Dutch Crackdown Demolishes 'Passive' Strategy For Gambling Licence

September 23, 2021
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A Dutch minister’s announcement that a passive presence in the Netherlands will no longer be allowed after licensing launches on October 1 has thrown the plans of international operators into turmoil.

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UPDATED: 13:20 – This article has been updated to more accurately reflect comments from a source at bet365.

A Dutch minister’s announcement that a passive presence in the Netherlands will no longer be allowed after licensing launches on October 1 has thrown the plans of international operators into turmoil.

From October 1, top brands such as William Hill, Mr Green, bwin, Betsson, Unibet, Bet-at-Home, LeoVegas and Casumo become “illegal providers” if they still have any Dutch customers.

Players on illegal sites are also eligible for fines of up to €8,700 and a criminal record, according to the Netherlands Gambling Authority (KSA).

Many international operators were already going to miss the October 1 opening of the market, but were quietly awaiting expiration of 33-month cooling-off periods, following a date when they might have been fined or deemed to be actively soliciting players.

But minister Sander Dekker’s letter to parliament instructing the KSA to launch an “intensification” of enforcement action against unlicensed operators will force those who do not want to face stiff penalties, and jeopardise their chances of getting a licence in the future, to pull out of the market completely.

The winners from this tough new policy are likely to be members of the trade group VNLOK, which include state-owned Holland Casino, Nederlandse Loterij and land-based arcade and racetrack operators, who are among the 28 licensing applicants.

Another possible winner is bet365, the UK-based betting giant that does not operate in the Netherlands, but applied for a licence in April, according to a source at the company.

“We are hopeful our licence will be approved,” the source said.

For those without a licence there will be no official transition period to legitimise efforts to wind down operations over a period of days or weeks, and penalties for violations will be beefed up on November 1.

Operators without a licence should already have pulled out of the Dutch market by October 1, but they have a higher chance of being fined after November 1, a KSA spokesman told VIXIO GamblingCompliance.

The spokesman did say that being caught operating passively in the Dutch market without a licence would not mean an automatic ban from ever applying for a licence, but would merit a fine.

Technically, nothing has changed. The Dutch government has always maintained that no one should be operating in the Dutch market without a licence.

But the KSA had previously set priorities for enforcement: if operators used Dutch language, typical Dutch symbols like windmills and clogs, or used popular Dutch payment service iDEA, they were prime targets.

Companies assumed if they met these standards and operated passively, did no marketing or advertising, they would be fine until they were eligible to apply for a licence, but the minister’s letter has ended that belief.

On November 1, fines for illegally offering games of chance rise from a basic €150,000 to a fine of €600,000, and operators with more than €15m in annual revenue could be fined 4 percent of revenue.

From October 1, players should withdraw their funds from illegal providers and move them to licensed operators, the KSA said.

A Betsson spokesperson noted that the company has said it will apply for a Dutch licence in February when its cooling-off period expires.

But given the minister’s statements, “we are currently evaluating the situation” to understand the government’s new reasoning, the spokesperson said.

“We believe that this changed approach undermines one of the primary principles behind the previously declared cooling-off period: channelisation of players into a regulated Dutch offer,” the spokesperson said. “It is too early to comment on what our course of action will be as of right now.”

Kindred Group, parent of the Unibet brand, said only that it has been compliant with the no-marketing, no-Dutch language rules, and planned to apply for a licence in the fourth quarter.

The Netherlands Online Gambling Association (NOGA) said it was “unpleasantly surprised” by the minister’s letter, which it believes is “wholly inconsistent” with the minister’s previous statements about channelisation of players to licensed sites as the focus of Dutch gambling legislation.

Right now, more than 90 percent of Dutch internet gamblers play on sites without a Dutch licence, said Peter-Paul de Goeij, managing director of the trade group, which includes Betsson, Kindred, bet365, Betway, Entain, Flutter Entertainment and LeoVegas as members.

The minister assumes players will stop gambling or switch to a licensed operator on October 1, “but I dare say that a large proportion of players will not switch to TOTO.nl, because let’s face it, otherwise they would have already played there long ago”, de Goeij said.

“These consumers will end up with gambling providers who promise golden mountains and mega bonuses,” he said.

“These kinds of companies do absolutely nothing to protect consumers,” de Goeij said. “So the only ones the minister is unwittingly doing a favour with here are the pitch black operators, who are now cheering. Ultimately, the consumer suffers as a result of this.”

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