Summary of Advice on the Online Gaming Bill
PUBLICATION DATE: Wednesday the 23rd of July 2014
ADVICE DATE: Wednesday the 7th of May 2014
Translation by Gaming in Holland
The Advisory Department of the Council of State issued its opinion (advice) on the Bill amending the gaming Law, the Law on gaming tax and other Laws regarding the organization of remote gaming. The Bill was submitted to the House of Representatives on the 23rd of July, 2014. This also made the opinion (advice) of the Advisory Department of the Council of State public.
The Bill amends the gaming Law (DUTCH – Wok (Wet op de kansspelen)), the Law on gaming tax and other laws regarding the regulation of remote gaming. The bill stems from the coalition agreement. Online gaming is currently prohibited in the Netherlands. The Bill introduces the possibility of offering online gaming. These are gambling games in which the player can participate by electronic communication means and without physical contact with the gaming organizer.
The Advisory Department is aware that the legislator faces a difficult choice. A choice between maintaining the ban on online gaming on the one side and legalizing it on the other. In the first case consideration would have be given on how the actual enforcement can be tightened. In the second case, the hope is that with legalization (much of) the existing illegal market can be channelled to a legal provision. In the Bill, the Government chooses the latter option.
Effectiveness and Enforceability
The effectiveness and enforceability of the Bill will depend on the extent to which providers and players in the illegal market will move to the legal market (the channelling degree) and the efficiency of the measures regarding the prevention of gambling addiction. The Advisory Department notes that the effectiveness and enforceability of the Bill have not been demonstrated in advance. It thereby points in particular to the borderless nature of online gaming and the limited effectiveness of measures that can be extended only to the Netherlands.
It is the opinion of the Advisory Department that it is a question of whether a reliable, responsible and accountable provision of online gaming can actually be achieved with the measures proposed in the gaming Law (Wok). This also raises the question whether the condition that the measures proposed for online gaming should be suitable to achieve a high degree of channelling and to prevent addiction can be met in the European legal framework. Furthermore, the Advisory Department has – also in the light of European legal requirements – reservations on the consistency of gaming policy for different types of gambling games (land-based gaming in the form of casinos, online gaming and (online) lotteries). This consistency is becoming less clear and cannot be determined as well anymore.
The Advisory Department is of the opinion that a legal provision of online gaming cannot be accomplished with the little effective regulation in the gaming Law (Wok) but rather with the proposed rate differentiation (a low gaming tax rate for legal online gaming). However, with this differentiation it raised some large questions, now it touches the neutrality of taxation, it is not certain whether it can achieve the desired effect and moreover it may also lead to unequal treatment.
The conclusion of the Advisory Department is that the Government should reconsider its choice. It is aware that this raises the question of whether it would be better to maintain the existing situation of a ban on online gaming if the goal of a responsible legal
provision cannot be achieved. Nevertheless, the Advisory Department recommends further consideration whether the means, the proposed method of regulation is not worse than the disease, a ban on online gaming with limited enforcement capabilities.
Read the full text of the advice of the Advisory Department of the Council of State and the Secretary of State’s further report here.