Category Archive: Netherlands

Top 3 takeaways from DLA Piper gambling and tax event

Upcoming licensing regimes, strict sanctions and privacy compliance are among the regulatory changes discussed during the DLA Piper gambling and tax event. Read the rest of this entry »

The Netherlands: fines for online operator and directors

By Richard van Schaik and Róbin de Wit

Today, the Dutch Games of Chance Authority (“KSA”) published its decision to impose a fine of EUR 170,000 on a gambling company for offering unlicensed online gambling aimed at the Dutch public. Moreover, the company’s directors were also in person faced with a fine amounting to EUR 50,000 each.

Reason for the KSA to impose fines is that games – such as blackjack and roulette – were offered through a website using e.g. the Dutch flag and ‘the Netherlands’ as country option in the dropdown menu in the players account. Furthermore, the website was mainly set up in Dutch language. Using Dutch language is part of KSA’s prioritization criteria, meaning that enforcement by the KSA is initially focused on companies who, amongst others, offer gambling websites in Dutch language.

As the company had ignored the Dutch prohibition on offering online gambling as well as KSA’s warnings upfront, the KSA held that the company wilfully took the risk that sanctions would be imposed. Furthermore, the KSA took the opinion that the violations of Dutch gambling legislation could be attributed to the directors involved in person as they failed to take measures to prevent the violations, whilst they were reasonably required to do so. This gave cause for the KSA to also to fine the directors individually.

Notices of objection to the decision of the KSA can still be lodged.

Please click here for the report issued by the KSA.

DLA Piper Gambling and Tax Event before ICE Gaming Conference

Here is the opportunity of getting free gambling and tax law advice from DLA Piper lawyers of the hottest gaming jurisdictions of the moment.  Read the rest of this entry »

The Netherlands: totalizator licensing procedure now open to applicants – deadline December 30

By Richard van Schaik and Róbin de Wit

The first phase of the totalizator licensing procedure for the years 2017-2022 is open now and ends December 30, 2016. Yesterday, the Dutch games of chance authority (Kansspelautoriteit, “KSA”) revealed further details around the two-phased application procedure.

Phase 1

In the first phase, parties can show their interest by downloading and filling out online forms supported by necessary appendixes (e.g. recent certified extract from the Commercial Register and statement of good conduct). Further licensing criteria are defined in the downloadable application form.

Interested parties can be admitted to the official licensing procedure until December 30, 2016, 23:59. This is the closing deadline of phase 1.

Phase 2

The second phase of the licensing procedure will start mid-January 2017. During this phase, parties selected by the KSA during the first phase will be invited to present how they will implement and execute the totalizator license. Specific details as to the criteria are yet unknown. Eventually, the KSA will grant a license to one operator that will be allowed to offer horse and harness racing bets in the Netherlands.

Further details around the second phase will be revealed prior to its commencement early 2017.

Further information about the licensing procedure and any criteria connected thereto will be published on this blog as soon as it becomes available.

Please read our previous blog regarding the totalizator licensing procedure here.

The Netherlands – First charity lottery license granted

by Richard van Schaik and Róbin de Wit

Yesterday, the Dutch Gaming Authority (“KSA”) granted for the first time a license since the Amsterdam District Court forced the KSA to revise its current policy on lottery licensing and to open the market to new licensees. Lottovate Nederland B.V. has been granted a license, according to which 50% of the stake should be made available to charity.

Earlier this year, Lottovate successfully challenged the strict Dutch lottery licensing system, according to which only four licenses for so called charitable lotteries were granted up and until 31 December 2016 (see our blog about this case here). A license was denied to Lottavate when it initialy applied for it. However, Lottovate stated that the Dutch policy limits the freedom to provide services under the Treaty on the Functioning of the European Union. The Amsterdam District Court decided that KSA should have taken this account. As a result of this court case, KSA set policy rules, enabling operators to apply for a charity lottery license.

Lottovate’s license has now been granted for the period 22 November 2016 until 31 December 2016. On 31 December 2016 all existing charity lotteries licenses expire. Operators can already apply for licenses starting 1 January 2017. Guidelines about the requirements for a charity lottery license can be found here.

 

 

 

The Netherlands: regulator reveals totalizator licensing procedure

By Richard van Schaik and Róbin de Wit

 

Today’s news issued by the Dutch games of chance authority (Kansspelautoriteit, “KSA”) marked the kickoff of a phased totalizator licensing procedure. The KSA announced a transparent process in which a single license for horse and harness racing bets will be granted to a new license holder in the period 2017 to 2022.

On November 29, the KSA will officially publish the licensing procedure and further information in that regard on its website. From the information currently available, it appears that the procedure will consist of two phases.

Phase 1

During the first phase, subscribed parties will be judged by the KSA on the basis of pre-defined criteria to assess whether they are suitable to provide a reliable totalizator. Those parties who expressed their interest to offer horse and harness racing bets and who submitted the required information in time, will be assessed by the KSA on the basis of so-called knock-out criteria.

Phase 2

Subsequently, the parties selected by the KSA will be invited to present how they will implement and execute the totalizator license. Again, parties will be judged by the KSA on the basis of pre-defined criteria, after which one licensee will be chosed.

Subscribing to the procedure

Interested parties can be admitted to the official licensing procedure as from November 29 by downloading, completing and submitting the appropriate form, to be made available on KSA’s website. On that same day, the KSA will disclose the knock-out criteria that are of crucial importance during the first phase.

In order to be eligible for admission to the procedure, interested parties should at least hold the following documents:

  • A recent (< 6 months) digital certified extract from the Commercial Register of the interested party (or similar document from an EU / EEA country);
  • A recent (< 6 months) statement of good conduct (verklaring omtrent gedrag) for legal entities (or similar document from an EU / EEA country). Dutch entities can request such statement here.

Further information about the licensing procedure and any criteria connected thereto will be published on this blog as soon as it becomes available.

The Netherlands: gambling apps successfully banned

By Richard van Schaik and Róbin de Wit

Following its announcement that gambling apps would be taken under investigations, the Dutch Gaming Authority (Kansspelautoriteit, “KSA”) now succeeded to remove these apps from online stores.

The KSA took action against gambling apps with cash deposit and payments, the so-called “real money gambling apps”. In total, 55 of such apps were identified by KSA and can no longer be downloaded from Dutch accounts. Nonetheless, some gambling apps that were previously downloaded by Dutch users can still be used. The KSA declared that such use will be further monitored over the coming period.

Although the action against gambling apps was supposed to be a temporary task, the KSA announced that the monitoring of gambling apps is now a standard task of the KSA as part of its supervisory activities.

BREAKING NEWS: Dutch Remote Gaming Act adopted by Parliament

By Richard van Schaik & Róbin de Wit

 

Today, the Dutch parliament finally passed the bill on remote gaming, enabling interested operators to obtain a long-awaited license to enter the Dutch market.

One of the hot topics in Parliament was the tax rate. Eventually Parliament agreed upon a 29% tax rate, which rate is also applicable to land based gaming.

The bill creates the basis for a license, so that Dutch players can safely and responsibly participate in online gaming. Strict license requirements will apply, which will better protect players against, amongst other things, gambling addiction.

Still, the bill had to pass the Senate. If the Senate approves the bill, it is expected that a license for remote gaming can be obtained as from Q2 2017.

More details will follow soon.

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.

The Netherlands: regulator signs cooperation agreement with Financial Markets Authority

Yesterday, the Dutch Gambling Authority (“KSA”) reported that it entered into an agreement with the Netherlands Authority for the Financial Markets (“AFM”) to cooperate in the implementation of the Financial Supervision Act (Wft), Money Laundering and Terrorist Financing (Prevention) Act (Wwft) and the Betting and Gaming Act (Wok). The authorities intent to cooperate and to exchange information in order to prevent any overlap in activities to be carried out within the framework of the abovementioned acts, which is aimed to be beneficial to the quality of the two supervisory domains.

The Netherlands: regulator investigates online gambling apps

By Richard van Schaik and Róbin de Wit

 

Today, the Dutch Games of Chance Authority (“KSA”) announced that it will take gambling apps on further investigation over the coming months. The ultimate aim is to get these apps, including and any references thereto, removed from app stores and gambling websites.

The reason for KSA’s further investigation is a visible increase in the use of gambling apps. Research shows that early exposure of children to games that stimulate gambling may lead to problematic gambling behavior at a later stage. Now that these apps are easily available for young persons and sometimes even free of charge for a certain period of time, the KSA finds it of utmost importance to put a halt to the offer of gambling apps and take enforcement actions where appropriate.

Gambling companies operating the apps, as well as operators of platforms where these apps can be downloaded, should remove both the apps as well as any references thereto on websites. The KSA will investigate whether such operators act in accordance with the Dutch Betting and Gaming Act. If they don’t, enforcement actions might follow.

Initially, the KSA will focus on gambling apps with cash deposit and payments, the so-called “real money gambling apps”. End of April, the KSA identified 49 illegal real money gambling apps, which will be further monitored and investigated by the KSA over the coming period.

 

The Netherlands: court rejects appeal against fines for offering online gambling

By Richard van Schaik and Róbin de Wit

 

This week, a court judgment was published in which an appeal against a decision to impose a € 130,000 and € 50,000 fine for offering online gambling targeted to the Netherlands was rejected. The Dutch gambling regulator (Kansspelautoriteit, “KSA”) imposed such fines back in 2014 for violation of the Dutch Betting and Gaming Act (“Act”). The subsequent administrative objection initiated by the violators was rejected in 2015.

Claims of the action

The violators (plaintiffs) brought the action before the district court The Hague, alleging that:

  1. One of the plaintiffs could not be regarded as offender of the Act;
  2. The Act is nonbinding due to conflicts with the principle of freedom to provide services under EU law; and
  3. KSA’s enforcement policy is arbitrary, ambiguous and contrary to the principle of equality.

Judgment court

In short, the court rejected all claims by ruling as follows.

  1. The court considers both plaintiffs to be an offender of the Act, since they were closely interrelated. There was not only a shareholder relationship, but both plaintiffs were mentioned on the illegal gambling websites at stake. Besides, the KSA imposed a significant lower fine on the plaintiff that was less involved in the illegal actions.
  2. Furthermore, the court ruled that the Act cannot be considered contradictory to EU law. Member States are in principle free to determine the objectives of their national gambling policy and to define the desired level of protection of national players. In this context, the court notes that the Netherlands currently does not grant licenses for offering remote gambling.
  3. Lastly, the court notes that plaintiffs indisputably met one or more of KSA’s prioritization criteria at the time of the warning letter sent by the KSA. Due to failure to comply with KSA’s requests, it was entitled to take enforcement actions accordingly. Moreover, the court had taken the seriousness of the violation (e.g. number of games offered, prize / bonus amounts) and the degree to which the violation could be attributed to plaintiffs into account where the amount of the fines are concerned. Therefore, the court held that the facts and circumstances of the case do not proof that the fines imposed were disproportionately high.

In conclusion: the appeal with respect to KSA’s decision to impose fines was rejected as unfounded. Please find the full decision here.

The Netherlands: regulator warns online providers in anticipation of sports summer

Richard van Schaik, Róbin de Wit

Last week, the Dutch Gaming Authority (Kansspelautoriteit, “KSA”) announced that it warned online gambling operators about the fact that it is still not permitted to target the Dutch market under the Betting and Gaming Act. This prohibition applies to offering online games of chance, as well as advertising sport bets for e.g. the European Championships. Reason for alerting the operators is that the KSA received signals that operators are currently making preparations with respect to gambling related advertising. Naturally, the KSA wants to avoid that the sports summer is used for (massive) online advertising and luring players to the unregulated and illegal side of online gambling in the Netherlands. Important to note is that the KSA emphasized that operators who do not comply with the Dutch rules may be subject to serious sanctions and put the possibility to obtain a future license under the upcoming regime at risk. With such license, gambling operators may legally offer remote games of chance targeted to the Dutch market once the revised Betting and Gaming Act has entered into force.

Sponsor deal puts further pressure on tax rate in the Netherlands

By Róbin de Wit and Richard van Schaik

This morning, a national Dutch newspaper reported that Unibet entered into a sponsor agreement with the Royal Dutch Cycling Union. As promoting gambling is still prohibited in the Netherlands, the agreement can only come into force once the new online gambling legislation has been introduced.

According to the newspaper, Unibet set two important conditions to the sponsor agreement. Firstly, the contract is subject to Unibet obtaining a license to operate in the Netherlands. Secondly,  the tax rate of 29%, the rate mentioned in the proposed legislation, should be lowered to 20%.

The second condition is remarkable and creative, as this puts indirectly pressure on Dutch government to lower the proposed tax rate, especially given the fact that the most recent signals from the government, indicate that the tax rate will start at 29% and might ultimately decrease to 25%. However, a final decision in this respect is still pending.

The Netherlands: government parties proposes uniform tax rate for online and land based gaming

By Richard van Schaik and Róbin de Wit

Today, it was announced that the coalition parties VVD and PvdA have jointly submitted a proposal to bring the tax rate applicable to future remote gaming to the same level as the rate applicable to land based gaming (29%). If the total tax revenues increase as a result of the growing market size of online gaming, it is expected that the tax rate will be reduced to a uniform 25% rate within a three-year timeframe. This proposal is contrary to the initial plan of the government to implement a differentiated tax regime, whereby a 20% rate would be applicable to remote gaming.

This news is striking now that only a couple of weeks ago, the Dutch State Secretary for Security and Justice confirmed the proposed differentiated tax regime in his answers to the second round of parliamentary questions regarding the upcoming Dutch Remote Gaming Act. So far, this differentiated regime has received much resistance. See our earlier blogs in this respect here and here.

The Netherlands: State Secretary insists on differentiated tax rate online gaming legislation

By Richard van Schaik and Róbin de Wit

 

Today, the long-awaited answers of the Dutch State Secretary for Security and Justice, mr. Dijkhoff, to the second round of questions regarding the upcoming Dutch Remote Gaming Act (“RGA”) were published.

In this memorandum of reply, Dijkhoff provides answers to several topics related to the RGA bill. Among these topics, the proposed differentiated tax rates applicable to remote and land based gaming operators is addressed.

Recap: proposed tax regime under RGA

Under the RGA, a tax rate of 20% has been proposed for legal remote games of chance. For land based gaming, the tax rate will continue to be 29%. According to the Dutch government, this lower tax rate for remote operators must further strengthen their position and must contribute to achieve the highest degree of channeling as possible. Increasing the rate for remote gaming will have large negative consequences for the desired channeling degree (80%), now that this will increase the risk that Dutch players massively turn to (more attractive) illegal sites.

Resistance differentiated regime; parliamentary questions posed

Although a 20% tax rate is considered suitable for remote operators, there have been calls to bring this rate to the same level at the tax rate applicable to land based operators in order to avoid improper competition. Also, there have been voices to amend the future tax rate to 24% or 25% for both online as well as land based operators. Furthermore, the relationship between the differentiated tax rates and achieving the envisaged channeling degree was doubted.

Further to this resistance, members of the parliament posed tax related parliamentary questions in May 2015. Please read our earlier blog in this respect here.

Reponse Dijkhoff: insisting on proposed regime

In summary, Dijkhoff’s answers show his persistence with respect to the proposed differentiated tax regime for remote and land based gaming. His reasoning is based on the fact that future remote gaming licensees have to compete with illegal operators that do not pay gaming taxes. Research results show that there is a direct connection between the costs operators have to incur and the degree of channeling. Also, practice from other EU countries shows that a tax rate of 20% is the upper limit to achieve the channeling objectives set by the Dutch government. Hence, Dijkhoff considers a differentiated rate necessary to keep costs for future legal remote gaming operators to the minimum, so that in the short term a substantial degree of channeling can be achieved.

Furthermore, Dijkhoff holds the opinion that lowering the tax rate for land based operators is not an option. Even if the tax rate for land based gaming operators is reduced by 1% (to 28%), great budgeted losses will be suffered by the state treasury.

Whats next?

This long-awaited memorandum of reply is the next step in the legislative process of the RGA. It is now up to the Dutch parliament to hold plenary debates on the substance of the bill. It is expected that the RGA will enter into effect in 2017.

The Netherlands: regulator signs cooperation agreement with 19 EEA-jurisdictions

By Richard van Schaik and Róbin de Wit

 

Last week, twenty gambling regulators – amongst which the Dutch gambling authority (Kansspelautoriteit) – signed a cooperation agreement that provides a controlled and intensified exchange of information between the jurisdictions involved. This cross-border information exchange will consist of e.g. information regarding gambling operators, licensees, consumer protection and the prevention of gambling related fraud. Ten other jurisdictions will become a party to this cooperation soon.

The general idea behind this agreement is that member states need to join forces in order to successfully address cross-border aspects and issues related to gambling. The upcoming Dutch licensing system – for which the Dutch gambling authority is currently making necessary preparations – provides for a basis for international administrative cooperation with foreign supervisory bodies. Now that the jurisdiction of the Dutch gambling authority is limited to Dutch territory, international cooperation is of the essence to ensure compliance with the future Dutch Remote Gambling Act and its enforcement.

The text of the cooperation agreement will be published on the Dutch gambling authority’s website soon.

The Netherlands: highest fine in history for online gambling, regulator urges for new legislation

By Richard van Schaik and Róbin de Wit

 

Today, the Dutch Games of Chance Authority (“KSA”) published its decision to impose a total fine of almost EUR 500,000 on two gambling operators for offering online gambling aimed at the Dutch public.

The companies operating the gambling website at hand were subject to investigations carried out by the KSA during November 2014 – March 2015. Cause for the investigations was that the operators advertised the gambling offer through Dutch websites. During the investigations, the KSA became aware of several indications revealing that the Netherlands was targeted: games were offered in Dutch language, iDEAL was an available payment method and a Dutch flag / button was presented. Furthermore, the website’s terms and conditions stated that a free welcome bonus was offered to players from the Netherlands. All this is still strictly prohibited under Dutch law.

Interestingly,  the operators involved already had been fined by the KSA in the past. In October 2014, both operators were fined EUR 130,000 each. Hence, the KSA decided to impose a deterrent amount with respect to the current infringement. Both operators still have the opportunity to object against the fines imposed.

The case concerned shows that the KSA keeps on moving forward by monitoring online operators, amongst which former offenders. At present, operators that wish to be active on the Dutch market cannot apply for a license in the Netherlands. However, this is likely to change in 2017. As far as a license under the future regime is concerned, it should be noted that licenses for remote gambling may be refused by the KSA in case of ongoing violations of the Dutch regulations. Therefore, it is recommended that current operators do not come to the attention of the KSA and that if they do, that the KSA’s demands are complied with within the set timeframe. Otherwise, the operator involved could face negative consequences.

The Netherlands: amount of fines for illegal online gambling will increase as from 1 August 2015

By Richard van Schaik and Róbin de Wit

 

The Dutch Games of Chance Authority (“KSA”) announced that it will amend the amount of fines applicable to the illegal provision of online gambling as from 1 August 2015.

The basic amount – being the minimum fine that may be imposed – increases by 50%, from € 100,000 to € 150,000. This increased amount is applicable to all cases dealt with by the KSA as from 1 August 2015. Furthermore, this amount may either be increased in case of aggravating circumstances (e.g. a previous warning issued by the KSA), or reduced if there are mitigating circumstances (e.g. limited capacity of the offender). All will depend on the circumstances at hand.

Factors that will be taken into account by the KSA in determining an appropriate amount are, amongst other things, the number of illegal websites involved, the maximum prize that can be won and the number of games offered. In any case, the amount must be sufficiently deterrent for both the offender (special prevention) as well as potential offenders (general prevention).

For reasons of transparency, the KSA will publish detailed fining policy rules on the website soon.

The Netherlands: fine for gambling operator, software supplier as well as directors involved

By Richard van Schaik and Róbin de Wit

 

The Dutch Games of Chance Authority (“KSA”) has published its decision to impose a EUR 180,000 fine on a gambling operator, its software supplier and the software supplier’s directors for offering online gambling targeted to the Netherlands.  This was done through 14 websites using Dutch language and the Dutch flag. Hence, the websites were clearly targeted to the Netherlands, which is prohibited under Dutch gambling law. Read the rest of this entry »

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