A pair of prominent Northeastern states this year have considered new regulations on affiliate marketing in sports betting, including the possibility of banning sports wagering advertising by certain third-party companies.
In February, the New York State Gaming Commission (NYSGC) approved proposed rules that would prohibit compensation of third parties based on the volume of customers, bets placed, or the outcome of the wagers. In Massachusetts, the state gaming commission prohibited affiliate marketers from entering into revenue-sharing deals with sportsbooks, but allowed other forms of advertising on a limited basis.
Since then, representatives of the affiliate marketers met with the NYSGC to state their case for why such limitations would effectively prohibit their businesses from being compensated. On Monday, the NYSGC approved a series of amendments that will allow affiliate marketing partners to conduct business with sportsbook operators for the time being.
The NYSGC also approved a set of proposed amendments to rules related to advertising by third-party sports betting advertisers, also known as affiliate marketers. The NYSGC will allow compensation for third-party marketers on a limited basis. (cont.)
— Matt Rybaltowski (@MattRybaltowski) May 22, 2023
The commission defines an affiliate marketing partner as an “entity or person who promotes, refers potential customers to, or conducts advertising, marketing or branding on behalf of, or to the benefit of, a casino sports wagering licensee or sports pool vendor pursuant to an agreement with such licensee or vendor.” (Sports Handle parent company Better Collective is one of the nation’s top affiliate marketing partners in the U.S. sports betting space.)
Approved with reservations
Ahead of the meeting, the NYSGC added a series of amendments to the original version of the proposed rules. One rule will require any affiliate marketing partner to disclose whether it has agreed to promote, refer customers, or conduct advertising on behalf of a sports wagering licensee. Under the rule, the affiliates will be required to display the disclosures in a “reasonably prominent manner,” and/or in an “about” link that is accessible from the page where the editorial content appears.
Other amendments approved on Monday:
- No sports betting advertisements or promotions including any material published or disseminated by an affiliate marketing partner, should contain false, deceptive, or misleading statements. These include statements on the chances of winning, the number of winners, and the conditions of wagering.
- A sports wagering licensee through an affiliate marketing partner should not “imply or promote” sports betting as “free of risk.” Licensees should not describe betting activities as “free” or “cost free” if the bettor needs to risk any of his or her own money to withdraw winnings from the bet.
- A sports wagering licensee through an affiliate marketing partner should not encourage bettors to “chase losses” or re-invest winnings.
Commission Chairman Brian O’Dwyer expressed some reservation about approving the proposed rules. O’Dwyer said that he will closely monitor affiliate marketing in the space over the next six to 12 months, and if a spike in problem gambling appears to result from the advertising patterns, he will advise the staff to revisit rulemaking prohibitions on third-party advertising.
No update on Pletcher appeal
Also on Monday, the commission set new standards for the timing of disciplinary hearings related to split samples in horse racing positive drug tests.
The procedural change occurred in light of a pending case involving Forte trainer Todd Pletcher, an eight-time Eclipse Award winner for national trainer of the year. On May 10, the NYSGC suspended Pletcher for 10 days and issued a $1,000 fine in connection with Forte’s positive test in last September’s Grade I Hopeful Stakes. Forte tested positive for meloxicam, a nonsteroidal anti-inflammatory medication, after winning the Hopeful at Saratoga Race Course.
At Monday’s meeting, NYSGC officials criticized Pletcher’s attorneys for their lack of expediency in selecting an independent lab to conduct split sample testing.
Under the rule changes, a trainer notified of a positive drug test must arrange with an independent lab to conduct a review of the sample within a period of two weeks. Once the results of the split sample are returned, a hearing involving the trainer and state stewards must be held within three weeks, NYSCG Executive Director Rob Williams explained. Split sampling is a technique in which multiple blood or urine samples are taken from a horse to determine the accuracy of the primary sample.
Williams’ comments came one day after Forte breezed at Belmont Park ahead of next month’s Grade I Belmont Stakes. Forte had been the morning-line Kentucky Derby favorite but was scratched hours before the race with a foot injury.
Champion and Belmont (G1) hopeful Forte breezed Sunday over the Belmont Park dirt training track in his first workout since scratching on the morning of the May 6 Kentucky Derby (G1) as the morning-line favorite. https://t.co/FKhlRpdGwS pic.twitter.com/eZfQfl1AUZ
— Paulick Report (@paulickreport) May 21, 2023
The New York commission met on the same day that the Horseracing Integrity and Safety Authority’s (HISA) Anti-Doping and Medication Control program went into effect across the nation. As a result, the Horseracing Integrity & Welfare Unit and HISA will take over testing responsibilities for any positive drug samples in thoroughbred racing. The NYSGC will continue to oversee testing responsibilities in cases involving standardbred horses.
Williams noted that there are at least five outstanding split samples under review at independent labs. Pletcher is appealing the stewards’ decision on the suspension.
