Delaware LLC + Gambling Affiliate Business = Compatible

[alexcruncha]

Hi,

I'm currently looking at the options for incorporating my affiliate business. I live outside of the US and my earnings come from outside the US so a Delaware LLC would provide a no income tax and no VAT type of company within the minimum of red tape and no audit requirements etc. I have also looked at Belize or BVI as other options for company registration but Delaware seems like a nice jurisdiction to work with.

My main concern is if Delaware is a good place to incorporate a gambling affiliate business.

Does anyone know:
1. If this type of business is 100% legal in the US or subject to some US legislation?
2. If any operators/affiliate-programs will not work with and pay out to a US company?
3. If US citizens have any issues working with operators/affiliate-programs?

[pinkytoe]

This is not legal tax advice and you should speak to an advisor in your own country but if I had the chance to choose an offshore jurisdiction to set up my company that promotes gambling - I would not be choosing the Delaware or anywhere else in the US.

[TheGooner]

I had to check the calendar to make sure that it was not April 1st !

[Gamer]

Hahahahaha Perhaps April 1st in New Zealand is on the different date?

[alexcruncha]

I'm glad I gave you guys something to laugh about with my naivety !!! Ok, ok I got the jist, I should be going with Belize.

But seriously, because I cannot find details about this anywhere online and I am curious... can anyone tell me definitively if it is actually illegal to do affiliate marketing in the gambling niche while being a US resident? (while promoting exclusively to players outside the US)

[-Shay-]

It isn't "illegal", but if you're set up in the United States and bank in the United States, some programs may have a tough time paying you and others will have a hard time paying you in a timely manner.

If it were me, I'd simply remove the US from the equation --- especially if you're not living in the US.

[Gamer]

"if it is actually illegal to do affiliate marketing in the gambling niche while being a US resident? (while promoting exclusively to players outside the US"

If you do not target US players, it's okay. You could be US corporation, but keep your sites hosted in other jurisdiction.
I think, the problem is not where your company is registered, but who is going to use your services and where are living your players.
That's my opinion.
On this forum are persons, who are U.S. residents, but target players that are living outside the US. Perhaps they could give you more precisely information.

[alexcruncha]

Actually my bank account would be in Cyprus where I live but all in all I think taking the US out of the equation is the best thing.

I think one main reason not to use a US company is the fact that if my affiliate accounts are all signed with a US company and some legislation changed prohibiting US companies from marketing gambling business online then its possible the operators could close my accounts. For that simple reason I think Delaware is a definate no go for me.

[Gamer]

It seems that you want to pay lower taxes, and you are looking for solution.

[alexcruncha]

"if it is actually illegal to do affiliate marketing in the gambling niche while being a US resident? (while promoting exclusively to players outside the US"

If you do not target US players, it's okay. You could be US corporation, but keep your sites hosted in other jurisdiction.
I think, the problem is not where your company is registered, but who is going to use your services and where are living your players.
That's my opinion.
On this forum are persons, who are U.S. residents, but target players that are living outside the US. Perhaps they could give you more precisely information.

Thanks for your response... that is the logic I had when I was thinking about using a Delaware LLC. I do not promote to US players but just this year many forms of online gambling have become legal in Delaware, albeit with serious restrictions such as interstate play only.

[alexcruncha]

It seems that you want to pay lower taxes, and you are looking for solution.

To be honest I am not necessarily looking to pay lower taxes... actually I am just looking to find the best legal solution for my income with the least amount of red tape and paperwork - nevertheless TBH the lowest possible tax is definately a major benefit .

[-Shay-]

Actually my bank account would be in Cyprus where I live but all in all I think taking the US out of the equation is the best thing.

I think one main reason not to use a US company is the fact that if my affiliate accounts are all signed with a US company and some legislation changed prohibiting US companies from marketing gambling business online then its possible the operators could close my accounts. For that simple reason I think Delaware is a definate no go for me.

This has happened to me more than once. Had a program close down to all US affiliates (and players). They claimed they could not pay me (due to changing legal issues). After a bit of arguing, they claimed that if I had a bank account outside the US, they could issue a final payment.

Fast forward by a month's time, I was outside the US and set up a bank account in this different country. I contacted the affiliate program to let them know - and of course, they failed to pay. They could have been telling the truth that they were not able to pay me regardless. Then again, they could have been lying and just looking to bash me over the head and keep commissions because they were no longer "allowed" to work with me.

Either way, completely taking the US out of the equation would have prevented any issues and/or excuses to no pay.

[alexcruncha]

This has happened to me more than once. Had a program close down to all US affiliates (and players). They claimed they could not pay me (due to changing legal issues). After a bit of arguing, they claimed that if I had a bank account outside the US, they could issue a final payment.

Fast forward by a month's time, I was outside the US and set up a bank account in this different country. I contacted the affiliate program to let them know - and of course, they failed to pay. They could have been telling the truth that they were not able to pay me regardless. Then again, they could have been lying and just looking to bash me over the head and keep commissions because they were no longer "allowed" to work with me.

Either way, completely taking the US out of the equation would have prevented any issues and/or excuses to no pay.

Its settled then, I will be looking at BVI, Belize, Seychelles or similar then! It sounds like serious affiliates that are US residents should look at similar options too.

[Sherlock]

It isn't "illegal", but if you're set up in the United States and bank in the United States, some programs may have a tough time paying you and others will have a hard time paying you in a timely manner.

If it were me, I'd simply remove the US from the equation --- especially if you're not living in the US.

You do not need bank account in the US for Delaware LLC. You can open it worldwide. Also you can set up 2 companies and just resend the money. (Yet there are nicer jurisdictions for this prxy company like Netherlands or Cyprus).

Also US focused affiliate programmes are ready for this. They are sending money from really crazy jurisdictions under really crazy names. Do not forget thay can pay out huge money even to the US directy to gamblers and nobody can stop them.

Yet it is not definitely worth of the risk. Are you planning to come with your startup company into SF accelerator or what, that you need nice image and not just pure cash

[Sherlock]

Its settled then, I will be looking at BVI, Belize, Seychelles or similar then! It sounds like serious affiliates that are US residents should look at similar options too.

Serious affiliates should move out of US and gave up citizenship to get away from the biggest worldwide mafia called IRS. Not to mention that offshore and private banks now are more and more relutant to open accounts to anyone connected to US, because there ishuge pressure underneath on the from US officials.

I had to sign a paper I am not doing business with USA at my bank. Since the US focused companies send me money from outside of US, it is no problem. But now I will be investing in the USA outside of gambling and I have to send there money indirectly. Crazy times.