Category Archive: Netherlands

The Netherlands – Euro 400K fine for addressing Dutch market

Today, the Dutch Gambling Authority (“KSA”) announced that on 4 January 2019, it imposed a fine of EUR 400,000  on 1x Corp N.V. and Exinvest Limited, companies vested in Curacao and Cyprus.

The companies were  offering gambling services to Dutch consumers via several websites, such by means of having the websites (partially) in Dutch, using iDeal as payment method, etc., all such without having  licenses.

Both companies have appealed KSA’s decision.

 

Richard van Schaik

 

 

BREAKING NEWS: Dutch Senate votes in favour of the Dutch Remote Gambling Act

BREAKING NEWS: Dutch Senate votes in favour of the Dutch Remote Gambling Act

 

The Dutch Remote Gambling Act (Wet online kansspelen op afstand) has officially been adopted with a majority vote of 44 out 75 by the Dutch Senate!

It is safe to say that the adoption of the RGA was no small feat. In the last few weeks, it became clear that there was still uncertainty and quite a lot discussion among the different stakeholders. Nevertheless, a big step was taken today by the Senate. After more than 2.5 years, the Dutch gambling market will now officially open its doors for (licensed) operators of online games of chance.

Next to the vote with respect to the RGA itself, the Senate also voted on six different legislative motions from members of the Senate. These motions mainly aimed to introduce a pre-determined cooling-off period for “bad actors” (2 years or 5 years were suggested) and stricter rules for the advertisement of online games of chance (including a complete advertising ban). Based on the vote, a) a cooling off period of 2 years for bad actors has been accepted, b) illegal websites can be blocked, c) the Minster is forced to consider before 1 September 2019 whether a complete ban for advertising for remote gambling would be an option and d) the Minister must investigate whether enough prevention measures have been taken against “young problematic players”.

What does this all mean for gambling operators who are potentially interested in joining or expanding its activities to the Dutch market?

 

In short: Remote Gambling Act

The RGA provides for a licensed regime for the offering of online games of chance aimed at the Netherlands. For parties who wish to apply for such license, the following key highlights of the RGA are relevant:

 

  • Seat of the license holder – The license holder must have its principal establishment in any EU or EEA Member State. This obligation can be waived by the Board of Directors of the Dutch Gambling Authority (Kansspelautoriteit, “KSA”) if further conditions are satisfied. Furthermore, the license holder must be a public or a private limited liability company according to the laws of any Member State of the European Economic Area (EEA), or an European limited company;
  • Prevention of gambling addiction The license holder must implement measures to avoid gambling addiction, e.g. by identifying and adequately informing the players, monitoring their gaming behaviour, requiring a player profile which sets out the boundaries of that player and intervening where necessary. Where appropriate, operators must report a player with problematic gaming behaviour to the Board of Directors of the KSA for involuntary exclusion from participation in such games;
  • Central register 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. Furthermore, 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 behavior;
  • Access to the electronic meansOperators may be required to record and provide information and must give the supervisory bodies direct access to the electronic means used by them to organize the games;
  • Tax regime – a uniform tax rate of 29% applies for all games of chance, i.e. both land based games of chance and remote games of chances.
  • Compliance requirements – Furthermore, from the application it should be clear that both the requirement of the WoK are fulfilled, as the requirements from the Money Laundering and Terrorist Financing (Prevention) Act (“MLTFA“) are met. Also, 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. Appointment of a functionary or official in the organization that supervises compliance with the WoK and the MLTFA is required.
  • Additional requirements – All other regulations on restrictions, provisions, duration and assignability of the remote gambling licenses will be stipulated in the Remote Gaming Decree (RGD), which is currently still in draft version. We previously wrote an article with respect to the draft RGD, in which the main topics are set out. This includes, among others, requirements regarding the reliability of the holder of the license, the UBO’s and decision makers, the requirement to have a representative in the Netherlands to comply with rules regarding the prevention of gambling addiction, and advertising rules. As the draft RGD is a ministerial decree, no further votes will take place and it is expected that the final adoption will shortly take place by the minister.

Next steps

 

There are a few last steps to be taken in the legislative process: the final RGA will be signed by the King of the Netherlands, after which it will be ‘countersigned’ by the minister. After this, the RGA will be published (promulgated) in the Official Gazette. The date of entry into force will be regulated by a separate Royal Decree on the entry into force.

 

With respect to the license itself: it is not yet clear when exactly parties can apply for a license with the KSA and when the exact license requirements/application forms will be published. We received mixed information from the KSA in this respect (differing from summer 2019 to summer 2020). However, the KSA mentioned that more guidance will be published shortly.

 

We will continue to closely monitor relevant developments and will keep you further updated.

Ilias Abassi & Richard van Schaik

The Netherlands – Vote on RGA on 19/2, Privatization Holland Casino suspended

During the plenary session of the Senate today, it was decided that the final vote with respect to the Dutch Remote Gambling Act (“RGA”) will take place next Tuesday 19 February.

There was still too much uncertainty among the different members of the Senate, and the Minister was heavily questioned today on different parts of the RGA.

The main discussion concerned the cooling-off period, that is envisaged to be applied to gambling operators that have previously violated the Dutch gambling laws by actively targeting games of chance to the Dutch market. The Minister indicated that the prioritization criteria of the Dutch Gambling Authority will be leading to assess whether a gambling operator has previously violated the Dutch market (in short: use of the Dutch language, use of a .nl website,  use of IDEAL, etc). Furthermore, there was discussion with respect to the length of the cooling-off period. The Minister mentioned that he can support a cooling-off period of 2 years.

The second main point of discussion concerned the restrictions on advertisement of online gambling. It was questioned whether advertisement would be necessary to achieve the desired channelling rate. However, the Minister was pretty clear that he doesn’t not support further restrictions on the current proposed regime, as informing players through advertisements is – in his view – an essential part of achieving the desired channelling rate.

As one or more members of the Senate asked for a vote, the vote on the RGA will take place on 19 February 2019. We will of course keep you updated on the vote!

Finally, the Minister asked the Senate to postpone the vote on the privatization of Holland Casino, as there did not seem to be enough support from the Senate. The Minister will revert to the Senate in the last week of May 2019 with further information on how he envisages to present this act to the Senate (e.g., no expansion of the amount of casinos, privatization will take place at a later stage), after which a vote may take place.

 

Ilias Abassi and Richard van Schaik

 

NETHERLANDS – Minister hints to cooling off period for bad actors

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.

 

  1. 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.

 

  1. 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.

 

  1. 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

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

 

Netherlands: 5 February 2019 – D-Day Remote Gambling Act

Only a few more days to go: on 5 February 2019, there will be the hearing in the Dutch Senate on the introduction of the Remote Gambling Act (‘RGA’). This is more than 2.5 years after the Act passed the House of Representatives.

In principle, no changes to the latest draft are accepted anymore. This means that the RGA will either be approved or denied. If all parties agree to the proposal, no vote is required and the Act will pass. If one of the parties requires a vote, the vote will be on 12 February 2019.

DLA Piper will be attending the final vote, and we will immediately report the outcome.

 

 

 

Richard van Schaik

 

 

The Netherlands: Gambling Authority opens public consultation on draft “Supervisory Agenda 2019”

Earlier this week, the Dutch Gambling Authority (Kansspelautoriteit, “KSA”) published its draft Supervisory Agenda for 2019. The Supervisory Agenda is an annual document in which KSA outlines how it envisages to fulfill its supervisory role and its main objectives in the coming year, being consumer protection, the prevention of gambling addiction and the prevention of illegality and crime. Stakeholders are invited to provide their comments on the draft Supervisory Agenda by 11 February.

First of all,  KSA  “expects that in February 2019 the legislative proposal for the Dutch Remote Gambling Act will be adopted by the Senate”. On 5 February 2019, the plenary session by the Senate will take place during which the Dutch Remote Gambling Act will either be adopted or rejected. In light of this, it is interesting to see that KSA has already expressed its expectations on the outcome.

According to the draft Supervisory Agenda, KSA has set out the following risk themes for 2019: (i) participation by minors; (ii) prevention of gambling addiction; (iii) illegal offering of games of chance and criminality; and (iv) advertising / recruitment. For each of these risk themes,  KSA outlines which actions it has taken in 2018 and which actions it envisages to take in 2019. Looking ahead to the coming year, the key points are summarized below per risk theme:

  1. Participation by minors: Participation in games of chance by minors is legally prohibited in the Netherlands and one of the focus points of KSA. KSA shall continue its efforts to monitor the participation by minors in games of chance on a structural basis. Furthermore, KSA shall conduct further in-depth research into the risks of participation by minors and the underlying causes. With respect to online gambling, KSA mentions that the participation of minors is taken into account in the prioritization of enforcement action.
  2. Prevention of gambling addiction: KSA will continue its collaboration with several stakeholders (e.g. providers of games of chance, health care providers, research institutions) to encourage a better cooperation in the prevention of gambling addiction. Furthermore, KSA will continue to focus on providers of games with ‘loot boxes’, focusing on raising awareness among players, parents and the sector. Also, in 2019 KSA will publish guidelines with respect to the duty of care of gambling providers and shall monitor compliance with these guidelines closely.
  3. Illegal offering of games of chance and criminality: In 2018, KSA was already very active in the prevention of illegal offering of games of chance and imposed a record amount of fines amounting up to € 1.709.800,-. In 2019, KSA will continue to look for innovative possibilities to reduce the illegal offering of games of chance and to make them less accessible to the consumer. Special attention is given to participation by minors in illegal online offerings.
  4. Advertising / recruitment: In 2018, KSA took active enforcement action against license holders who advertised on websites which are (partly) aimed at minors. With a view to the expected entry into force of the Dutch Remote Gambling Act, measures are being prepared by KSA to avoid a disproportionate increase in advertising, e.g. through licensing requirements or clarification of open norms. This will be done on the basis of scientific research supplemented with experiences from foreign regulators. Lastly, KSA will continue its enforcement actions in 2018 against gambling advertisements aimed at minors.

After the consultation period has ended, KSA will consider the input received from stakeholders and publish the final version of the Supervisory Agenda on its website.

 

Ilias Abassi and RIchard van Schaik

Netherlands – Uncertainty remains for previous remote gaming violators

Netherlands – Uncertainty remains for previous remote gaming violators

 

Although last week, the Dutch Minister of Legal Protection published the Remote Gaming Decree (‘RGD’) for public consultation, i.e. secondary legislation to the new Dutch Remote Gaming Act,   uncertainty remains as to whether previous violations would prevent a successful application for a remote gaming license in the Netherlands.

 

In July 2018, the Minister clearly stated that previous violations of the Dutch gaming legislation would not automatically lead to a license to be denied, as such violation would not mean that that an operator is not reliable or irresponsible from the outset. Although previous violations do have a negative impact on the overall assessment, intention and future compliance must also be considered as well as for example the fact that the operator has licenses in other EU Member States. In other words, all aspects must be taken into account. Nonetheless, the Minster did emphasize already in July 2018 that operators that have been sanctioned by the Dutch regulator KSA, will not be eligible for a license when the remote gaming market will open up in the Netherlands. Further guidelines in this respect need to be developed by KSA.

 

In the explanatory memorandum to the draft RGD, the Minister further explains that previous violations – either in the Netherlands or abroad – can be a ‘heavy contraindication’ and is considered a reliability risk. However, the Minister states that for each individual violation the consequences for the reliability must be considered: “A minor and non-intentional violation committed has less value

than a deliberate, large-scale and long-term violation of the gaming legislation. It can also be important to what extent the operator has taken measures to prevent repetition.”

 

After this publication, the Minister met with the Senate’s Permanent Committee for Justice and Security. There, the Minster confirmed there that sanctions imposed do prevent obtaining a license. The Minister will ask KSA to further formulate procedures in this respect. These should also cover the period of time an operator will be excluded for obtaining a license

 

In other words, it seems to be clear that in case of previous sanctions imposed, operators won’t be able to immediately apply for a license; further guidance on the exact impact will follow. It is not clear though what the consequences will be for previous violations that haven’t been sanctioned. Given the Minister’s earlier statement in July, there may be hope for operators that have offered online games on the Dutch market but haven’t been sanctioned. Yet, we do see that in the past months, KSA has become really active in imposing new sanction. Uncertainty remains.

Netherlands – Secondary Legislation to Remote Gaming Act ready for public consultation

Finally, some movement with respect to the introduction of the Dutch Remote Gaming Act (‘RGA’).

Just before the summer break, the Minister of Legal Protection already announced that he wanted speed things up. He put his money where his mouth is, as last week, the Remote Gaming Decree (‘RGD’) was published for public consultation.

 

The draft RGD includes, other things, the following topics:

  • Licenses can be granted with respect to casino games (against other players or operators), and (sports and horse racing) betting. No licenses will be granted with respect to the organization  of lotteries.
  • Licenses will be granted for a maximum period of 5 years
  • Licenses will be granted within 6 months after application (which can be extended with another period of 6 months).
  • Main rule is that the operator needs to be based within the EU; however, under strict circumstances licenses may also be granted to operators outside the EU;
  • Strict rules apply with respect to the reliability of the holder of the license, the UBOs, the decision makers and the direct and indirect financiers, such based on their intentions, acts and behaviour in the past. More in particular, the following will be taken into account:
    • Gaming violations in the Netherlands and other jurisdictions;
    • Financial compliance with respect to sanctions and gaming tax;
    • Criminal, financial, tax or compliance records.
  • The license-holder must have a representative in the Netherlands in order to be able to comply with rules regarding de prevention of gambling addiction
  • Specific rules apply with respect to the operator’s landing page (e.g. only licensed games can be shown)
  • A separate administration must be in place with respect to the games that are licensed
  • An integrity policy must be in place  (including policies, proceedings and cooperation with other organizations to avoid match fixing)
  • A number of betting activities have been excluded from licenses, e.g. bets regarding an outcome that is negative or that can easily be manipulated (e.g. red cards) and bets regarding youth matches.
  • Prior to the acceptance of a new player the Central Register Gaming Exclusion be checked
  • A new player must always indicate the limits of its play behaviour, i.e. max. play limit, max. deposit, etc. and the operator must act accordingly.
  • Payment transaction between players and operator can only take place through a gaming account.
  • Further guidelines may come with respect to the appointment of an inspection authority regarding the games operated;
  • Advertising may not be addressed to people below the age of 24.

Operators and other stakeholders can provide their views before 6 November 2018.

Richard van Schaik

The Netherlands: annual report Gambling Authority – visible enforcement is “Achilles heel”

By Richard van Schaik and Róbin de Wit

Yesterday, the Dutch Gambling Authority (Kansspelautoriteit, “KSA”) published its 2016 annual report. The report provides some facts and figures with respect to 2016, as well as a forecast for the following years. A short overview:

  • The KSA will increase the level of enforcement, as it considers visible enforcement as the “Achilles heel” of a regulator. It confirms that if is fully ready to meet the 80% channeling degree to the legal online offer as envisaged by the Dutch government, meaning that the KSA will actively fight against illegal online operators.
  • The KSA stipulates that despite its efforts, fines imposed are difficult to collect. This is partly because a binding remedy to collect fines imposed on foreign illegal online operators is lacking, but also because offenders are often unable to pay because of debts issues. Despite this, the KSA takes several steps to improve the number of fines actually collected.
  • The KSA confirms its stricter enforcement strategy for the coming period to combat illegal online gambling. This means that the KSA will no longer issue a warning first but will take immediate enforcement measures. Such measures may involve fines of up to EUR 820,000 or 10% of the operator’s turnover. For more information, please read our earlier blog here.
  • It is expected that the KSA will also continue to put up barriers against third party service providers that provide services to illegal operators (such as payment service providers).
  • The KSA expects to grant a totalizator license in Q2 2017. For more information about the background of this procedure, please see our earlier blog here.
  • A number of charity lottery license applications are still being handled over the coming period. More background information can be found here.
  • The KSA will be closely involved in the revised casino regime, whereby Holland Casino will be privatized. Sixteen business locations will be sold and two additional licenses for new locations will be issued. The KSA will be responsible for granting the necessary licenses and will supervise the (feasibility of the) new regime. It is unknown when the new regime will kick off: the bill was adopted by the House of Representatives on 31 January 2017 and will now be handled by the Senate.

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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.

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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.

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