Yesterday morning, EGR Magazine, Gaming in Holland, and SBTech hosted a well-attended Breakfast Briefing on the latest regulatory developments in the Dutch gaming, betting, and lottery markets.

The expert panel, consisting of Marja Appelman (the Netherlands Gaming Authority), Justin Franssen (Kalff Katz & Franssen), Bert Bakker (Meines Holla & Partners), and Peter-Paul de Goeij (Lottovate Nederland) discussed a range of topics related to remote gaming, lotteries, land-based sports betting, betting on horse racing, and the privatization of Holland Casino.

01-12-2016, Amsterdam, Gaming in Holland bfast conference photo and copyright Leonard Fäustle 0615004194
(C) Gaming in Holland. More Pictures HERE

 

“Compared to six months ago, quite a lot has happened,” Appelman said of the current state of affairs.

 

Remote gaming

The remote gaming bill, after passing the Lower House in July, has now been taken up by the Senate, which is expected to vote on the bill early next year.

 

Channelization

One of the bill’s main goals is to ensure that at least 80% of Dutch online punters will be “channeled” towards licensed operators. But to what extent is this a realistic ambition?

The proposed tax rate of 29% of GGR “will not have a positive effect on the channelization rate,” Appelman admitted. However, as soon as the remote gaming bill comes into force, the Gaming Authority will have plenty of resources to fight unlicensed operators.

A large part of the regulator’s enforcement measures will be aimed at B2B facilitators of illegal operators, which, Appelman said, will in many cases be more effective than simply trying to keep consumers away from unlicensed gambling sites.

In any case, a channelization rate of 80% will take “a couple of years to achieve, regardless of tax rate,” Appelman warned.

Bakker, however, observed that “in the end, it is the players, not the regulator, who decides which operator finds favor,” adding that “players will find a way” to make use of the most attractive product offering.

 

Timeline

At the end of October, the Senate submitted a relatively modest number of questions on the remote gaming bill to the Ministry of Security and Justice.

According to Franssen, it would be “reasonable to expect” that the answers to these questions will be provided before the end of this year.

Hopefully, the Senate will be able to vote on the remote gaming bill ahead of the elections for the Lower House in March 2017.

“We are now aiming for the start of 2018 as the opening date of the regulated online market,” Appelman added.

 

Secondary legislation

The secondary legislation associated with the remote gaming bill is currently being finished by the Ministry of Security and Justice and is expected to be published before Christmas or early in the new year, Bakker revealed.

Once published, the secondary legislation will then be the subject of a fast-tracked public consultation.

 

Threats

If, however, the Senate fails to vote on the remote gaming bill before March 2017, it would be conceivable for the bill to be shelved indefinitely, Bakker warned.

01-12-2016, Amsterdam, Gaming in Holland bfast conference photo and copyright Leonard Fäustle 0615004194

(C) Gaming in Holland. More Pictures HERE

“Once a new government is in the process of being formed and, for instance, a Christian party claims the Ministry of Security and Justice, it is not unthinkable that this particular piece of legislation will be put on hold,” he added. “It is obvious there are forces in Parliament that seek to deliberately frustrate the process.”

Still, there is, at this point, no reason whatsoever to assume that the Senate will delay its vote until the spring of 2017, Franssen observed.

 

Lotteries

New market entrant Lottovate was recently granted a license to operate a charity lottery in the Netherlands – the first operator to do so in nearly thirty years.

“We learned: ‘Don’t wait for the politicians,’” the operator’s managing director Peter-Paul de Goeij said. “Ultimately, we had to resort to litigation in order to be able to apply for a lottery license.”

 

The licensing process

“The licensing process was a new experience for both us and the Gaming Authority,” De Goeij remarked. “Ultimately, it was a good, but very lengthy procedure.”

“My advice for other applicants would be: ‘Empty your calendar.’ Your documentation has to be in order and your administration has to be impeccable.”

“We learned as we went along,” Appelman confirmed. “But now, we have a better idea of what information and documentation to ask. We hope to do a bit better with the horse racing betting tender we just launched.”

“Although Lottovate’s license, like all other current lottery licenses, expires on December 31, 2016, the procedure to renew their, as well as all other lottery licenses has already started.”

 

State aid

“Since lottery prizes of 449 euro or less are currently exempt of gaming tax, lotteries face a significant lower tax burden than all other operators. The European Commission has already indicated that it considers the resulting absence of a level playing field as a form of illegal state aid. As this issue will not be addressed by the current government, future trouble appears unavoidable,” Bakker noted.

“In effect, customers of Dutch sports betting brand Toto, which is owned by Nederlandse Loterij, will in the future face a lower effective tax rate when they wager offline. Obviously, this makes no sense at all,” Franssen added.

 

Land-based sports betting

Although the online sports betting market will be open, Nederlandse Loterij will keep its monopoly on land-based sports betting, even though its retail customers are also able to place bets online through de facto betting terminals.

 

Franssen remarked that in his opinion there is no legal justification whatsoever for keeping this

monopoly intact. “This particular exception will become a hotbed for litigation,” he predicted.

 

01-12-2016, Amsterdam, Gaming in Holland bfast conference photo and copyright Leonard Fäustle 0615004194
(C) Gaming in Holland. More Pictures HERE

 

 

Horse racing totalizator betting license

The Netherlands Gaming Authority recently announced the launch of a digital tender for an exclusive five-year horse racing and harness racing totalizator betting license.

“Although the current license ends on December 31, 2016, the new license will only enter into force in April 2017,” Appelman said. “In the mean time, there will still be licensed betting on horse racing. We will announce shortly how exactly we intend to make this happen.”

“The Gaming Authority will judge bids primarily on the reliability of operator and the presence of demonstrable experience with land-based horse racing. Potential licensees can not have been illegally active on the Dutch market.”

 

Holland Casino privatization

“The Lower House will debate the current proposals to privatize Holland Casino in January. For now, everything indicates that the proposed privatization is not considered controversial. The remainder of the legislative procedure could go quite fast,” Appelman said.

 

Closing remarks

Appelman: “If I had a magic wand, I would like to really speed up things.”

Bakker: “If absolutely everything goes right, the online market could perhaps open as early as September 2017.”

Franssen: “It remains to be seen whether the remote gaming bill will become a success. The devil is in the details and much depends on the secondary legislation.”

De Goeij: “We are very optimistic about our chances in an open market.”

Check out the event’s photo’s here!