The recent legalization and licensing of online gambling in New Jersey and Nevada has led to a significant flurry of online gambling ads. While online gambling ads were once anathema – usually run by offshore sites and sometimes targeted by prosecutors — they are now becoming more familiar on many websites. Few laws outlaw advertising of legal gambling (both for statutory and constitutional reasons), but there are regulations that apply.
If, for instance, you are a website, web service, email provider, mobile or web-based advertising network (or other channel) that hosts or places online gambling ads, you may be required to register as a vendor providing “goods or services” to a casino under New Jersey’s Casino Control Act (see N.J.S.A. § 5:12-92(d), (t) and N.J.A.C. § 69A-5.11 (a). Even if you have already registered as a vendor to New Jersey’s land-based casinos, as thousands of businesses have, you may need to provide additional contractual documentation or supplemental information and forms to run ads for online casino activities.
While Nevada’s reporting laws do not parallel New Jersey’s, Nevada also has registration and licensing requirements for gaming service providers, which do not apply elsewhere (and are not obvious in their application). For instance, companies that provide list marketing or similar affiliate marketing services may be required to register as service providers. Specifically, Nevada gaming laws (NRS § 463.677 (5)(a)) require any entity providing a casino with a “database or customer list” for interactive gaming to be licensed.
Failure to properly and timely register may subject businesses to state sanction. On a more immediate and practical level, however, if you provide services, advertising or even ad inventory to an online casino and fail to register, the casino may refuse payment. Casinos are generally restricted from paying unregistered vendors, and may have inserted standard provisions to that effect into services agreement with your company.
As more states pass legislation sanctioning and licensing online games, these rules may grow still more complex. State gaming laws are already a patchwork quilt, with each jurisdiction applying its own unique guidelines and thresholds for which service providers and vendors must be registered and licensed. And some jurisdictions (as is often the case in New Jersey) require businesses providing services unrelated to the gambling operations themselves to nonetheless provide register and document their relationships with casinos.
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