Progress In Dutch E-gaming Regulation
By Jana Sedlakova
The Netherlands has long been known for its liberal attitudes and these seem soon to be extended to the realm of online gambling. Internet gaming regulation in the Netherlands, an initiative that has dates back to 2009 with the Jansen Commission, has moved up a level with the publication of draft legislation on 22 May 2013.
The Dutch Government statement says:
“The law includes strict requirements in order to prevent players from becoming addicted to gambling, to protect the consumers and to combat possible fraud and crime. The online providers will have to pay 20% tax. This means a significant step towards the modernization of the gaming policy in the Netherlands.”
The Dutch Government has recognised the need for regulation in order to protect its consumers against varied supposed threats that consumers are exposed to when playing on unregulated websites.
The Government statement highlights the need for regulation and the importance that “… players are led to a responsible, reliable and verifiable offer where they will be protected from the risks of gambling. The Game of Chance Authority will carry out supervision of the compliance with the licence conditions by the providers. At present, there is no supervision of online gaming behaviour of the players while the gaming behaviour can be very well followed in detail on the internet because everything is digitally recorded. It makes it possible to take action where necessary.”
Consumer protection is a popular argument that favours restrictive regulations in online gambling.
Consumer protection is a popular argument that favours restrictive regulations in online gambling.
A particular example can be seen in the UK Government’s proposals to reform online gambling as announced in the Queen’s speech for the third Parliamentary session on 8 May 2013. The backdrop is not much different in the Netherlands where consumer protection appears to be the main grounds for regulation. Whilst opening the market to remote gambling operators, this objective may also serve other purposes i.e. restricting access to national markets by foreign competitors whilst enjoying the tax generation benefits arising from a national licensing regime.
The new regime in the Netherlands is proposed to commence operation from the beginning of 2015 and foreign remote gambling service providers will have access to the market subject to a Dutch licence. Ulrika Lomas,
The new regime in the Netherlands is proposed to commence operation from the beginning of 2015 and foreign remote gambling service providers will have access to the market subject to a Dutch licence. Ulrika Lomas,
Tax-news.com, reported [28 May] that the “law contains strict regulations, aimed at preventing gambling addiction, protecting consumers, and combating fraud and criminality. In accordance with the legislation, licensees will be required to provide information on the risks of gambling addiction, as well as to moderate a player’s gambling, for example, by issuing warnings, and by limiting playing time. Furthermore, licence holders will be required to contribute to a fund to support addiction, and a national register of players who violate limits is to be set up.”
According to the Government statement, the tax rate in the Netherlands is proposed to be set at 20 percent. Similarly, in the UK, the proposed draft Gambling (Licensing & Advertising) Bill raises tax implications.
According to the Government statement, the tax rate in the Netherlands is proposed to be set at 20 percent. Similarly, in the UK, the proposed draft Gambling (Licensing & Advertising) Bill raises tax implications.
Whilst the proposed British measure only deals with providing online gambling services to British consumers under a British licence, it has an implied effect. Although indirectly, and under a separate regime, increased tax revenues will be one consequence of the new licensing framework. It is argued that any upper level set for the tax in the Netherlands will practically discourage genuine remote gaming service providers from the market. Importantly, to attract competition this tax rate is lower than the 29% that Holland Casino and arcades are currently subject to. The Dutch Government statement addresses this issue: “With a higher rate, providers will drop out and the players will be tempted to continue using services of unlicensed providers established abroad, who promise a higher payout.” Additionally, as Steven Stradbrooke, CalvinAyre.com, reported [22 May] a supplementary 1.5% of gross gaming revenues will be needed to help fund problem gambling and the regulation costs.
However, for the rules to be effective they must undergo a process of scrutiny.
However, for the rules to be effective they must undergo a process of scrutiny.
Thus, before the draft legislation is to be put before the Dutch parliament it will be subject to consultation. Steven Stradbrooke reported that the “Netherlands Gaming Authority (NGA) solicited operator input in January and will now allow a further 60 days for stakeholders to study the draft and make comments before the bill is formally sent to parliament.” As the Dutch Government statement confirms, the draft legislation will be open for interested parties to respond to for eight weeks from the communication of 22 May.
GBGC reported in its March issue, in the ‘Discussions Begin on Dutch Gaming‘ article that the bricks and mortar monopoly operator Holland Casino would be privatised. Holland Casino reported a loss of €652,000 in 2012.
The draft has implies that the Dutch system will only be B2C with no limits on the number of issued licences. Betting on ‘non-sport events’ (e.g. politics, TV shows etc.) will not be permitted but most casino games will be legalised as will international pooling of players. A number of consumer protection tools and tools to tackle problem gambling are being introduced including self testing of behaviour patterns and help centre contact details.
GBGC reported in its March issue, in the ‘Discussions Begin on Dutch Gaming‘ article that the bricks and mortar monopoly operator Holland Casino would be privatised. Holland Casino reported a loss of €652,000 in 2012.
The draft has implies that the Dutch system will only be B2C with no limits on the number of issued licences. Betting on ‘non-sport events’ (e.g. politics, TV shows etc.) will not be permitted but most casino games will be legalised as will international pooling of players. A number of consumer protection tools and tools to tackle problem gambling are being introduced including self testing of behaviour patterns and help centre contact details.
The Government statements says: “The basic principle of the prevention policy on gambling addiction is to provide the player with sufficient information and with the tools in order to make him aware of gambling addiction, to give him insight into his gaming behaviour and, where necessary, to force him to moderate his gaming behaviour.”
Furthermore, money transfers between different player accounts will not be permitted. The prohibition of offering unlawful gambling targets payment and internet service providers. Promotion tools such as bonus awards are allowed except they should not target specific playing patterns. The Gambling Authority will be given the discretion to exclude players whilst gambling service providers will need to keep a record of all self-exclusions.
Furthermore, money transfers between different player accounts will not be permitted. The prohibition of offering unlawful gambling targets payment and internet service providers. Promotion tools such as bonus awards are allowed except they should not target specific playing patterns. The Gambling Authority will be given the discretion to exclude players whilst gambling service providers will need to keep a record of all self-exclusions.
The appointment of a compliance officer will be mandatory and remote gambling operators will have to have a separate business account where players funds will be held. Regarding equipment location only data servers will need to be situated in the Netherlands.
In accordance with the emerging legal situation in the Netherlands Facebook has announced that it has halted all advertisements promoting Dutch gambling. Addressing the removal of such games on social networks Paul Tang, spokesperson for the Dutch Gaming Authority (Kansspelautoriteit), regarded it as a significant move in the fight against unlawful gambling and preventative measures against youth involvement in the activity. He said “Facebook is a low-threshold social network with easy access to youngsters. By taking this step, the organisation is showing it takes its social responsibilities seriously.” It has been suggested, that Facebook would face significant fines were it not to take these measures.
In accordance with the emerging legal situation in the Netherlands Facebook has announced that it has halted all advertisements promoting Dutch gambling. Addressing the removal of such games on social networks Paul Tang, spokesperson for the Dutch Gaming Authority (Kansspelautoriteit), regarded it as a significant move in the fight against unlawful gambling and preventative measures against youth involvement in the activity. He said “Facebook is a low-threshold social network with easy access to youngsters. By taking this step, the organisation is showing it takes its social responsibilities seriously.” It has been suggested, that Facebook would face significant fines were it not to take these measures.
Willem Van Oort, CEO of GranViaOnline and organizer of the Gaming In Holland Conference, commented:
“I think this is a step in the right direction. We shall now see what the consultation adds/changes and will review the final draft after that.
It must be said though, that some of the requirements are ‘tech compliance’ heavy and we need to have a close look at the bylaws to look at the financial, technical impact, as well as the impact on conversion rates and easiness of use for the customers.
The government is trying to protect existing tax income whilst adding the iGaming tax of 20%. As long as other levies don’t creep up it’s a good starting point and a reasonable tool to onboard the .com economic activity. Consumer protection is one of the key principles of this draft.
A level playing field is different for each participant – the lotteries, land-based companies, state owned Holland Casinos and the international operators each have their own view on what that level playing field is. Generally, for the iGaming sector in Holland this is a reasonably good draft though”.
“I think this is a step in the right direction. We shall now see what the consultation adds/changes and will review the final draft after that.
It must be said though, that some of the requirements are ‘tech compliance’ heavy and we need to have a close look at the bylaws to look at the financial, technical impact, as well as the impact on conversion rates and easiness of use for the customers.
The government is trying to protect existing tax income whilst adding the iGaming tax of 20%. As long as other levies don’t creep up it’s a good starting point and a reasonable tool to onboard the .com economic activity. Consumer protection is one of the key principles of this draft.
A level playing field is different for each participant – the lotteries, land-based companies, state owned Holland Casinos and the international operators each have their own view on what that level playing field is. Generally, for the iGaming sector in Holland this is a reasonably good draft though”.
Change does seem to be on the cards for the Dutch e-gaming sector. But is it is a process that has already been going on for four years and has been derailed by political machinations in the past. The new draft legislation aims for a 2015 start date but in political terms that is a long way off and the legislation has yet to face scrutiny in the State Council and Dutch Parliament.
The Dutch Government statement can be found here.
The Dutch Government statement can be found here.