Why Gaming Affiliates in Germany face difficult times
Gaming affiliates: It’s time to come clean
It’s no secret: For years, many of online gaming affiliates in Germany have been operating in a gray area—or, in many cases, even illegally. Many websites, comparison portals, and social media accounts promote offshore casinos in German, targeting German-speaking players. The affiliates then receive commissions through foreign companies. In most cases, these payments are processed via payment providers, crypto wallets, or accounts abroad.
The revenue often comes from players residing in Germany, which means the provisions of the 2021 State Treaty on Gambling apply. The GGL, as the supervisory authority, is becoming increasingly well-equipped, and there is now a flood of GGL proceedings against Gaming Affiliates in Germany, which are often accompanied by investigations from the relevant public prosecutors’ offices.
Therefore, it is extremely naive and dangerous to believe that one can keep gaming activities out of the reach of German authorities by operating anonymously and offshore and receiving funds only in crypto wallets.
Germany has a regulated Gambling Market
The legal framework is relatively clear: gambling services offered to customers in Germany require an appropriate German license. Of course, advertising for unlicensed gambling is also prohibited and is regulated under Section 284 of the German Criminal Code (StGB). The Joint Gambling Supervisory Authority of the German Federal States (GGL) monitors compliance with the regulations.
These legal aspects are important for affiliates. An affiliate is not automatically acting unlawfully simply because they earn money through gambling advertising. However, advertising providers without a German license is illegal and thus constitutes a criminal offense; first-time offenders are generally fined. A prison sentence of up to one year is also possible.
What does this mean for gambling affiliates based in Germany or for those who target German customers from abroad? Casinos based in Gibraltar, Malta, Curaçao, etc., that do not also hold a German gambling license may not be advertised.
Therefore, the first question every reputable gaming affiliate should ask is:
Are the providers I’m promoting actually licensed for the German market?
The official German GGL whitelist was created by a government agency and provides an overview of online casinos licensed in Germany. Various casinos from Malta and Gibraltar now also hold licenses for Germany. This means you’re on the safe side.
Affiliate marketing is a business – not a hidden source of online income
Many gaming affiliates are well aware that they’re operating in an illegal business environment. So it’s no surprise that many affiliates prefer to receive commissions in seemingly secure crypto wallets. Once there, the funds sit idle and can only be used to cover business or personal expenses under difficult conditions.
The world of online gaming is attractive because successful affiliates can earn substantial commissions. These commissions must be reported on every income tax return or, if received through a company, on the corporate tax return. There is no exception to commissions being taxable income simply because they originate from Malta, Curaçao, Cyprus, Gibraltar, an offshore company, a cryptocurrency transaction, or an international affiliate network, and are paid anonymously in cryptocurrency. A digital business is still a business and must be taxed. Tax evasion has long ceased to be a trivial offense.
The fun stops completely when, in addition to untaxed income paid into crypto wallets, a person also receives basic income or social assistance. This constitutes social security fraud and is prosecuted as fraud under Section 263 of the German Criminal Code (StGB). In such cases, hefty fines are still the lesser of two evils. Especially for repeat offenders or for criminal offenses exceeding a certain threshold, prison sentences of up to 5 years may be imposed.
Despite all the glamour, it’s simply not worth it, and gaming affiliates should build their business on a solid foundation—the kind expected of reputable entrepreneurs.
- Identify yourself.
- Operate under an appropriate legal structure.
- Maintain proper accounting records.
- Maintain transparent banking relationships.
- Document income and expenses.
- File tax returns and pay taxes due.
Attempting to build a sustainable business while simultaneously avoiding banks, tax advisors, accountants, and tax authorities is a contradiction.
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A bank account should not be a cause for concern for Gaming Affiliates
Many gaming affiliates complain that opening accounts is often very difficult, if not impossible. There may be some truth to this, as gambling is considered a high-risk industry from the perspective of banking and anti-money laundering regulations. So it’s not surprising that even reputable companies face extensive questioning. Our group firm, Chenevieres Consulting SA, and operating under its’ brand FIRSTADVISOR, can support you with all banking needs.
Ultimately, a reputable affiliate company should be able to explain to a bank who it is, where its money comes from, and why it receives it. Do you realize that your current business model is becoming obsolete? Contact us to put your business on a sound footing.
