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Deyan Dimitrov March 3, 2023 3 min read
Massachusetts Temporarily Allows Affiliate Agreements for Sportsbooks
The state regulator unanimously agreed to allow Cost Per Acquisition (CPA) and revenue-sharing models until 14 April
Operators in the Bay State can rest easy after the Massachusetts Gaming Commission (MGC) voted 5-0 to waive some of the restrictions regarding affiliate agreements. The regulator carefully weighed the pros and cons of maintaining the current ban and decided that CPA and revenue-sharing models should exist within its jurisdiction, allowing for proper oversight.
Affiliates Remain a Highly Contentious Matter
The MGC first announced its intention to tackle revenue-sharing agreements in February. Current regulations in the Bay State prohibit all sports wagering operators from compensating third parties based on the volume of clients, wagers, or the outcome of specific bets. Such restrictions rule out the traditional affiliate models many operators depend on for marketing and promotions.
After a thorough review, the Commission agreed to hold talks with operators and affected parties to determine its future course of action. The regulator announced it would hold its final vote on 23 March. However, the date is almost two weeks later than the official launch of online sportsbooks in the state, so it would substantially hamper operators who depend on affiliates for much of their onboarding process.
The Regulator Is Working on a Permanent Solution
According to the latest updates, the MGC has conceded to a temporary waiver of CPA and revenue-sharing restrictions until 14 April. A unanimous vote decided that the stopgap measure would provide sufficient time to implement better safe gambling rules while allowing a smooth and problem-free online sports betting launch.
Despite the regulator’s willingness to tackle the matter, it is unlikely to make the waiver permanent without implementing additional safe gaming and compliance requirements. Several commissioners were cautious regarding the compromise, but most agreed that the MGC should take the initiative and impose a framework focusing on player safety.
Someone is going to fill the space…and we should be regulating this.MGC Commissioner Jordan Maynard
The Commission has already taken measures to reign in affiliates with a new regulation classifying them in the same category as vendors, requiring them to register with the regulator. The MGC is also considering requiring them to apply for a vendor license or potentially introducing other regulations to prevent market saturation.
Affiliate marketing for operators remains a sensitive subject. MGC chairperson Cathy Judd-Stein noted that revenue sharing inherently contradicted the organization’s responsible gaming efforts. However, the Commission seems to agree that the practice is a necessary evil and is doing everything to ensure safe and reasonable implementation. With the 10 March online sports betting launch closing in, the Massachusetts regulator will undoubtedly face many other similar challenges.