New Jersey DGE Intimidates Online Affiliates with Cease-and-Desist Order

It has been widely reported in the last 24 hours that the New Jersey Division of Gaming Enforcement (DGE) is doing just that – enforcing the laws of New Jersey for the now legal online casino market in that state. The DGE sent a letter to six US poker affiliates requesting these affiliates “immediately remove

It has been widely reported in the last 24 hours that the New Jersey Division of Gaming Enforcement (DGE) is doing just that – enforcing the laws of New Jersey for the now legal online casino market in that state. The DGE sent a letter to six US poker affiliates requesting these affiliates “immediately remove any online gaming links that are not authorized under federal law or under the law of any state” under threat of civil and criminal sanctions.

The cease-and-desist notifications, signed by New Jersey Assistant Attorney General George N. Rover, were sent to CardsChat.com, PokerSource.com, RakeBrain.com, Pokersites.com, RaketheRake.com, and one unnamed site. These sites all clearly list legal New Jersey online poker sites right next to offshore online operators. Several, if not all, of the sites that were issued the cease-and-desist notices are licensed to do business with casinos in the state of New Jersey. Apparently the DGE is quite concerned with Bovada Poker, Merge Gaming, Black Chip Poker and Americas Cardroom, which were singled out in the DGE correspondence.

This notification may explain why the Winning Poker Network, which includes Black Chip Poker and Americas Cardroom, announced just last week that they would stop accepting players from the three states that have licensed and regulated online gambling (NJ, DE and NV). This tactic has been employed by many offshore operators over the years since the arrest of several high-profile executives, the UIGEA and Black Friday. To date many offshore sites will not accept players from Washington State, Missouri, Louisiana and New York. So far both Merge and Bovada still accept players from Jersey. Though Merge may make a move, it is no doubt that Bovada and many other offshore online poker operators will continue to service regulated US markets.

The letter orders the sites remove any links to online gaming sites that “are not authorized under federal law or under the law of any State.” The Federal law part is a head-scratcher. The Wire Act was singled out in a 2012 report by the Department of Justice to include ONLY sports betting. The UIGEA from 2006 is simply a banking law. We have been hard pressed to find any federal law stating that the playing of online poker is illegal. Thus, in a federal sense it is okay to play poker in the U.S. wherever it is not expressly made illegal by state law. New Jersey does fill this caveat, but it is obvious that the language of the letter is meant to intimidate the affiliates and anyone else that works in the online gambling industry both globally and in New Jersey.

This may be a huge issue if it weren’t for the tepid market for poke currently in New Jersey. The state wants these sites to take down links to offshore operators, but it may be in the sites’ best financial interests to take down the links for the Jersey poker rooms! There is no doubt that these affiliate sites have huge player bases currently established at offshore sites and thus make a ton of revenue there. IN addition, the letter states any link, so any of the affected sites will have to eliminate not only the banners and offers for the offending sites, but also any blog posts, forum posts or cached Google pages, of else they could still face prosecution.

This action by the DGE will limit the traffic driven by these five or six high volume affiliates and in the short run cost NJ operators a new infusion players. After this past months’ declining revenue figures from the state, especially for online poker, the DGE should look before they leap. And affiliates should think long and hard about their presence in any of the regulated US markets, if they want to continue working with the online behemoths that got them to where they are today.

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