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The Netherlands – Vote will be next week; Minister forced to provide more details

Today, was an important day for the Dutch gambling sector: after more than 2.5 years, the Dutch Remote Gambling Act (Wet online kansspelen op afstand) reached the latest phase of the legislative process, during which the RGA could have been adopted. This would mean that the Dutch gambling market would embark on a new era by opening up its door to (licensed) online games of chance.

However, today it appeared that there is still a lot of discussion and uncertainty with respect to several aspects of the RGA. The plenary session has been suspended, as a majority of the Senate requested more clarity from the Minister of Legal Protection with respect to several questions that were not answered satisfactorily by the Minister. The Minister will provide written answers on these questions by means of a letter no later than this Friday. The last part of the plenary session will be continued next week, on Tuesday 12 February.

Next to the RGA, the Casino Regime (Modernisation) Draft Act was discussed by the Senate. This Act provides for the privatization of Holland Casino and a partial opening up of the casino market. The Senate will further discuss this draft Act during the session of next week, together with the RGA.

The key outstanding issues discussed by the Senate today – and to be answered by the Minster later this week – are the following.

  1. Can previous illegal operators obtain a license? The question that seemed to raise most discussion tonight is whether previous violations (i.e. illegal offering of online gambling in the Dutch market) would prevent a successful application for a remote gaming license in the Netherlands. In our previous article, we pointed out that the Minister of Legal Protection (the “Minister”) previously indicated that violations can be a ‘heavy contraindication’ and is considered a reliability risk, however also that for each individual violation the consequences for the reliability must be considered. In short: there was uncertainty on whether previous remote gaming violators will be eligible for a license. Tonight, the Minister provided some more clarity. The Minister explained that it envisages to make a distinction between the different type of license applicants: applicants that have never offered online games on the Dutch market, will in principle be eligible for a license if they meet the criteria. However, for applicants that have previously violated the Dutch gambling laws by offering online games on the Dutch market, the Minister stated that a cooling-off period is envisaged. This means that such applicants will only be eligible to obtain a license after the end of the cooling-off period, i.e. after the non-violating applicants. According to the Minister, this also applies to operators that are licensed in another country and de facto offer online games of chance to the Dutch market, e.g. due to the fact that Dutch players are involved in their games. The application of such cooling-off period was heavily criticized by several members of the Senate. In this respect, the Senate asked the Minister to provide clarity on the definition of an illegal gambling operator (that will be subject to a cooling-off period), and on which legal basis such cooling-off period will be introduced. During the debate, the Minister already indicated that the legal basis for such practice lies in the reliability exercise that will be conducted by the Dutch Gambling Authority (Kansspelautoriteit, “KSA”). However, the Senate required further clarity on this (also in light of European legislation), as it envisages that international gambling operators will contest such practice by the KSA.
  2. As second point, the Senate asked the Minister to provide clarity on the possibilities to limit online gambling advertising (other than on TV) and which enforcement measures the Minister can take in this respect, and on which legal basis. During the day, several discussions took place with respect to advertising. The RGA prohibits TV advertisements with respect to online games of chance to be aired before 19h, however the question was raised which measures are taken to avoid surreptitious advertising (e.g. online gambling advertisements that are part of other advertisements, such as sport ads).
  3. Lastly, the Senate asked the Minister to provide clarity on which measures will be taken and on which legal basis to combat illegal websites which offer online games of chance. The Minister stated that action can be taken against illegal website operators on the basis of Article 54a of the Dutch Criminal Code, however the Senate asked further clarity on how this article would be used as a legal basis for this purpose.

As mentioned, the Minister will provide written answers to the above mentioned questions this Friday.  The Minister already indicated today that it has the answers ready to these questions, but a majority of the Senate nevertheless requested a written answers from the Minister. The answers of the Minister will be discussed during the next plenary session of next Tuesday 12 February.

Further to the above mentioned points, the following topics were discussed today:

  • How will the channeling rate of 80% be met? – several questions were raised with respect to the channeling rate of 80%, which the Minister envisages to reach by the introduction of the RGA. It was not clear to several parties how this channeling rate will be reached. The Minister explained that research has been conducted, also based on the channeling rates of other countries that have regulated their online gambling market (e.g. Belgium, Denmark and Norway). The Minister explained that there are two main factors which are essential to reach the channeling rate: the amount of operators and the variety of games that can be offered. In this respect, the RGA does not include any limitations on the amount of licenses that can be provided (even though the Minister indicated that it envisages that approximately 40-45 licenses will be granted) and that in principle there are no limitations on the offered games (i.e. all games of chance can be offered online).
  • Will the RGA lead to more online gambling players and if yes, how will further gambling addiction be prevented? It was clear that several members of the Senate were concerned that the introduction of the RGA would lead to a significant increase of online gambling players, which may lead to heightened risks of gambling addiction. The Minister acknowledged this issue and could not exclude the possibility that there would be an increase of new players to the online gambling market, e.g. as a result of new advertisements in this respect. However, the Minister also stressed out that the RGA sets out several measures which are all aimed to prevent gambling addiction, and which should limit the accompanying risks of new players.
  • Is a licensing regime the most appropriate mechanism to combat illegal offering of online games? Lastly, a question that came back several times is whether the opening of the online gambling market – which is the most far-reaching option – is the most appropriate mechanism to combat illegal offering of online games. Several parties seemed to prefer a less ‘drastic’ solution, e.g. by offering the KSA with strengthened enforcement actions and possibilities to combat the current illegal offering.

 

We will continue to closely follow relevant developments and will keep you updated on the plenary session of the Senate next week.

Ilias Abassi and Richard van Schaik