We answer the question:

Is it legal to run an affiliate website for online gambling in the United States?

Last Update: August 2023

Disclaimers

The law and the enforcement are constantly changing, and what's true today could be different tomorrow.
I don't guarantee to have heard of every relevant case.
I'm a layperson, not a lawyer, and god help you if you rely on this article instead of seeking appropriate legal counsel for your situation.

Law versus enforcement

The laws of some states make it easy to charge an affiliate with a crime, but I was able to dig up only one case in which that actually happened, and even then the affiliate apparently got no jail time. So, when considering risk, we have to balance what the law says with the fact that it seems to be almost never actually enforced.

The only case I could find

Way back in 2006, the state of Washington advised the owner of an affiliate website in 2006 that advertising online gambling violated Washington law. The site owner took the site down, and it appears that he faced no penalty. (Seattle Times)

Casino City sues for the right to run gambling ads

In 2004, Casino City (CC) sued the federal government to establish its right to accepting gambling advertising. The court dismissed the suit, saying that Casino City didn't have standing because it had never been targeted. (CC never got a cease-and-desist letter, much less actually got charged.) CC initially filed an appeal, but then withdrew it, apparently feeling that its point had been made: If the feds do complain about CC's ads, CC will fight. (K&NLG, St. Louis U. Law, ) The takeaway from this is that, again, publishers of small to medium websites haven't been the target of criminal charges.

Regulated vs. Unregulated jurisdictions

Online gambling has been legalized in certain states. You'd think that would mean that it would always be legal to be an affiliate for legal casinos in those states. However, the state in which you live probably has a law against promoting gambling, and that might or might not apply to promoting legal casinos in other states. So, you might still be subject to the risks below, depending on the laws of the state where you live. Though again, enforcement against affiliates these days seems to be rare to non-existent.

Potential crimes

Here's how you could potentially get into trouble, even though enforcement so far seems to almost never happen.

Participating in earnings

Some state laws say that it's against the law to share in casino profits. For example, Texas Penal Code §47.03: "GAMBLING PROMOTION. A person commits an offense if he intentionally or knowingly...operates or participates in the earnings of a gambling place." That would seem to speak directly to revshare agreements, where the affiliate receives a percentage of a player's loss, and a criminal lawyer confirmed to me that that's indeed the case. Therefore, getting a flat monthly fee for the advertising or getting paid by CPA (a bounty for each player referred) would be much safer—as confirmed by the attorney. Most affiliates can't get casinos to pay for advertising for a flat monthly fee (the casinos insist on going revshare), but if the affiliate drives enough traffic to the casino, it's possible. I've been very successful in getting a flat monthly fee for advertising I run, but I understand that most affiliates aren't me.

Encouraging or promoting gambling

Besides participating in earnings, many to most state laws also criminalize encouraging or promoting gambling. Depending on how the advertising or editorial on a site is worded, a site might easily run afoul of this law. Here on Easy Vegas I don't encourage gambling (I steer players towards the advertiser's free-play games), but even in the absence of the law I wouldn't encourage gambling anyway, because that's irresponsible. I provide tools and advice for those gambling anyway, and I make it quite clear that the best way to not lose money gambling is to not gamble in the first place.

Aiding & abetting, or accessory

Even in states which don't explicitly criminalize encouraging or promoting gambling, there's still the issue that helping or encouraging someone to commit a crime, is also a crime. So in theory, advertising something that's illegal, could also be considered illegal. Indeed most U.S. states do outlaw accepting bets from players, and the feds outlaw taking sports bets in states where sports betting isn't specifically legalized. (source 1, source 2, source 3, source 4)

Conspiracy

Conspiracy is two or more people planning a crime. It doesn't have to be secret. So basically, any time a crime is broken and more than one party is involved, the prosecutors can tack on a conspiracy charge. (Wikipedia)

Warning before charges?

My guess is that in most to all cases, an affiliate would get a warning letter with the opportunity to cease and desist, and that charges would be filed only if the affiliate ignored the letter. That's apparently what happened in the Washington case above, where it seems the affiliate faced no actual penalty.

Which state laws apply?

How do you know which state laws apply to you? Jurisdiction regarding Internet crimes is a murky area, but in general you should expect to be subject to the laws of the states both where you reside and where your server is located.

Sources:

"A corporation or person can always be sued in its state of residence or citizenship...." Harvard.edu

"Jurisdiction conflicts abound.... Above all, it is unclear just what constitutes jurisdiction: is it the place of the act, the country of residence of the perpetrator, the location of the effect, or the nationality of the owner of the computer that is under attack? Or all of these at once? It turns out that countries think quite differently on this issue...." Journal of High Technology Law

Domain seizure

It's unlikely that a state could or would seize an affiliate's domain name, but it's possible. There's only one related case I could find, in Kentucky, which is actually pretty reassuring:

The state seized domains of operators, not affiliates.
It was way back in 2009.
Only a small number of registrars complied with the seizure.
The seizure was overturned by the Kentucky Court of Appeals. (EFF)

As of 2014, Kentucky is continuing to appeal. I couldn't find any updates from 2014-18. (2014 ruling)

Though the risk of seizure seems low, some affiliates probably register their domains with a non-U.S. registrar, and use a TLD other than .com, .net, .org, and .us (which apparently is easier for a government in the U.S. to seize).

Incorporation doesn't help

Don't think that incorporating your business protects you, just because corporations can't be jailed. The officers of corporations can be criminally charged for the actions of the corporation.

Recipe for avoiding prosecution

If you're in a state which defines participating in the profits of an operator as being a crime, then instead of rev-share, do CPA (fixed bounty per new player referred), or try to get the casino to pay you a flat monthly fee, or locate (move) to a friendlier state or country. I'm lucky to have been able to get a flat monthly fee for the advertising I run. Unfortunately, most casinos won't consider paying you a flat monthly fee unless you're generating a huge amount of revenue for them, and some won't consider it even if you are. Another option would be to sell your affiliate account (not your website) to a third party who pays you a flat monthly fee. Finally, I've heard the suggestion that affiliates on revshare just withdraw a flat amount each month from their total earnings, so the affiliate's bank records look like the affiliate is earning a flat fee rather than revshare. That doesn't make it legal, those who do this are just trying to fool prosecutors into thinking that they're not doing revshare.
Use a webhost whose servers are in a different country. And of course, make sure that country has friendly laws for casino affiliates or at least low rates of prosecution.
Don't encourage or promote gambling. Use words like "Visit [advertiser]" instead of "Play at [advertiser]". Steer players towards the casino's free-play games instead of the real-money games.
Move your domain registration to a non-U.S. registrar, to make it harder to be seized.
Change your domain to something other than .com, .net., .org, or .us, to make it harder to be seized.
Market only to regulated jurisdictions, with permission. A handful of states and countries regulate and license online gambling. Many to most of them require that the affiliate also be licensed to advertise the casinos. So, getting licensed and then advertising only licensed casinos helps establish legitimacy. (It might not protect you against your own state or country's law against promoting or encouraging gambling.)
Don't market to regulated jurisdictions, unless you're authorized. If you're not authorized by a jurisdiction to market to its residents, don't. Jurisdictions which have gone to the trouble to regulate online gambling and its marketing take a dim view of rogue operators and affiliates. (Law professor I. Nelson Rose says that marketing to licensed jurisdictions when you're not authorized is "asking for trouble." [source]) This is why Bovada won't accept players from the few U.S. states that have legal online gambling, although they take players from states where online gambling is illegal.