Online gambling in The Netherlands: Market about to open
After many years of waiting, the market for online gambling in The Netherlands will finally open. As things currently stand, it will be possible for providers to request a license as of 1 January 2021.
The principle underlying the regulation of online gambling is to guarantee a safe environment for players to participate in online gambling, where gambling addiction and (gambling-related) crime is prevented. In this respect, the Dutch government has a ‘channeling’ objective of 80%, meaning that it aims for 80% of the people that participate in online gambling to do so with a legal and therefore reliable provider. By opening the market, the government expects that it will become easier to supervise the online gambling market. This supervision will be carried out by the Dutch regulator in the field of (online) gambling, the Dutch Gaming Authority (Kansspelautoriteit; “DGA”).
Applications for licenses will have to be submitted to the DGA for an amount of € 45.000 and will only be granted when the applicant meets a set of strict legal requirements set forth in the Remote Gambling Act (Wet kansspelen op afstand; “RGA”), the Decree Remote Gambling (Besluit kansspelen op afstand; “DRG”) and the Ministerial Decree Remote Gambling (Ministeriële regeling kansspelen op afstand; “MDRG”). Main features of these requirements are the reliability of the applicant, responsible play and crime prevention.
Reliability of the applicant
The reliability of the applicant, including its directors, policy makers and shareholders, must be beyond any doubt. In this respect, the applicant must provide information regarding (among others) criminal incidents, financing and an overview of affiliated companies.
The reliability of applicants that already have been active in the market, will be assessed by the DGA on the basis of the compliance with the so called ‘cooling off-criteria’ for a period of currently 2 years prior to the date on which the application is filed.
The cooling-off criteria are:
- no use of a .nl-extension;
- no use of the Dutch language;
- no advertising on television, radio or printed media, targeting the Dutch market;
- no use of domain names containing typical wordings referring to The Netherlands in combination with gambling references;
- no references from which a focus on The Netherlands can be derived, i.e. via wordings, symbols or images;
- no use of payment methods that are used exclusively or mostly by Dutch people, such as iDEAL;
- not allowing minors (< 18) to participate in online gambling.
Also, the applicant is required to have a policy in place to guarantee the continuity of the reliability.
The applicant must also have policies and measures in place that guarantee that minors and other vulnerable groups are protected against the risks of online gambling.
As for minors (< 18), this means that they have to be excluded from participation in online gambling in any case. As for youngsters (18 – 24), this means that they cannot be a target of marketing- and advertising activities. In line with this, it is also prohibited to use the services of individual professional sportsmen. Advertising that is permitted must be in accordance with the risk analysis that the license holder is required to make of its offer.
As for adults, there is (among others) a Central Register Exclusion Games of Chance (Centraal Register Uitsluiting Kansspelen; “CRUKS”). As the name suggests, this register contains the names of persons that are (temporarily) excluded from online gambling, for instance due to excessive participation. Such registration can be both voluntary and involuntary. The tender for CRUKS was published last week. The DGA developed and tested the application in-house. The tender relates to the hosting, functional and technical application management and further future development of the application.
Furthermore, in order to prevent online gambling from even becoming excessive and eventually turn into gambling addiction, the license holder must provide for adequate trainings for its personnel.
In order to provide for a crime free-environment for online gambling, applicants must demonstrate compliance with the provisions of the Prevention of Money Laundering and Terrorism Finance Act (Wet ter voorkoming van witwassen en financieren van terrorisme) and the Sanctions Act (Sanctiewet). The first act contains provisions on risk management, client investigation, reporting of unusual transactions, retention of supporting documents and training. In view of compliance with the latter, relevant are whether international measures were issued in response to a violation or threat to international peace and security.
Supervision by the DGA
When applicants are granted a license, they have to report frequently to the DGA in order for the DGA to exercise its supervisory powers. In this respect, license holders are also required to have a Control database (Controledatabank; “CDB”) in place that is accessible by the DGA. Via the Control database, the DGA can view digital data from license holders and verify whether they comply with certain license conditions.
Gambling tax is due on prizes that exceed the (gross) amount of €449 and must be paid by the license holder. The tax rate is 29%.
At this moment, the responses to the lower regulation that was published for consultation are being processed and details in the legal framework are specified. For instance, the amended Decree is expected this week. The technical requirements regarding CRUKS and the CDB are expected before the start of summer. When these (draft) requirements are published, a response hereto can be submitted via a consultation application form. However, with the information currently available it is well possible to already start preparing for submitting an application. As the saying goes, well begun is half done.