Gambling Affiliate - Legal questions

Discussion in 'Affiliate Programs' started by Renard, Nov 27, 2012.

  1. Renard

    Renard Junior Member

    Apr 12, 2012
    Likes Received:
    Hi Team - When Affiliating with a Gambling website, what are the Legal things you should consider to avoid being sued either by the Gov or anyone else ? (I am in North America)
    And also, to be become Affiliate with a Gambling website, do you need the software or they provide it to you to add it on your website ?

    Many Thanks!
  2. PhilVegasOne

    PhilVegasOne Newbie

    Nov 28, 2012
    Likes Received:
    Hey Renard,

    I'll try to best answer your question. Let me introduce myself. I am a partner in a large gaming affiliate/broker with several thousand players spread among many countries. I am a licensed California Attorney.

    That being said, I also want to make the following clear. I have not practiced law in over 10 years. I have never practiced law in gaming. So I am not giving you legal advice here. You should seek an attorney on the matter. I take no responsibility. I am probably not licensed in your state. I'm not active as an attorney. Consider the following opinion that of the opinion of a non-lawyer layman working in the gaming affiliate field. (kinda making a joke here, but seriously do not take this as legal advice-- just an opinion)

    My primary area of practice was consumer fraud and divorce law -- And if I were still licensed the only legal opinion I'll express in this area is DON'T DO IT (Getting married that is...)

    In my business I tend to look at the issue in two different ways -- 1) Is it legal, illegal, or grey area. 2) The reality of and severity of breaking any potential laws. Risk vs. reward -- For example, if I was speeding, is it illegal? Yes definitely. Does the joy of reving my sports car outweigh the consequences of getting caught -- To me the answer is yes. This of course is personal.

    First off, with exceptions of some well settled things, most of this area is grey. Its both grey in 1 and 2. Anyone who's professing to know the answer is just fooling themselves. Legal scholars and multimillion dollar court cases are being litigated right now on these issues.

    Every jurisdiction has different answers for 1 and 2. When you say North America I'm supposing you're referring to USA. Cause Canada is vastly different than the USA. Your risk also depends on where you live. For example if you live in Canada and you're affiliating people in USA. You're small (by small I mean you might still be making 300k a year, but not millions) I just don't see the USA trying to extradite you.

    Also within the USA the answers differ for 1 and 2. Some states are crazy about prosecuting people and others are not. I could probably spend the next year researching these things and write a 400 page legal brief on this and then someone from Harvard would say I was all right -- all wrong -- or somewhere in between.

    All I can say here is I'm in the business, and I do regularly keep up on the news in this area. I can't possibly keep up with every state and every country so really I'm just going to express my personal opinion here.

    A) Sports Betting -- Well I think the wire act makes this pretty clearly illegal. Theres plenty of court cases also upholding the wire act applying to internet gambling. So that being the case, whats your liability as an agent/affiliate? Well I like to draw this analogy: Your friend sells drugs and you refer someone to him. Well reality I dont think you're going to get in much trouble or even prosecuted if you send your friend to him. Maybe legally you are assisting in some way but the reality is you're not getting in trouble for this.

    But lets change the facts now. Your friend sells drugs and everyone you refer to him hes giving you a % of the profits. Well I think its pretty clear you're in a conspiracy or partnership. Now I think if they can prove it you're definitely in trouble. In reality how much trouble you get in depends on the prosecutor and how much you're making. Seriously if you send him a friend or two and he kicks you a 20 dollar bill and they buy thousands of dollars of drugs I don't see you getting in trouble. But if you're sending him tons of people and making tons of money from this.. Well, then you might be in hot water.

    But how does this affect internet gaming in terms of point 2? Well to this date I've never seen any affiliate prosecuted for affiliating for a sports betting site. The closest thing I can think of is the Nevada legal arrests see article below:

    (Won't let me post the new URL so google cantor gaming exec arrested in lasvegas sports book sting)

    But look at whos involved in that.. Most of the articles do not actually state they were affiliating for a large online sports book. But there are a number of factors here which really go beyond the normal affiliate. They had a MASSIVE OPERATION -- They were making millions. It involved major players -- and what I think is very important is they were acting as booking agents. (For those of you not familiar with gaming, these agents take cash in person and pay cash in person while they shuffle money around online)

    So to sum up Sport Betting -- Yes I think clearly illegal.. How much risk are you taking? Probably not much if you are small. Also keep in mind this is FBI territory. Theres a big difference between messing with local police and FBI.

    For me personally I stay far away from sports betting.

    2) Casino Games -- (Video slots, roulette, blackjack etc) Casino games are interesting too.. I believe recent court cases are pretty much upholding that the wire act applies here. Also you have to worry about UIGEA here. The thing is for some reason it doesn't appear the government (talking USA) has really be out to get much of anyone here. I mean when you look at all the big fish still roaming around in this pond, I think its unlikely that they start going after affiliates. As an affiliate you are a bit remove. You are not directly committing the act. I mean a weak argument can be made that you are just an marketing arm. A promoter. A consultant. Weak argument but then again maybe not. I think the government is much to busy trying to go after major players than to screw around with a smaller affiliate.

    To this day I've never heard of a single affiliate being singled out and believe me there are some big players making BIG money from affiliating in gaming. I think the risk here is really where you reside and if some local single "yahoo" cop gets the time and the motivation to do anything. Certain states probably carry more risk.

    3) Poker-- Poker is interesting because at first glance you would think it would fall into the same category as casino games. But it doesn't. The DOJ has made it clear they do not think wire act applies to poker. Numerous courts have said it must be treated differently than sports betting and casino games. The reason is that most gaming laws defined illegal gambling as games which rely "sole-ly on chance". Whether you believe it or not, poker is a game of skill. Therefore some courts are ruling that you can't be prosecuted under traditional gaming laws.

    (Can't post URL so Search NY Federal judge rules Poker legal)

    Now this goes jurisdiction to jurisdiction. Some states have made it clearly illegal. But then we get to point 2-- The risks.

    I think its overall low risk. The DOJ hasnt even bother to shut down some multi million dollar poker sites still catering to USA players. I don't think its unlikely to go after affiliates or paid marketing consultants. I mean if they were hold someone liable marketing, are they also going to now hold the web designer responsible?

    Now this doesn't mean they won't try. But basically there's pretty big fish to fry and I don't see them going after them. Its a matter of risk tolerance. I have a basic rule which is if they video taped everything I did in my business, could I mount a legal defense on my behalf? Well I believe in poker I can. Therefore for myself personally this is the only gaming area I work with sites on.


    I wouldn't think someone is stupid for entering any of these areas. But it becomes a matter of your personal risk tolerance. Lets look at "junk bonds" there were so many people that made hundreds of millions selling junk-bonds. I don't even think it was technically illegal, but the economy crashed and they needed someone to blame. Therefore they prosecuted Michael Milkin the king of junk bonds. Hundreds of other people made billions including goldman sach for selling these bonds. In the end one person paid the price. well lets look at where goodole michael is today? Hes worth abotu 300 million and banned from trading in the stock market.

    I think there are definately states which affiliating for gaming is illegal. I dont think you'll get in trouble but I limit my affiliation to states which I believe it is grey in. Now that being my opinion, I do believe there are alot of states where it is illegal for the site to operate but the affiliate is within reasonable legal grounds to operate. Other states I'd stay away from.

    But really all it takes is some local prosecutor to get a hair up their ass and try to prove its illegal to make a world of hurt for some single affiliate in gaming.

    If you are someone whos looking for something absolutely 100% proven legal, you had best stay away. This is a grey area and things are still unsettled.

    ALSO one more closing statement--

    If you do decide to go ahead in this area, and for some unknown reason you run into an inquires from any government or legal entity -- Just keep your mouth shut! Get a lawyer.

    This my sound silly but I've seen too much in law some person trying to talk their way out of something and hang themselves. Everything in the law revolves around evidence. What they can prove. Lets say you're doing an affiliate and something happens. Can they even PROVE you made money? Where you making money? What if it was just some unknown guy that paid you 100 bucks to spam email for him, you had no clue what it was for. Sounds absolutely silly but the burden is on the prosecutor to prove something. The less they perceive they can prove combined with the more grey an area is, the more likely they are to leave it alone.

    Let me tell you an interesting story I heard and I know is true--

    This person was ripping of a casino. The police had it on video tape and their car in the parking lot. So they pulled this person over and dragged them down to the police station. They took them into questioning room. They sat them down and said "we know what you did. Now answer our questions. Heres the video tape. See your car, see you standing over the machine. See the machine was missing money afterwards. You're the only one that was playing. We want to know who that person is that was with you. Tell us"

    This person looked at the police and said "I didnt rip off the casino. Obviously though you're convinced I am. I'm not answering your questions, just arrest me now since you said you know I'm guilty and get my my lawyer." The police look dumbfounded. They basically let the person go. Thats the last this person ever heard from them. This person figured out if they really had enough evidence there wasnt a need to question them.

    Remember if you ever in a bind, call Saul Goodman (If you don't know who this is google it)

    Also if you have any other questions, or interested in me recommending gaming deals, please contact me via PM.
    • Thanks Thanks x 1