New York Amazon Case Could Set Affiliates as Online Casinos

But the possibility of creating a precedent of treating affiliates as a branch of the companies they market could have far-reaching effects for Internet gambling.

Joe Brennan, Jr., chairman of the Interactive Media Entertainment and Gaming Association, gave an interview recently in which he discussed ongoing legal battles concerning the Internet. Among issues reviewed with Poker News Daily was the New York dispute with Amazon, which Brennan sees as having potentially dramatic effects on the online casino industry.

Brennan says that the state of New York, in order to tax Amazon, is trying to establish the precedent that affiliates of the online retailer would be treated as extensions of the company itself. For tax purposes, this would help New York's case, as some affiliates of Amazon are based in New York, even though Amazon is based in Seattle.

But the possibility of creating a precedent of treating affiliates as a branch of the companies they market could have far-reaching effects for Internet gambling. At present, online casino affiliates avoid the glare of US prosecution by not hosting any gambling themselves. While the sites may advertise online gambling sites, they are not directly related, nor are affiliates responsible for the actions of the casinos.

But a victory for New York against Amazon may change that. If affiliates are viewed as extensions of the sites they advertise, then affiliates based in the US may be viewed by law enforcement the same as Internet gambling sites, risking prosecution.

The New York case, Brennan says, is interwoven with the Kentucky domain name case. In both instances, states are seeking either to create new revenue streams or else block those businesses not under their taxing thumb. At stake is the principal of who governs the Internet, and who profits from online sales, a battle raging to other areas such as the disputes raging between the actors' and screenwriters' guilds and the production companies.

While federal legalization and regulation may come soon enough to render much of the debate moot, the war over the masses of money exchanging hands on the Internet is sure to continue, as legislators grapple to deal with the new realities presented by online technologies.