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Applicants for a Dutch online gambling licence are often “amazed” and “quite shocked” at the level of detail required for a successful application, a Dutch gambling law attorney has said.
Even veterans of online gambling licensing applications in the United States and other European Union countries are surprised at complications, said Frank Tolboom of Kalff Katz and Franssen law firm.
Tolboom cited “quite onerous and intrusive” checks, such as reliability assessments and network diagrams, with investigations that were so rigorous, some clients decided not to bother applying.
Due diligence is not just on directors and shareholders, but also “policy makers”, he said.
It includes requests for information not only on other subsidiaries of the company but also companies in which the key officials might have a 50 percent or more interest, he said.
That could include investments by a private-equity firm a key official is involved in, plus outside, non-gambling companies that might not be interested in sharing details sought by the regulator, Tolboom said.
Dutch online gambling regulation is among the toughest in Europe, Tolboom and a colleague said in a webinar on Wednesday (January 19), and a Dutch regulator sitting in did not disagree.
So far, only 11 applicants have been approved, of 33 , according to attorney Justin Franssen, who called it “obviously a very low number”.
“Our regulator is very, very strict, and so is the legislation,” he said.
Franssen and Tolboom were speaking at a Gaming in Holland webinar, along with Geraldine Huijsson, head of licensing at the Netherlands Gambling Authority (KSA).
Huijsson outlined reasons why online gambling applications fail and said she would “not be surprised” if only 20-30 applications were approved in all.
“Don’t hold me to that,” she said.
She confirmed some applicants have been rejected, for reasons including “very incomplete” applications or falling afoul of provisions about soliciting Dutch residents without a licence.
Some of the rejections are in the “objections” stage; none have reached the appeals process, Huijsson said.
Mistakes made by applicants include not submitting all required documents, and general sloppiness, she said.
For example, in some cases, player registration policies differed dramatically from data submitted about actual registrations, she said.
Applicants also need to be careful about relying on third-party expertise, or experts that may not be as qualified as they claim, Huijsson said.
“I’m putting this mildly,” she told the webinar audience of about 200 viewers.
In any case, the applicant is responsible for submissions, not the outside consultant, she said.
On December 16, in what Franssen called a “bombshell” move, the lower house of parliament voted to support a motion calling on the government to ban untargeted advertising of “high-risk” forms of gambling.
The industry was “shell-shocked, how can that be, we had a lengthy political process and all of a sudden this U-turn”, he said.
Sander Dekker, the former minister for legal protection, had said it was too soon to restrict advertising, as it could be considered a key way to convert players on illegal sites to licensed sites.
If the Cabinet decided to implement such restrictions, they might take six months, which would put them into the third quarter, Franssen said.
If it became apparent, however, that secondary legislation needed to pass both houses of parliament to impose the suggested restrictions, the process might take several years, he said.
Franssen and Tolboom said the general application process could be streamlined if more guidance was offered in English.
One hurdle is that all information needs to be translated into Dutch, they said.
Webinars or information sessions similar to those held by the UK Gambling Commission would also be useful, they said.
Huijsson, however, said that although the regulator sometimes telephones or sends emails about minor technical matters, it can only be so helpful, as the application process is a “legal proceeding”.
