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Gaming in Holland 2016 Recap


The 2016 edition of the Gaming in Holland Conference just concluded in sunny Amsterdam. The main message of this year's speakers, which included Holland Casino CEO Erwin van Lambaart and Dutch Gaming Authority CEO Marja Appelman, was that Dutch Parliament should make haste with regard to debating the long-awaited remote gaming bill.

Other major topics of conversation included the privatization of state-owned Holland Casino, the (future) funding of sports and charities in the Netherlands, as well as responsible gaming. In case you were unable to attend, this recap revisits these topics in great detail below.

You could also check out third-party coverage of our conference here, here, and here. In case you did participate, you might want to take a look at our conference photos, or see what other people had to say on Twitter here and here.

We hope to see you next year!

The Privatization of Holland Casino

“Exciting Times”

Speaking on the future of Holland Casino, its current CEO, Erwin van Lambaart, remarked that these were “exciting times” for the state-owned casino company.

As part of the casino's upcoming privatization, now slated for 2017, four of the current fourteen locations will be split off and sold separately, while two entirely new casino licenses will be created (which, by law, cannot be owned by Holland Casino).

In response to these challenging circumstances, the casino chain is currently developing a new vision for the company: Holland Casino 2020, “to ensure that Holland Casino remains attractive to the new generation.”

While the company's vision remains centered on hospitality, Van Lambaart said, there will also be new games, including skill-based offerings. Holland Casino will also aim to integrate its land-based games with its remote offering, once remote gaming finally gets regulated in the Netherlands.

Speaking of the continuing absence of regulated online gaming in the Netherlands, Van Lambaart said he was “very critical” of the Dutch Parliament: “Dutch players and consumers enjoy an insufficient level of protection. I therefore plead to Parliament to finally move forward with the remote gaming bill.”

“Value of Holland Casino Unclear”

Ron Goudsmit, Honorary President of the European Casino Association, stressed that despite some estimates that put the expected value of Holland Casino close to €1 billion, the actual sale price could end up significantly lower, depending on the specific conditions of the eventual deal.

Despite posting encouraging financial results over the last few years, earnings are still significantly down compared to the peak year of 2007, Goudsmit said, while personnel costs, from a comparative perspective, remain very high.

Additionally, many crucial details surrounding the sale remain unclear. Which ten locations will remain in the Holland Casino cluster and which four will be sold off separately? How will the company's assets (including brand name), common IT infrastructure, existing pension obligations, and customer database be split up?

As long as these (and other) questions remain unresolved, it will be premature to put a price tag on Holland Casino, Goudsmit concluded.

Similar inferences could be drawn from the presentation of Richard Noble, COO at UK casino operator Aspers, which, Noble said, was seriously considering a bid on Holland Casino.

“Let operators know exactly what they can do. How many slots can we operate? What slots? Is sports betting allowed?” Noble asked. “Although Aspers repeatedly reached out to the Dutch government, we have received no response to our enquiries.”

Holland Casino Privatization “Less Political” than Remote Gaming Bill

Roland Al, Senior Policy Officer at the Ministry of Security and Justice, provided a number of insights on the regulatory background to the proposed privatization of Holland Casino. “The Ministry's current policy vision is based on a partially open regime,” Al said. “Our main policy objectives remain consumer protection, the prevention of problem gambling, and the prevention of fraud and crime.”

According to Al, the plenary debate in the Lower House on the Holland Casino privatization bill will take place (“hopefully”) after the summer, which would mean the bill could come into force in early 2017. While Al admitted that this schedule was “ambitious,” he also added that in his estimate the Holland Casino privatization bill was “less political” than its remote gaming counterpart.

Although it had been reported that Holland Casino would be auctioned off, Al stressed that, as of yet, no definitive decision had been made regarding the method, or even the exact sequence of the sale, i.e., whether all available casino licenses would be sold simultaneously or not.

Remote Gaming: A Regulatory Update

Endless(?) Delays

Early this spring, it appeared that the Dutch remote gaming bill would finally be voted on in the Lower House. However, the plenary debate, originally scheduled for early April, was repeatedly postponed and is now (But for how long?) scheduled for the week of June 20.

Gaming lawyer Justin Franssen, of Kalff Katz & Franssen, could not hide his pessimism, saying that there was “no intrinsic reason for these delays,” blaming the postponements on “incumbent interests” seeking to “delay and derail” the bill.

Marja Appelman, CEO at the Netherlands Gaming Authority (Kansspelautoriteit) warned that further delays could prevent the final enactment of the bill from occurring before the next parliamentary elections of March 2017, which, in her view, would have the potential to create a “deeply problematic situation.”

Dennis van Breemen, Program Manager at the Ministry of Security and Justice, said the delays could also be explained by elected representatives having other, more pressing priorities.

More Changes to the Remote Gaming Bill?

“A lot can still change,” Van Breemen said. “There is a clear political desire in the Lower House for equal treatment of online and land-based operators. I think more changes are to come. For instance, I expect amendments in the area of promotions and bonuses. But to be honest, we don't know yet.”

Asked about secondary legislation, Appelman said the Kansspelautoriteit will publish preliminary technical standards as soon as the consultation process on secondary legislation has concluded.

Regarding the possibility of charging operators who were active in the Dutch market prior to obtaining a license with back taxes, Appelman said: “We will do what is best for consumers. I don't see what they will gain by this.”

Expected Consequences of a 29% Online Gaming Tax

“The amendment that increases the online gaming tax rate to 29% of GGR has a majority in the Lower House,” Van Breemen observed. “Based on existing studies, the Ministry expects a player channelization rate between 60 and 65% after three years, which is much lower than the desired 80%.”

“The tax issue is a done deal,” Franssen added. “MP Jeroen van Wijnbergen (VVD) made it very clear: without the tax amendment, there will be no remote gaming bill.”

Appelman nonetheless expressed concerns: “We are very worried what this will do for the player channelization rate. Only consumers who play with licensed operators can be adequately protected. Thus, we will start monitoring the channelization rate as soon as possible in order to evaluate whether the tax rate should stay at 29% or should be lowered to 25% – possibly even before the end of the three year evaluation period provided in the tax amendment.”

What if No Remote Gaming Bill Will Be Enacted?

Although the European Commission has repeatedly threatened to start infringement procedures against the Netherlands, pressure will actually come from individual court cases, Franssen feels. But then “things will spiral out of control, Germany-style,” Franssen warned.

In the mean time, effective enforcement of the current prohibitions against online gaming will prove to be all but impossible, according to Appelman. “In Hungary no progress whatsoever on the regulation of online gaming has been made. As a result, the Hungarian gaming authority is now the third-largest in the whole of Europe, employing no less than 110 FTE's despite the country's small population.”

Even more problematic is the fact that the current Dutch remote gaming bill contains measures that allow the Kansspelautoriteit to oversee and regulate other forms of gambling as well. Without the remote gaming bill, the Kansspelautoriteit will be unable, for instance, to properly oversee casino gaming or lotteries, Appelman further noted.

Appeal to Parliament

All three panelists appealed to Parliament to finally debate and enact the remote gaming bill.

Appelman: “Put consumer interest first. Consumers need this remote gaming bill.”

Van Breemen: “Dutch consumers deserve adequate protection.”

Franssen: “Parliament should stop listening to half-truths spread by outside parties.”

Responsible Gaming

This year's Gaming in Holland Conference featured a responsible gaming panel which included two recovering gambling addicts: author Jessica Broekhuis and Feite Hofman, manager at Gamblers Anonymous NL. Other panelists included Floor van Bakkum, a senior prevention expert at Jellinek and Yvon Jansma of the Center for Responsible Gaming.

Jansma in particular expressed severe disappointment with the continuing absence of online gaming regulation, remarking that the ongoing delay in remote gaming legislation, is also causing delays in the release of research funds to investigate evidence-based methods to prevent online gambling addiction.

Lotteries and the Funding of Sports and Charities in the Netherlands

New Possibilities in Sports Funding

Esther Roelofs, former Manager Commercial Affairs at NOC*NSF and current owner of Sportmarketingbureau, pointed out that some Dutch sports associations depend for 80% on De Lotto for funding, while De Lotto's contributions to Dutch sports have been declining for years.

“Accept market liberalization and pursue a diversification growth model,” Roelofs advised sports organizations in need of additional funding. “Continue to partner with loyal parties such as De Lotto, but set clear mutual conditions, and create a hybrid model. Consider launching your own betting product, for instance.”

“New Entrants Always Create Market Growth”

“In 2014, we applied for a Dutch charity lottery license,” Peter-Paul de Goeij, Managing Director at Lottovate Nederland said. “so we could operate like any other Dutch charity lottery. Yet our application was denied for reasons that the District Court in Amsterdam recently deemed to be legally invalid.”

“Legalities aside, there was no good reason whatsoever to deny our application. New entrants always create market growth. It is a given. In other words, a limited lottery offering is not in the best interest of either the consumer or Dutch charities. I admit that the market share of incumbent operators might decrease, but not the market as a whole. Even incumbents might eventually be better off.”

“For instance, during last year's edition of the Gaming in Holland Conference, Arjan van 't Veer, Manager Corporate Affairs at the Dutch State Lottery explicitly admitted that 'broadening the [lottery] market has always increased revenues' – including in the Netherlands.”

“Thus, we feel there is no reason why additional lottery operators should not be able to enter the Dutch market.”

Lottery Regulatory Update

On a related note, Marja Appelman remarked that current Dutch lottery licenses terminate automatically at the end of this year, adding that the Kansspelautoriteit is presently preparing transparent licensing procedures that will be open to new entrants such as Lottovate.

According to Dennis van Breemen, the Ministry of Security and Justice will shortly provide the Kansspelautoriteit with specific directions with regard to shaping these licensing procedures.

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