputable. In New Jersey, for example, you will not be awarded a licence if you have a criminal record or have violated state gambling law.

It is also important that affiliate regulations also prohibit companies from working with unlicensed operators. This is something that still happens in markets such as the UK with affiliates that promote online casinos not listed on self-exclusion register, Gamstop.

These are all perfectly reasonable requirements that any professional affiliate will be willing to meet and evidence to the regulator to gain access to the market.

Affiliate licensing will improve player protections

By licensing affiliates, they can easily be held accountable for their actions. This is simply not the case now in markets like the UK where it is really down to the operator to police and punish their affiliate partners for non-compliance.

This is a huge undertaking for each operator with most working with hundreds, if not thousands, of affiliates. This in turn leaves players vulnerable and exposed to affiliates that do not care about their wellbeing and ensuring they gamble responsibly.

When you look at the regulatory pressure being applied to operators and suppliers in European markets, it is perhaps surprising that affiliates have yet to be put under the spotlight and be held accountable for the way they are engaging with players.

I would argue that only when this does happen, and a regulatory and licensing framework is put in place for affiliates, that players will be afforded the highest level of protection when it comes to responsible gambling and being safeguarded from rogue operators.

We are calling on the entire industry, from policymakers to operators, suppliers and affiliates, to come together to regulate the industry more stringently. And a big part of this is ensuring that affiliates are meeting the same standards set for other stakeholders.

Of course, the only way to do this is to require them to apply for and secure licences in the regulated markets they target.

Paavo Salonen is a digital marketing entrepreneur on a mission to create world-class comparison websites. With more than six years of igaming experience and a decade of digital marketing and analytics experience, he is uniquely positioned to understand developments within the online gambling and affiliate marketing sectors.