Discussions Begin On Dutch E-gaming
By Jana Sedlakova
The sustainability of online gambling prohibition in pockets of the EU is becoming increasingly questionable. In the Netherlands, for example, current gaming legislation at present does not refer to remote gambling and, as such, it is illegal. Autumn 2012 was an important time for Dutch remote gambling with the formation of a new political coalition, which appeared to look more favourably upon internet gambling.

Dutch Prime Minister Mark Rutte has taken the initiative and has become the leading pro remote-gambling advocate in the Netherlands. A draft bill is due to be proposed in April 2013. The e-gaming sector’s expectations are that the regulation will be finalised by the end of 2013 and, more importantly, will be implemented during the same period. However, whilst it needs to be passed through parliament, Willem van Oort, CEO of GranViaOnline and organizer of www.GamingInHollandConference.com, told Global Betting and Gaming Consultants that he does not believe the regulation will be enacted by the end of this year. He stated that “the political landscape is volatile.”
The Dutch government has said that: “We will modernise gambling policy. Online gambling, sports betting and poker events will be strictly regulated. Thereby we will reduce the illegal offer of gambling. Compliance with the licensing conditions will be strictly monitored.” 

This comes only one year after the judicial ruling that a Dutch prohibition of online gambling does not contravene European Union laws. Such a ban needs to be shown to protect a European Union Member State’s public good. The stance of the Dutch authorities to ban online gambling had been fought against by European gambling operators like Ladbrokes and Betfair for several years until the above judgement was passed. Holland also saw the emergence of a ‘blacklist’ of websites that banks were asked not to transact with. Compliance with this blocking request was apparently “optional”.
The key conclusions arising from the legal battles at the European Court of Justice signified that whilst it is permissible to restrict services any restriction needs to be based on fair rules. In a single licence regime the rules for a licence acquisition should be open to all, however, this may be restricted by stringent regulation. The legal battles in the Netherlands also ruled that poker was not deemed to be a game of chance but a game of skill. 
One may guess that one of the drivers behind the inclination towards regulation, besides fighting unlawful gambling and consumer exposure to various forms of crime, may also be enriching the public purse. The tax propositions may go beyond what the industry is used to. The rumoured 29% tax rate on gross gaming win would be an uncompetitive rate. It will be interesting to see what the internet gambling industry response to this tax rate will be in practical terms. Some report it will deter the biggest brands from trying for a Dutch internet gambling licence. Perhaps interested parties will liaise with the government and successfully lobby for a reduced tax rate. 
Betfair has already felt the negative impacts of regulatory changes on its revenues. At the recent Interim results, Betfair reported a 4% drop in revenues for the three months ending January 2013. In the announcement dated 7 March 2013 Breon Corcoran, Betfair’s new Chief Executive Officer, said “In line with our previous guidance, international revenues declined as a result of regulatory change and our focus on sustainable jurisdictions.”
Willem van Oort suggested that the high tax rate in Holland may be reduced under the pressure from e-gaming operators. He said “Yes, this seems to be the case. First of all, the regulator has asked during an industry Meet and Greet back in January what would be the preferred option. The industry has expressed that Holland would be a less interesting country if the tax rate would be that high [29%] and most suggestions are in the 15%-20% range. Also, most operators pointed out that if the Dutch want to capture a strong share of the .com market, this is key.” 
A state monopoly appears as an unlikely option. Whether there will be any sort of state monopoly embodied by the Holland Casino online operation Willem van Oort stated that “the Dutch government has agreed in its coalition agreement that they want to sell Holland Casino. Giving them [Holland Casino] preferential treatment at this stage would work counter-productively.
As reported at the end of last month, the state owned Holland Casino, a chain of over a dozen sites, released a Request for Proposals (RFP). The aim of the RFP is to have established an online ‘free play’ gambling operation ready to go for ‘real money play’ as soon as the regulation is in place. Consequently, the industry can expect Holland Casino to be privatised. It is difficult to assess who will win this tender. 
Willem van Oort believes that “only a handful of companies can deliver such a turnkey solution. Hopefully the decision maker will go for the best solution. The tender for the High Speed Train (FYRA) went to the lowest bidder 5 years ago and now, 6 months after the launch, the trains are not working.
Sites identified as offering unlawful online gambling may have already been given the red card. Gaming operators were warned last year that in the case they were deemed as illegal they would not be eligible for legitimate online gambling operation licences once applicable. 
Approximately 20 companies at that time took measures to comply with this warning following the announcement including Ladbrokes, Unibet and Bwin.Party.
The aspects of the new regulation are under review and in particular some of the questions being asked are how to combat problem gambling and whether this is achievable via setting up varied forms of limits.
Answering the question whether Dutch regulation will be in line with other States’ ring fenced models Willem van Oort said “Holland is a small country and is leaning towards the Danish model in many aspects – closed liquidity would simply not be feasible and .com operators would still keep a strong market share.” According to him the model will be an open one where “a healthy competition seems to be the consensus. No specific games excluded.