Hot on the heels of announcing that they would join the lineup of Internet merchants dumping their affiliates in California, Hawaii, North Carolina and Rhode Island – states that plan to tax Internet referals – Overstock reversed its decision to drop its California-based affiliate advertisers following an assurance from Governor Arnold Schwarzenegger’s Office that his rejection of the affiliate nexus tax bill will stand.

Overstock.com’s Chairman and CEO, Patrick Byrne responded “I compliment Governor Schwarzenegger on getting it right” and assured the Governor that it would turn back on the advertising feeds from its California-based affiliate advertisers.

I can only hope that Hawaii, North Carolina and Rhode Island will see the negative impact of their anti-consumer, anti-business legislation and choose not to sign it into law – especially in a down economy!

Have you had your affiliate feed turned off? Please share your story…

Bob asked the question, “Does this mean that affiliates can promote soft games in the US and not come into conflict with the law?” following my ‘Gaming Affiliates Set Sights on New Opportunites in Lucrative Niche Markets‘ blog post.

Although I’d love to provide a definitive answer (in the affirmative) for you, skill games promotion seems to be a big “gray area” in U.S. law, with some games deemed acceptable while others that one might assume qualify as skill games are not eligible for promotion.

And before I delve into confusing you further, here’s my caveat; a) I do not work in the gaming sphere, b) I live in Canada and c) I am not a lawyer.

That said, I found this answer to the “Is it legal to promote Skill games in USA? ” question in the BetonBattles affiliate FAQ …

BetonBattles fee-based tournaments do not constitute gambling because they only involve skill, as opposed to chance, and are designed as interactive on-line entertainment for adults. The US Federal legislation of September 30, 2006 — H.R.4411 “Unlawful Internet Gambling Enforcement Act of 2006″ Sec. 5362 defines illegal betting or wagering as including “the purchase of a chance or opportunity to win a lottery or other prize (which opportunity to win is predominantly subject to chance)”.

On the Certified Skill Games Affiliate Programs page at CasinoAffiliatePrograms I found:

Big Win Partners which offers Rotoplay Fantasy Sports and Picks Online states that it “is 100% legal to promote and our brands are not linked to online Casino or Poker rooms“.

From RummyAffiliates which promotes a online multi-player Rummy games including Gin Rummy, Oklahoma, Kaluki and Traditional Rummy says “WANTED – US Traffic“.

RedHotPartners which has the GameAccount and RedHotRummy properties featuring multi-player blackjack, rummy and backgammon games states, “It’s legal to advertise skill games!”

Yet, digging deeper into the RedHotPartners affiliate program, I found “program does not accept US-based real money customers” but they are not specific as to whether that applies to the rummy and gammon games.

However, what you’ll find is that following the passing of the Unlawful Internet Gambling Enforcement Act 2006 in the U.S., many gaming networks incorporated software that identifies U.S. residents (or U.S. residents in ineligible states) and blocks them from accessing the site and opening real money accounts.

SkillGround offers cash prizes for playing real video games reports that skill-gaming “is legal in 39 U.S. states, and Europe”.

SkillGround lists residents of Arkansas, Arizona, Connecticut, Delaware, Florida, Iowa, Illinois, Louisiana, Maryland, South Carolina, South Dakota, Tennessee and Vermont as not eligible for play.

That’s 13 states for a total of 52. At last count the U.S. only had 50 states.

Hmmm…

I would be concerned if I were a U.S. based affiliate.

Although U.S. resident affiliates were permitted to retain their affiliate accounts and could continue to refer players who do not reside in the restricted territories, what happens if you are a resident of one of the 13 states and are seen to profit from the avails of ‘skills-gaming’?

That’s a question for which I could not find an answer.

Does anyone else know?

One would hope that if that applies to you, you would be restricted from joining the program (especially those offered through a major network like CJ) if you are not eligible to promote that program.

From my Canadian IP address vantage point, I saw no geographic elibility restrictions against signing up for most of the betting / gaming programs listed in the CJ network.

In the meantime, should you choose to market skill games online as a U.S. resident to U.S. residents, you should seek a definitive legal answer.

Moreover, READ the affiliate TOS (terms and conditions) and agreements for each program you might want to promote thoroughly before joining.