Three Dutch lotteries currently holding a license for organizing charity lotteries (the Nationale Postcode Loterij, BankGiro Loterij and Vrienden Loterij have expressed their wish to pay less to charitable organizations. Given the expected opening of the Dutch online gambling market, current license holders fear for their income.
Yesterday, they requested the Dutch State Secretary of Justice a reduction of the compulsory charitable contribution from 50% to 40%.
The Dutch lotteries emphasize that lowering the deduction percentage is not necessarily detrimental to payments to charity. Firstly, less contribution means that a higher amount will be left for prizes, as a result of which lotteries will become more attractive to consumers. Consequently, the total turnover will increase. Secondly, the charitable contribution made by two other Dutch lotteries (State Lottery and De Lotto) of 16% respectively 18% will be brought to the same level of 40%.
This reduction is proposed in order to stay competitive, since Dutch government aims to reform the gambling market drastically. The Netherlands are currently preparing to open their (online) gambling market to global competition in 2015 by means of a new Remote Gambling Act. As a result, foreign providers will have the chance to obtain a license if they meet the requirements under this upcoming legislation. According to this new act providers may be required to make payments to charitable organizations in the form of a minimum contribution percentage (Article 31g). A number of foreign providers that hope to obtain a position in the Dutch gambling market already indicated that they are willing to donate a certain percentage of their revenue in the Netherlands to charitable causes (e.g. Tipp24 offered to donate 40%).
Please refer to our earlier blog regarding the current status of the proposed Dutch Remote Gambling Act: http://blogs.dlapiper.com/all-in/2014/03/07/netherlands-text-of-the-dutch-online-gambling-bill-published-earlier-than-expected/.
Should you require any further (detailed) information on the above, please do not hesitate to contact our DLA Gambling Team in the Netherlands – Richard van Schaik (email@example.com), Prof. Jan Kabel (firstname.lastname@example.org), and Róbin de Wit (email@example.com).