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The Netherlands: important updates lottery market

By Richard van Schaik, Róbin de Wit, Cees Plaizier

 

A judgment rendered by the Amsterdam District Court in May this year prompted the Netherlands Gaming Authority (“KSA”) to revise its current policy on lottery licensing. Under this policy, the KSA applied a restricted regime: only four licenses for so called charitable lotteries were granted up and until 31 December 2016. Therefore, applications of lottery services providers that fell outside the scope of these current four license holders were always rejected by the KSA.

 

Background judgment

Lottovate Netherlands, a Dutch charitable lottery applicant, was left empty handed after KSA’s lottery license rejection. Lottovate did not give up: it challenged the Dutch restricted regime in court, arguing that the lottery policy limits the freedom to provide services under the Treaty on the Functioning of the European Union. The Amsterdam District Court declared Lottovate’s position well-founded, ruling that the KSA did not sufficiently examine Lottovate’s license application in view of the Treaty. In addition, a sufficient justification for maintaining a restricted regime and the subsequent rejection of Lottovate’s application was lacking.

Hence, the license application of Lottovate will be taken into reconsideration by the KSA. Also, other newcomers who wish to operate a charitable lottery in the Netherlands can apply for a license. If such license(s) is/are granted, the term of the license will be equal to the current four licenses granted, i.e. up and until 31 December 2016.

 

New lottery regime and consultation

As from 1 January 2017, a revised lottery regime will enter into force and new charitable lottery licenses will be in place. Although it is still unknown how the regime will look like, the KSA is currently preparing itself for the granting of licenses commencing 1 January 2017. In order to enable prospective lottery providers to prepare for operating a charitable lottery in the Netherlands, the KSA launched a public consultation concerning the application process for licenses that will be part of the new lottery regime. Two documents are presented in the consultation: a draft lottery license application form and a draft model license. A response to the content thereof can be send up and until 19 July. Please click here for more information on the website of the KSA.

The KSA committed itself to take a final decision with respect to all applications for licenses commencing next year by 1 October 2016. This means that the KSA will handle such applications by August 2016.

 

Opportunities for newcomers

The aforementioned developments offer interesting opportunities to lottery services providers seeking to enter the Dutch market. By taking part in the public consultation, influence could be exerted on the new licensing procedure and the scope and implementation of license provisions. Also, future providers can start organizing their application and their lottery business pending the new regime. The State Secretary for Security and Justice announced that further details of the upcoming charitable lottery regime – taking the Lottovate judgment into account – will be presented in due course.