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Netherlands Gambling Authority announces new measures to force unlicensed operator blackout

Today, the Netherlands Gambling Authority announced new measures designed to force unlicensed operators with large customer bases in the Netherlands to completely withdraw from the market from November 1, 2021. Previous policy, published as late as March of this year, implied that such operators could count on de facto toleration, if they would refrain from “actively targeting” the Dutch market prior to obtaining a remote license.

Policy U-turn

The Dutch regulator's new enforcement criteria were drawn up in response to the new enforcement directive shared by Minister Sander Dekker for Legal Protection with the Dutch Lower House on Monday, the aim of which was to force existing Dutch online players to switch to legal alternatives available from October 1, 2021.

Dekker's enforcement directive represented an unexpected break with previous policy, which prioritized eventual market channelization (to which operators currently subject to the cooling-off period were expected to eventually contribute) over providing immediate market exclusivity to fully licensed operators.

The Netherlands Gambling Authority's new enforcement measures are a practical implementation of the Dutch government's unexpected policy change.

New prioritization criteria

Starting November 1, 2021, the Netherlands Gambling Authority will implement new prioritization criteria for deciding whether to take enforcement action against a specific operator. This decision will (generally) be based on the following four criteria:

  1. The current number of Dutch players/customers.

  2. The harmfulness of the illegal offering.

  3. The extent to which the illegal offering (successfully) competes with legal alternatives.

  4. The extent to which the illegal offering is actively targeting Dutch consumers.

Specifically, this means that online operators with a large customer base in the Netherlands will henceforth be first in line for enforcement action.

Higher, more impactful fines

Previous policy decisions (specifically: the cooling-off period as defined (Art. 3.8 1c) in the relevant policy rule), might make it impossible for the Netherlands Gambling Authority to deny a license application from online operators with a large number of existing Dutch customers.

In order to avoid a scenario in which such operators simply accept their sanctions while continuing to serve their existing Dutch customers, the Dutch regulator also decided to significantly increase the penalties imposed on operators found to be in violation of Dutch gambling laws from October 1, 2021.

Operators whose revenues in the Netherlands exceed €15m will be fined 4% of those revenues. When revenues are lower than €15m, the fine will amount to at least €600,000.

When revenues are unknown, fines will be based on an estimate drawn up by the Dutch regulator.

These base charges may be further increased in case of aggravating circumstances, such as targeting minors or vulnerable players, or offering games/bets that are not allowed in the Netherlands.

Significantly, the Netherlands Gambling Authority may also fine natural persons, such as executives, deemed to be responsible for directing or overseeing any violations of Dutch gambling laws.

Expected impact

Due to these new measures, it is expected that major online operators with a significant presence in the Netherlands will soon shut down operations in the country.

However, as the regulated online market may, initially, consist of only a dozen or so operators, consumer choice will be severely limited. As Minister Dekker himself admitted, not all “orphaned” players may opt for the available legal alternatives. At least some of these players will instead end up with offshore operators that are wholly insensitive to regulatory pressure.

Industry reactions

Helma Lodders, chair of trade association VNLOK, which represents land-based incumbents Holland Casino, Janshen-Hahnraths Group, JVH gaming, Nederlandse Loterij, and ZEbetting, commented: “From October 1, there exists a new situation in which all online gambling operators are required to be fully licensed. In these circumstances, it is important that Dutch players will be able to quickly benefit from all the protections offered by the new Remote Gaming Act. The Minister's decision to intensify enforcement measures is reflective of widely shared sentiments in the Lower House.”

Trade association NOGA, which represents several major international operators, did not immediately respond to a request for comment on the Dutch regulator's new enforcement measures. However, in an earlier statement, Peter-Paul de Goeij, Director of NOGA, said: “The Minister's new enforcement directive appears inconsistent with previous policy decisions that were supported by Parliament. The reasoning in his recent letter does not stand up to scrutiny. Players forced to switch to licensed offerings are instead likely to end up with operators who have no intention whatsoever to apply for a Dutch remote license. Ultimately, this decision will mainly benefit rogue operators, who are, undoubtedly, cheering this outcome as we speak.”

More information at next week's Gaming in Holland Conference

If you would like to learn more about the Netherlands Gambling Authority's new enforcement measures and their expected impact, please consider joining us at next week's Gaming in Holland Conference, featuring, among other things, a now highly anticipated keynote speech by KSA chairman René Jansen.

See you Tuesday, September 28 in Amsterdam?

Register today!

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