In limbo: How the lack of progress on Dutch gambling laws is leaving the industry in no-man’s land

Richard Williams, partner and joint head of the gambling, licensing & regulatory team at Joelson discusses the past, present and potential future of the Dutch regulator.

When the Netherlands Gaming Authority (or Kansspelautoriteit) (“KSA”) was created in 2012 to regulate the new Dutch Remote Gaming Act, it was not envisaged that over six years later, it would still be sitting on its hands, with not a great deal to do apart from handing out fines to operators. This is because the Remote Gaming Bill authorising egaming passed through the Dutch Parliament in mid-2016 but has been stalled in the Dutch Senate
ever since.

In the meantime, the Netherlands remains in the internet dark ages, with egaming not only being illegal, but with the regulator actively enforcing outdated legislation.

In 2017, the Dutch online gaming market was estimated by the KSA to be worth €284.2m, with 500,000 residents regularly gambling online, around 3.5% of the population. But it has been doing the best it can to stamp out online gambling and has not just waited for the legislators to catch up.

The KSA has been particularly active fining operators over the last 12 months. Since mid-2017, it stepped up its enforcement activity against online operators in accordance with its revised “prioritisation criteria”. This policy stated that, in addition to fining operators who were clearly targeting Dutch customers with websites in Dutch, using .nl domains and advertising in Dutch TV and media etc, other operators would now face regulatory action.

Gambling websites displayed Dutch terms or symbols, such as clogs windmills or waffles were sanctioned, as were those offering customer support in Dutch or using Dutch focussed payment providers. The only way to comply according to the KSA was for operators to geo-block their websites in Holland. The KSA said it would no longer warn operators before issuing fines. Of course, many operators have been happy to take the risk.

As well as fining operators, the KSA has also been active in removing access to gambling apps and taking regulatory action against advertisers and payment providers promoting egaming to Dutch citizens.

At the end of 2018, the KSA announced it handed out a record €1.7m in regulatory fines to online operators during the year. These included well-known and internationally-licensed operators such as Betsson, Mr Green and William Hill. William Hill was fined €300,000 in December 2018 on the basis that its .com site featured a Dutch language option and allowed Dutch customers to access its customer service department. It also used a Dutch-facing online payment provider. William Hill announced that it would be appealing its fine and other operators are known to be appealing theirs.

These fines are effectively toothless, as it is expensive and complicated for the KSA to enforce them against international operators based outside of Holland. As such, most fines remain outstanding and are unlikely to be collected. However, it is possible that when licensing does start, payment of the fines will be made a precondition to being granted a licence. In addition, the KSA may decide to blacklist previously sanctioned operators.

All of this seems a bit excessive given that Holland’s legislation is out of step with much of Europe and probably breaches EU law regarding the freedom to provide gambling services. However, progress is now up in the air, because the Dutch Senate has recently indicated that it intends to debate the Remote Gambling Bill during the first quarter of 2019, with a view to approving the new legislation this year.

When retiring after 6 years as chairman of the KSA in 2018, Jan Suyver foresaw a legal online gambling market inthe Netherlands by 2023. Let us hope the Senate can make some progress before then. Soon enough it might be time for the KSA to start licensing operators rather than fining them. After all, the Betting and Gaming Act became law in 1964, before the internet was even invented.

This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.