The regulatory framework for online gaming and sports betting in the U.S. is intricate, as it’s primarily regulated at the state level. This has resulted in a patchwork of laws, with each state establishing its own rules and requirements for operators, including media affiliates that provide marketing and referral services.

The Role of Media Affiliates

Media affiliates play a crucial role in the online gaming and sports betting ecosystem by promoting gaming sites, driving traffic, and earning commissions through referrals. However, their legal obligations vary significantly across different states.

States with Legalized Gaming and Sports Betting

As of 2024, several U.S. states have legalized online gaming and sports betting. While most states that legalize sports betting also allow online sports betting, some states restrict online sports betting to licensed locations.

The US States which enacted laws legalizing sports betting are:

1. Arizona
2. Arkansas
3. Colorado
4. Connecticut
5. Delaware
6. Florida
7. Illinois
8. Indiana
9. Iowa
10. Kansas
11. Kentucky
12. Louisiana
13. Maine
14. Maryland
15. Massachusetts 
16. Michigan
17. Mississippi 
18. Montana
19. Nebraska
20. Nevada
21. New Hampshire
22. New Jersey
23. New Mexico
24. New York
25. North Carolina
26. Ohio
27. Oregon
28. Pennsylvania
29. Rhode Island
30. South Dakota
31. Tennessee
32. Vermont
33. Virginia
34. Washington D.C.
35. Washington
36. West Virginia
37. Wyoming

It is also important to note that while many states have chosen to legalize sports betting (including, in most cases, online sports betting) only a handful of states have chosen to legalize online gaming in addition to sports betting. 

To date, only eight (8) states offer regulated online gaming:

1. Connecticut
2. Delaware
3. Michigan
4. Nevada
5. New Jersey
6. Pennsylvania
7. Rhode Island
8. West Virginia

Media Affiliate Licensing Requirements

In the U.S., some states require media affiliates to obtain licenses to provide services to local licensed operators. Licensing requirements can vary based on the state and the affiliate’s revenue model.

Key Considerations for Media Affiliates

• Compliance with State Regulations: Even in states without licensing requirements, affiliates must comply with advertising laws, including responsible gaming disclosures and restrictions on targeting minors.
• Revenue Models: The revenue model (CPA or Rev-Share) can impact licensing requirements. States may have different regulations for each model.
• Background Checks and Investigations: Licensing may involve rigorous background checks and investigations.
• Incorporation: While not mandatory, incorporating in a reputable onshore jurisdiction is advisable.
• Registration with State Authorities: Besides the gaming regulator, registration with other state authorities might be necessary.
• Relationship with Licensed Operator: Establishing a contractual relationship with a licensed operator is crucial for the licensing process.

Comparison with Other Jurisdictions

Compared to other jurisdictions, the U.S. has a more complex and varied regulatory landscape for media affiliates. Romania and Greece, for example, do not differentiate between CPA and Rev-Share models for licensing purposes.

The licensing process in the U.S. can be more demanding for affiliates operating under a revenue-sharing model compared to those using a CPA model. However, the U.S. offers the advantage of operating in the world’s most booming online gaming and sports betting industry.

Conclusion

The regulatory environment for media affiliates in the U.S. is diverse and complex. Understanding the specific requirements of each state and consulting with legal experts, such as Porat Group, is crucial for navigating this landscape effectively.

Written by David Woliner, Adv. 
Head of Financial Regulation.