Massachusetts gaming regulators are expected as early as Wednesday to revise a sports betting advertising regulation that prohibits compensation agreements between licensed sportsbooks and third-party affiliate marketing sites.
The regulatory change was requested at a Monday roundtable discussion of the Massachusetts Gaming Commission by top-brand sportsbooks like FanDuel and BetMGM and licensed marketing affiliates. The current regulation prohibits Massachusetts sportsbook operators and affiliates from entering agreements that base affiliate compensation on the number of bettors, wagers placed, or outcome of wagers.
Both sportsbooks and affiliates said they’d like the change in place before the commonwealth’s mobile sports betting launch on March 10. Without it, they told the commission, sports bettors will be directed to illegal betting sites that don’t generate tax revenue or licensed, quality content for bettors.
MGC Chair Cathy Judd-Stein acknowledged the possible need for the change in her introductory comments Monday.
“We learned that our regulation might be raising issues that we weren’t aware of,” she said. “Whenever we learn that there might be unexpected consequences, or at least questions, we want to hear from the stakeholders who can best explain it to us.
“We will look at the regulations and decide if we want to make any changes,” she added.
Catena Media, owner of Gaming Today, is a gambling affiliate network and was represented by CEO Michael Daly at Monday’s roundtable discussion in Massachusetts.
Sportsbooks, Affiliates Want Change Made Before March 10 Mobile Launch
DraftKings, FanDuel, WynnBet, and BetMGM were among the operators whose representatives testified Monday in favor of the change.
According to BetMGM official Sarah Brennan, affiliates “legitimize the market” by providing helpline numbers and other information not found on illegal sites.
“You all are offering patrons a platform that is operated with integrity,” Brennan told the commission. “We would look for you to consider these amendments that we are all requesting.”
No Change Will Hurt Legal Market, Companies Say
Approval of the regulatory change will allow CPA (cost per acquisition) agreements between sportsbook operators and marketing affiliates. It could also lift a ban on types of revenue share agreements.
Revenue share agreements let affiliates earn commission on net profits earned from referred bettors. CPA agreements allow operators to pay affiliates for each bettor delivered to an operator.
Top sportsbooks and affiliates rely mostly on CPA in the US, according to Monday’s testimony. FanDuel told the commission almost 100 percent of its affiliate agreements are CPA. BetMGM said the majority of its affiliate agreements are also CPA.
Catena’s Daly said around 90 percent of its US market relies on CPA agreements.
Both Daly and Max Bischel, VP of affiliate Gambling.com Group, said CPA agreements alone would allow them to work in Massachusetts.
Bischel said banning the agreements will keep quality content out of the Massachusetts market by putting illegal sites front and center in an organic sports betting web search.
“When you do a Google search for anything … there are search results that populate and the search results that populate are general websites like the companies represented here operate,” Bischel said. “All of that enables us to be authoritative websites with expert content.
“The way the regs are written now – the operators will not spend money with the affiliates and as a result, we will have no incentive or expression to market our services or create content or invest in the market in Massachusetts,” he said.
The commission is expected to take up the regulation issue on Wednesday. A vote to change the regulation could come either Wednesday or Thursday.