Netherlands: Remote Gambling Act issued – consultation procedure ends 21 July 2013

Today (22 May), the long-awaited legislative proposal for the Dutch Remote Gambling Act has been released. This Act stipulates under which conditions online gambling will be allowed in the Netherlands. This Act amends the current Betting and Gaming Act (in Dutch: Wet op de Kansspelen, hereafter: “WoK“).

Current status Dutch gambling policy

Currently under the WoK it is prohibited to organize games of chance without a license, or to promote participation therein. No licensing conditions have been published. Per game of chance only one operator has been granted a license. The current (multi-year) license holders are: De Staatsloterij, Holland Casino, De Lotto, De Nationale Goede Doelen Loterijen, De Samenwerkende Non-Profit Loterijen, Sporttech Racing B.V. The WoK does not regulate the online gambling market (thus rendering the offering of online games to the Dutch public illegal), although the current license holders have been allowed to offer online games under their licenses.

Background to legislative proposal Remote Gambling Act

The Dutch policy on gambling has been under scrutiny over the past decade, not in the least because it has been the subject of prejudicial questions before the European Court of Justice (“ECJ“) and in legal proceedings before the Dutch Supreme Court and the Administrative Jurisdiction division of the Council of State in Ladbrokes v. De Lotto and Sporting Exchange v. Betfair. Remarkably, even though the ECJ included in its review framework the principle of transparency and the requirement that a restrictive policy should be applied in a coherent and systematic manner, the Dutch courts did not come to the conclusion that the Dutch gambling policy is contrary to the freedom to provide services (Section 56 of the EU-Treaty). Still, last year the Dutch government announced, in spite of the court decisions, a change of course in the betting and gaming policy. More in particular, the privatization of Holland Casino and the regulation of the online market were announced on several occasions.

Remote Gambling Act

Today, the proposal for the Remote Gambling Act was issued for the so-called internet consultation. The Remote Gambling Act aims to:

• regulate remote gambling (online games of chance);
• create a central register for the exclusion of games of chance;
• expand the enforcement instruments of the Games of Chance Authority;
• adapt the tax arrangements, including a differentiation of the tax on games of chance.

For parties who wish to apply a license to offer online games of chance aimed at the Netherlands, the following from the proposed Remote Gambling Act is relevant:

• The applicant should have its (a) principal establishment in the European Union, or (b) in a state appointed by the Minister of Justice as guaranteeing an adequate level of protection of the interests that the WoK aims to serve;

• The applicant should have an “appropriate” legal status: an equivalent of the Dutch private limited company (in Dutch: B.V. or N.V.);

• A central register for the exclusion of participants to games of chance will be created. The license holder that may offer remote gambling cannot allow the participation of an individual that has no subscription with the license holder, firstly. Further, the license holder cannot allow persons (a) under 18, or (b) that have an entry in the central registry for the exclusion of games of chance, (c) that have indicated (at their own initiative) that they have overstepped the borders of their gambling behaviour.

• The tax on games of chance will be differentiated: 29% for land based providers, 20% for remote providers;

• There will be a levy for exploitation of the license, that will be published by Ministerial Decree;

• A contribution to Charitable Organizations may become obligatory – this will also be stipulated by Ministerial Decree;

• All other regulations on restrictions, provisions, duration and assignability of the remote gambling licenses will be stipulated in a (forthcoming) governmental decree (in Dutch: Algemene Maatregel van Bestuur, hereafter “AMvB“).

In addition the following applies:

• In the application for a licence, the applicant should especially consider all the rules and regulations stipulated in the Money Laundering and Terrorist Financing (Prevention) Act (“MLTFA“). From the application it should be clear that both the requirement of the WoK are fulfilled, as the requirements from the MLTFA are met, and that compliance with these laws by the applicant are effectively supervised;

• The applicant needs to show it soundly manages its organization of the games of chance, in such a way that the supervision on the compliance with both the WoK and MLTFA is warranted. Thereto the applicant is required use appropriate means, processes and procedures that:

(a) comply with the technological and operational standards for safety, confidentiality, fairness, continuity, verifiability and appropriateness, that will be stipulated in a (forthcoming) AMvB;

(b) have accredited by the Dutch Accreditation Council or another national accreditation council that is acknowledged in EC-Regulation 765/2008;

• The applicant is required to appoint a functionary or official in its organization that supervises compliance with the WoK and the MLTFA;

• The applicant should be able to vouch for all its personnel. Decision makers in the organization should be reliable and meet the integrity criteria set out in Public Administration (Probity Screening) Act (in Dutch: Wet BiBob).

Other changes WoK

The Remote Gambling Act also contains amendments to other elements of the Wok. For example, poker will also be covered by the general prohibition of article 1 WoK. Other amendments include an extension of requirements for current licence holders, and requirements for participants of games of chance.

Next step – internet consultation procedure

From now until 21 July 2013, all stakeholders are invited to post their comments on the proposal. The aim and purpose of the internet consultation is to get a clear sight of the enforceability, of best practices, of room for improvement and of other interests that may be affected. After the consultation, the reactions will be taken into consideration and may also lead to adjustments in either the proposal itself or the Explanatory Memorandum (“Memorie van Toelichting”).

Should you require any assistance in drafting your comments to the Remote Gambling Act or 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 (richard.vanschaik@dlapiper.com), Prof. Jan Kabel (jan.kabel@dlapiper.com), and Marloes Dankert (marloes.dankert@dlapiper.com).