Today, the Minister of Legal Protection provided his answers on the outstanding questions from the Senate regarding the draft Remote Gambling Act (“RGA”), asked earlier this week. The letter of the Minister including its answers has been published by the Senate and can be found here (in Dutch). A brief overview is provided below. As you will see, particularly interesting is that the Minister insists on applying a cooling-off period for previous “bad actors” and provides further clarity in this respect.
- Which “illegal” gambling operators will be subject to a cooling-off period when applying for an online gambling license, and on which legal basis?
Types of “illegal” gambling operators”
This was the most discussed question during the Senate’s plenary session earlier this week and raised the most concerns. The starting point of the Minister is clear: illegal gambling operators that will continue to actively target the Dutch market and recruiting players from the Dutch market, must be avoided. These are operators that e.g. use payment instruments such as iDeal, advertising aimed at the Netherlands or use a Dutch domain name. These gambling operators are referred to by the Minister as “cowboys”, and it seems that these cowboys will – in most cases – not be eligible for a license.
With respect to the operators that were active in the offering of illegal games of chance in the past, the Minister mentions that it can take away the doubt about their reliability during a consecutive period prior to the license application showing good behaviour (the “cooling-off period”). During this cooling-off period, the KSA can assess the behaviour of the applicant according to its prioritization criteria. Therefore, it is safe to say that such applicants are eligible for a license (provided that they meet all the criteria), but will need to undergo a cooling-off period during which they need to demonstrate good behaviour. No examples are given by the Minister of which (types of) illegal behaviour will give cause to the application of such cooling-off period.
Legal basis for the cooling-off period
With respect to the legal basis for applying such cooling-off period, the Minister mentions that games of chance have not been harmonized in a European context and Member States are free to determine their policy objectives in the field of games of chance themselves, e.g. by setting its own policy and own reliability requirements. In this regard, the Minister refers to Article 31(i) of the draft RGA (par. 1 and 5), on the basis of which the KSA will look at – among others – antecedents, organizational and financing structure, and more importantly: the actions of the license applicant in the past. Furthermore, according to the Minister the cooling-off period complies with the (stringent) conditions that apply to restrictions on the free movement of services (as defined by the Court of Justice of the EU), provided that the duration of the cooling-off period is also proportional.
- Regulating advertising
Furthermore, the Minister mentions that the strict advertisement regime for online games of chance set out in the draft RGA apply regardless of the medium, i.e. also for online advertising and advertising via social media. Also, advertising for online games of chance may not be made in games or on websites where games are offered. The deployment of individual athletes in advertisements is also forbidden, nor may product placement take place. For that reason, license holders are not allowed to use influencers or vloggers as, according to the Minister, the followers are predominantly minors or young adults. Specifically for television, no advertising is allowed between 6 o’clock in the morning and 7 o’clock in the evening. Furthermore, the Minister stresses out that the KSA will actively enforce the advertising requirements and that he shall, together with the KSA, closely follow developments in advertising immediately after the implementation of the RGA.
- Prevention of illegal gambling websites
Lastly: the Minister mentions that when it comes to enforcement of the RGA, administrative sanctioning is the starting point. In case of aggravating circumstances, violation of the KSA can be sanctioned on the basis of criminal law. As an ultimum remedium, Article 54a of the Dutch criminal Code can be used to block illegal websites. However, as there are sufficient instruments for the KSA on the basis of the RGA to block websites, the criminal enforcement measures will in practice not often appear. The administrative enforcement powers of the KSA are considerably expanded under the RGA. For example, the KSA can give binding instructions to payment service providers, marketing companies and other facility service providers, in order to e.g. directly block payment services to illegal providers.
During the next plenary session of the Senate, taking place Tuesday 12 February, it will become clear whether the Senate is satisfied with the answers given by the Minister and whether this leads to an adoption of the RGA. To be continued…..
Ilias Abassi and RIchard van Schaik