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 issue

The MGC first announced its intention to address revenue sharing agreements in February. Current regulations in the State of the Bay prohibit all sports betting operators from compensating third parties based on customer volume, bets or the outcome of specific bets. Such restrictions rule out the traditional affiliate models that many operators rely on for marketing and promotions.

After a thorough review, the Commission agreed to hold discussions with the operators and affected parties to determine its future course of action. The regulator announced that it would hold its final vote on March 23. However, the date is almost two weeks after the official launch of online sportsbooks in the state, so it would substantially hamper operators who rely on affiliates for much of their onboarding process.

The regulator is working on a permanent solution

According to the latest updates, the MGC has granted a temporary waiver of CPA and revenue sharing restrictions until April 14. A unanimous vote decided that the stopgap measure would provide enough time to implement better safe gaming rules while allowing for a smooth and seamless launch of online sports betting.

Despite the regulator's willingness to address the matter, the exemption is unlikely to be permanent without implementing additional compliance and safe gaming requirements. Several commissioners were cautious about the compromise, but most agreed that the MGC should take the lead and impose a framework focused on player safety.

Someone is going to fill the gap… and we should regulate this.

MGC Commissioner Jordan Maynard

The Commission has already taken steps to control affiliates with a new regulation that classifies them in the same category as sellers, requiring them to register with the regulator. The MGC is also considering requiring them to apply for a vendor license or possibly introducing other regulations to avoid market saturation.

Affiliate marketing for operators is still a sensitive subject. MGC President 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 possible to ensure a safe and reasonable implementation. With the launch of online sports betting on March 10 drawing near, the Massachusetts regulator will no doubt face many other similar challenges.