Why Germany should permit online casinos to use affiliates

The January announcement that a new national regulatory authority on gambling had been established in Germany was welcomed by stakeholders across the global online gambling industry.

That 16 federal states had agreed to a treaty that would allow operators to offer online casino and poker to players in the country for the first time was a huge step forward.

Until the announcement was made in the state of Schleswig Holstein, offering online casino and poker was very much a grey area for operators targeting German players.

But while the news was positive for online casino and poker brands, and third parties such as game providers and payment processors, it was less so for affiliates.

According to media reports, the regulation and licensing of online casino and poker in Germany will see strict rules and requirements put in place, particularly around marketing and advertising.

At the back end of last year, and prior to the new treaty being announced, bet365 closed down its online casino in Germany and told affiliates to stop promoting the brand to players in the country.

Bet365 was simply complying with temporary rules put in place by German authorities while the full regulations are developed and deployed.

But it is cause for concern for affiliates and the role, if any, they will play in a regulated online casino and poker market in the country as and when full regulations are revealed

While it is understandable that regulatory bodies are concerned about affiliates and how operators can ensure their publisher partners are compliant, affiliates do play a vital role in the wider ecosystem.

The risks of banning affiliates

If German authorities do decide to ban affiliates from promoting German-licensed brands to German players, they run the risk of not making consumers aware that the activity is legal.

This means that many players will continue to access the unlicensed, offshore websites they play at today. And while some of these sites are reputable, others are not.

This goes against the whole idea of regulation and licensing, which is to ensure operators are meeting the highest responsible gambling standards and protecting consumers.

In this regard, affiliates play a vital role in educating players about which brands are licensed and the quality of the experience they can expect to receive at a particular online casino.

This includes the tools offered by the operator to help them stay in control of their play as well as explaining any terms and conditions that come with using the site or that are attached to bonuses.

Professional affiliates that understand responsible gambling and compliance will only recommend the best sites to players, even if other brands offer them better commercials.

If German authorities ban affiliates from the market, how will players be able to determine whether a site is reputable or not, whether they are responsible or not? Simply put, they won’t.

Affiliates are the best way of holding operators to account, providing players with the information and insight they need to decide where they should and shouldn’t play.

This is why they have played such a central role in established and highly regulated markets like the UK for many, many years.

Operators will suffer as a result, too. Affiliates are a key driver of new player traffic for brands, especially those in highly competitive markets where regulatory restrictions are in place.

If German regulations include strict rules around advertising, operators may struggle to engage players putting the long-term viability of their place in the market at risk.

How to ensure affiliate compliance

The reason for authorities wanting to carefully consider the role of affiliates is undoubtedly because of concerns over compliance and the methods publishers use to target consumers.

This is understandable as not all affiliates prioritise responsible gambling and compliance and do not meet the rules and requirements set by their operator partners.

But this does not mean that all affiliates should be blocked from the market. Instead, operators should be able to work with a select number of affiliates that can prove they are compliant.

This means showing that terms and conditions are being displayed as required, that newsletters do not contain direct links to online casinos and so on.

In addition to this, operators could require affiliates to partner with gambling blocking software providers, allowing players they have referred to self-exclude if they feel the need.

The onus is on affiliates to prove themselves

This, of course, requires affiliates to prove that they are professional and responsible and that they are willing to work hand in hand with operators and regulators.

Those that are responsible and reputable can and do play a key role in regulated markets all over the world – educating players and holding operators to account.

They can, and should, be able to play just the same role in a regulated and licensed German online casino market. They just need to prove they are up to the job.

Joonas Karhu is chief business officer at Bojoko.com