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UPDATE 10:08 - Story updated to include a statement from Flutter confirming it was also leaving the market.
Major online gambling operators are starting to comply with Dutch government demands to leave the market until they get a licence, as a consumer agency pulls out of talks over a proposed gambling advertising code.
In a press release delivered overnight, Kindred Group said it will temporarily leave the Dutch market while it plans to “seek further clarification”, apparently reversing an earlier reported stance in which it would have stayed while it prepares a licence application.
Earlier on Thursday, reports surfaced that the Stockholm-listed online gambling operator believed it was sufficient that it met the Netherlands Gambling Authority (KSA) prioritisation criteria, which include not using Dutch language or traditional Dutch symbols such as windmills.
In its late-night press release, Kindred maintained: “It is Kindred’s view that the letter from Minister Sander Dekker does not explicitly request operators to cease services towards Dutch citizens as long as the prioritisation criteria published in 2019 are followed.”
But a 6.5 percent drop in Kindred shares on Thursday to 132.45 Swedish kronor may have convinced it not to press that view, which has not been voiced by other operators. In contrast, rival Betsson shares were little changed at SEK72.6.
The Netherlands minister’s letter last week urging regulator “intensification” of enforcement against unlicensed companies has upended assumptions that companies could continue operating passively while preparing a licence application, and giving a hit to earnings forecasts.
Betsson, Entain and LeoVegas all said on Thursday they will pull out, with the legalised online gambling market otherwise opening for business today.
Kindred will take the biggest hit announced so far, losing out on £12m per month in EBITDA. In contrast, Betsson said the monthly impact would be SEK25m (£2.12m).
“Betsson operational subsidiaries have always been committed to making the adjustments required for attributing to the channelisation objectives of the regulator, as well as putting themselves in a good position for the Dutch licensing process,” the Stockholm-listed company said.
Separately, the Dutch Consumers Association said it has suspended its cooperation with the Advertising Code Foundation over a proposed advertising code for online gambling, as it said the proposed code “offers too little protection to vulnerable groups and against gambling addiction”.
The association claimed the code would allow advertising to reach children and young adults as long as they do not constitute 30 percent of the target audience.
“An advertising code must contain agreements that exceed the statutory requirements, so it should be stricter than the law,” said director Sandra Molenaar. “But the code the industry is now proposing offers less protection rather than more. Then it's no use to you.”
“The gambling industry proved unwilling to change the code, but just wanted to cite our criticisms in a footnote,” she said. “That is completely insufficient.”
The proposed code has already drawn controversy, with the Netherlands Online Gambling Association complaining that it was frozen out of negotiations led by rival group the Licensed Dutch Online Gaming Providers (VNLOK).
VNLOK did not respond to requests for a response.
Elsewhere, both LeoVegas and Entain said they were ending services to Dutch residents by today, with both planning to apply for a licence before the end of the year.
The Netherlands has accounted for a “low to mid-single digit share” of total revenue in recent quarters, the Stockholm-listed LeoVegas said. Entain said the withdrawal will cost it about £5m per month in EBITDA.
Flutter Entertainment, parent of PokerStars, Betfair and Paddy Power, said confirmed to VIXIO GamblingCompliance it was leaving the market.
"In line with the recent policy changes announced by the KSA last week, residents in the Netherlands will no longer be able to access our products as of 1 October. We remain committed to submitting a licence application in due course," a spokesperson said.
Its Dutch revenue may not be significant enough to force an official statement, as it previously said that no single unregulated market is more than 1.5 percent of revenue.
Frankfurt-listed Bet-at-Home said it is consulting with its attorneys as it considers its next move.
Germany-focused Tipico, which was fined by the KSA only last week, did not return an email requesting comment in time for deadline.
The situation, however, may not be entirely bleak.
KSA chairman Rene Jansen has repeated assertions that operating in Netherlands without a licence would not automatically exclude an operator from getting a licence, as long as any fine is paid.
He made these remarks in a panel discussion at iGB Live conference in Amsterdam on Thursday, according to Casinonieuws, a Dutch gambling news website.
