The Netherlands: Minster provides update on reform Dutch lottery market

On 5 July 2019, the Dutch Minister for Legal Protection issued a letter to the Dutch House of Representatives, elaborating on the future reform of the Dutch lottery market. In this letter, it was re-confirmed that the Dutch government wishes to modernize the Dutch lottery market. The Minister announced that the government wants to limit the risks associated with gambling, such not by means of limiting the amount of operators, but by means of setting rules and by supervision over compliance. Also, the  Minister expressed again that the government does not see organizing lotteries as a key government activity.

Current market

Currently, the Dutch lottery market is divided into three types of lotteries:

  1. Charity lotteries (including, currently, a mandatory 50 percent levy of the proceeds to be transferred to charity);
  2. the State Lottery (including a minimum amount of prize money and a mandatory levy on a percentage of the proceeds to be transferred the Dutch State); and
  3. Games of chance: the lotto and the instant lottery (including a minimum amount of prize money and a mandatory transfer of a percentage of the proceeds to be transferred to social causes/public interest).

The market for Charity lotteries is currently open to all operators; the other two markets are monopolized markets.

Principles for reform

In modernizing the Dutch lottery market, including the adoption of the Remote Gambling Act earlier this year, the Dutch government will take into account four principles in modernizing the Dutch lottery market.

Firstly, the societal and charitable function of lotteries will continue to exist. Consequently, the obligation to transfer a percentage of the proceeds to charities or other social causes will remain unchanged, although the exact percentage is subject to further research.

Secondly,  the Dutch government intends to safeguard a wide range of different types of lottery/game offerings, to be able to offer the public many choices and thus lowering the appeal of illegal lottery offerings.

Thirdly, the Dutch government will shift from an assessment of lottery games based on the type of games, to a risk-based assessment of lottery games, as it does not deem fit combining high-risk games (and higher risks for the public interest) with mandatory transfer of proceeds to charitable/social causes. The minimum age of 18 years for low-risk lottery games will remain in force.

Fourthly, research will be conducted as to the question whether there should be one common lottery market (possibly abolishing the three-way split of the current lottery market as described above), such in order to come to a level playing field.

The Minister announced that more news about the modernization of the Dutch gambling market will follow after further research has been. With respect to charity lotteries, the Minister already announced a concrete step.

Decrease of the levy for charity lotteries

In his letter, the Minster confirmed ­his earlier announcement that the mandatory levy of 50 percent of the proceeds for charity lotteries is envisaged to be decreased to 40 percent as of 1 January 2020. This decrease is subject to commitments from De Goede Loterijen –  the main operator in the field of charity lotteries – that the existing transfers to charities will maintain the same level.

Richard van Schaik and Sharif Ibrahim