Massachusetts Gaming Commission Agrees on Sports Betting Partner Rules

The Massachusetts Gaming Commission (MGC) has established its rules for affiliate marketing for the state’s licensed sports betting operators.

At its meeting in September 2022, the governing body of gaming in Massachusetts put in place limits on how online sportsbooks and affiliate marketing sites collaborate to promote internet sports gambling activities. (Image: Axios Boston)

Affiliate marketing is a significant element in the legal US sports betting industry, with being a premier player. Connected to sports betting, affiliate marketing involves how an online sportsbook registers a new client.

Sportsbooks compete in a crowded marketplace in the more than 30 states where sports betting is currently legal. Operators expend a great deal of money in advertising their operations and attempt to bring in new bettors to their platforms with incentives such as sign-up deposit bonuses and bonus bets.

Many media websites covering the legal sports betting industry get commissions when a reader clicks through an advertisement or link to an online sportsbook and registers with the platform. Generally, media outlets are remunerated for directing the player to the sportsbook through either a revenue-sharing agreement or a cost-per-acquisition (CPA).

Online sports betting in Massachusetts started earlier this month with six platforms — DraftKings, FanDuel, BetMGM, WynnBet, Barstool Sportsbook, and Caesars Sportsbook. Massachusetts was the 24th state in the US to initiate legal online sportsbook services.

Restricting Revenue-Sharing

At its assembly on Monday, the MGC concluded its affiliate marketing regulations. With sports betting advertising the focal point of recent examination across the nation, the gaming regulators endeavored to implement rules that better protect consumers from marketing tactics the state finds dubious.

The five-member MGC, on the advice of its staff, declared Monday that Massachusetts sportsbooks will be barred from entering into revenue-sharing arrangements with affiliate marketers. Regularly seen in many other legal sports betting states, revenue-sharing agreements deal with a sportsbook sharing a portion of the income generated by a player who signed up for the online sportsbook or iGaming site with the website where the player’s registration began.

Revenue-sharing pacts provide the affiliate with a share of the customer’s losses in perpetuity. However, the MGC believes these joint ventures between the gaming operator and marketer are not in the best interest of customers.

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, in exchange for a percentage of net sports wagering revenue earned from users that the third party directs or causes to be directed to the Operator,” the MGC’s updated rules on third parties now reads.

In any case, the MGC chose to permit affiliates to receive a CPA fee per new customer who creates an online sports betting account. The fee, however, must be a one-time payment and not contingent on the amount wagered by the customer.

MGC Assesses Fine

In related regulatory news in Massachusetts, the MGC declared a $20,000 fine imposed on Memoire nightclub at Wynn Resorts’ Encore Boston Harbor. The state mentioned that the financial penalty was for the nightclub’s failure to abide by alcohol service regulations.

Memoire accepted the civil penalty after admitting that one of its employees in September 2022 committed two infractions. The state did not elaborate on the matter but stated that the nightclub “took appropriate disciplinary action” against the staff member.

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