FanDuel Warns Affiliates: Stop Promoting Offshore Sportsbooks

(Disclosure: BettingUSA.com maintains an affiliate relationship with FanDuel that includes compensation in return for referring customers to FanDuel. This relationship does not impact our reporting on this story or any other topic related to FanDuel.)

It’s either us or them.

That’s the gist of an e-mail sent to members of the FanDuel Partners affiliate program. In an e-mail sent to FanDuel affiliates this morning, the company explained that it no longer wishes to work with webmasters who also promote offshore sports betting and gambling sites.

Here’s the e-mail in full:

Dear Partner,

We would like to remind you that Section 3 of the terms and conditions which govern your participation in the FanDuel Partners Program, defines an unsuitable site as any site that promotes illegal activities. Please be advised that FanDuel considers the promotion of offshore gambling websites as promotion of illegal activities. As such, FanDuel will take steps to monitor your site to ensure it complies with FanDuel’s terms and conditions, and will take appropriate actions including, but not limited to, terminating your participation in the FanDuel Affiliate Program if you fail to comply with the terms and conditions. By continuing to participate in the FanDuel Affiliate Program, you represent and warrant that your site does not currently promote any illegal activities, including, but not limited to, offshore gambling.

We appreciate your continued participation.

Sincerely,

Kyle Wachtel

Director, Marketing Partnerships

What’s This All About?

FanDuel Partners is a betting affiliate program that pays people for referring new customers to FanDuel. Typically, people who run websites or who have a significant presence on social media can join the FanDuel affiliate program and be given special links to promote FanDuel.

Whenever someone clicks on one of those links and joins FanDuel, the affiliate receives commission for referring that customer. The FanDuel affiliate program offers two compensation models: one pays a flat fee of $25 to $35 for every new referral and another that pays a 35% commission of the revenue generated by each referral.

For example, if you send 100 new players to FanDuel in a month, you’d be paid $35 for each of those referrals for a total of $3500 in commissions. It’s a nice deal for affiliates and FanDuel alike because the program is free to join and FanDuel doesn’t have to pay anything until it has acquired a new customer.

Affiliate programs are ubiquitous in the online gaming industry. DraftKings also has an affiliate program, most NJ online casinos have affiliate programs and even illegal, offshore betting sites have them.

That last item is the key to today’s news. FanDuel has told partners that it no longer wishes to associate itself with websites that promote offshore gambling sites alongside ads for FanDuel.

This means that anyone who runs a website that promotes FanDuel and an offshore sportsbook such as Bovada (which is not licensed in the USA) has a decision to make: continue promoting FanDuel and stop promoting offshore sportsbooks or stop promoting FanDuel altogether.

Today’s e-mail likely caught some affiliates off guard, but it’s not entirely unexpected. The recent launch of FanDuel Sportsbook in New Jersey has brought FanDuel under the regulatory umbrella of the New Jersey Division of Gaming Enforcement (NJDGE), and the NJDGE does not take too kindly to offshore sportsbooks that compete with its licensed providers in New Jersey.

The NJDGE signaled its plans for dealing with illegal betting sites more than four years ago when the state attorney general’s office sent cease-and-desist letters to five websites that were found to be promoting offshore gambling sites alongside NJ-licensed casino sites.

The cease and desist letters warned the owners of those websites that their promotion of unauthorized gambling sites “may be promoting activity that is contrary to New Jersey and federal law.”

The letters further warned operators that New Jersey “reserves the right to pursue appropriate civil or criminal sanctions against you if you fail to take the requested actions.”

The NJDGE followed up on the issue a year later when it published a notice reminding affiliates to stop promoting offshore betting sites to readers in the United States or face the risk of being shut out of the industry altogether.

In the notice, the NJDGE explained that even those who do not currently promote NJ-licensed gaming sites may be unable to do so in the future as all affiliates must be licensed in New Jersey. A refusal to stop promoting offshore betting sites within 150 days of the notice would put any future affiliates at risk of being considered unsuitable for licensing when applying in the future.

On a side note, these developments served to further confirm BettingUSA.com’s decision to only promote legal, licensed online gaming and betting sites in the USA.

BettingUSA.com launched from day one with a commitment to avoid offshore and questionably-legal gaming operators entirely, and that decision only looks increasingly prudent over time.

Fast-forward to today and we see FanDuel more closely toeing the company line. FanDuel has not offered any further explanation for why it is just now choosing to further distance itself from offshore betting sites, but we can reasonably guess their motivation is based on at least two factors:

1. As a licensed sportsbook operator in New Jersey, FanDuel is now more obligated to conform to NJDGE standards. Previously, FanDuel operated strictly in the daily fantasy space and was subject to less stringent regulations. Now that they’re under the state gaming commission, FanDuel is subject to strict regulatory oversight.
2. FanDuel now has an incentive to shut unlicensed operators out of the NJ market. Why would FanDuel, after going through the expense of acquiring an NJ sports betting license, want to compete with offshore operators that are unlicensed and unregulated?

FanDuel has not confirmed those reasons, but the logic makes sense based on our understanding of the NJ market. If this holds true, we can anticipate other NJ-licensed gaming sites to follow suit.