Update Remote Gambling in the Netherlands: opening market 1 October 2021 and publication of final lower legislation

Machteld Robichon & Fransje Brouwer / 08 mrt 2021

Last month the Minister for Legal Protection confirmed in line with previous speculations that the Remote Gambling Act (Wet Kansspelen op afstand, “Act”) will take effect on 1 April 2021 instead of 1 March 2021. This leaves the first group of applicants that can apply for a license as of on 1 April 2021 with a little less than 8 weeks before filling the application. The processing of the applications is expected to take 6 months. The market for online gambling is therefore expected to open on 1 October 2021.

Now that the entry into force is delayed with one month delay, the so called  ‘cooling-off period’, the waiting period for unlicensed operators, has also been extended to 2 years and 9 months.

Last week marked an important step: the publication of the final versions of the lower legislation, consisting of:

With this the formal legislation for the introduction of online gambling licenses is now finalized. That is good news!

Around mid-February 2021, we also expect that the Gaming Authority (Kansspelautoriteit; “Ksa”) will publish the amended policy rules, including the Policy rules license remote gambling and the Policy rules responsible gaming.

Also good news is that the changes in the final versions is very limited.

Below we highlight the most important changes in the lower legislation.

Decree

The amendments in the Decree are very limited.

  • Registration: as part of the registration the ‘gender’ of a player is no longer registered.
  • Payment transactions: some wording in Article 4.27 Dree has been deleted so that corrections of payments are no longer limited to “the consequences of a technical malfunction of the gaming system“, which indicates that a general reservation applies for corrections of payments.
  • The time slot for advertising for online gambling on television and radio from 6 am to 9 pm has been deleted in the Decree. However the time slot will still be effective, but it will apply on the basis of the Media Act (Mediawet 2oo8).
  • A new Article, Article 7.1, introduces a basis for the temporary exemption for the formal appointment of inspection bodies by the Minister. This exemption was already announced earlier and is now implemented in artikel 6.1 of the Regulation and applies for maximum two years after the Act takes effect.
  • The entry into force of the player exclusion register (Centraal register uitsluiting kansspelen; “Cruks”) is postponed with six months. It will only take effect on 1 October 2021. This means that all licensed providers will have to implement CRUKS as of 1 October 2021.

Regulation

The amendments in the Regulation are also limited.

  • Article13 on the retention of (personal) data has been slightly amended.
  • There is no obligation to report match-fixing to the Ksa if the FIU has already been notified; this follows from the new Article 3.15a.
  • A few amendments have been made regarding match fixing, including appendix 2 and the applicable categories/matches. This also applies to appendix 1 of the Implementing regulation.

Explanatory memorandum to the Decree

The explanatory memorandum to the Decree has been adjusted on a number of aspects, partly in response to the legislative advice from the Council of State. The scope of these adjustments is also restricted.

Below we highlight the most relevant parts of the additional clarification:

  • Further substantiation was provided on the control database and why it should be located in the Netherlands for reasons of effectiveness of compliance monitoring and enforcement.
  • Further guidance was provided regarding the representation by a representative in the Netherlands:“The purpose of that representative is to ensure the effectiveness of the licensee’s addiction prevention policy for players in the Netherlands as much as possible. The effectiveness of such prevention policy is not optimal if it is not constantly well connected to (the practice of) the Dutch healthcare system, the assistance needs of Dutch (problem) players and the assistance actually available to them in the Netherlands.”“The representative’s task is to maintain, on behalf of the license holder, those contacts with the relevant parties in the Netherlands that are necessary for the continuous and effective connection of the addiction prevention policy to the Dutch healthcare system and the healthcare needs of the Dutch player, to make arrangements in that respect, and to advise the license holder in this regard with a view to the continuous maintenance of its addiction prevention policy. The actual implementation of the prevention policy towards individual players is not part of his duties. That is the task and responsibility of the licence holder. It is also up to the license holder to incorporate the information from his representative(s) in his addiction prevention policy. This may relate, for example, to the (further) development of the addiction prevention courses for its employees, the general information on addiction prevention for Dutch players, the personal intervention talks with such players and their referral to the appropriate care in the Netherlands.”For example, it is not required that the representative must be established or resident in the Netherlands. However, he does have to be actually present in the Netherlands to a sufficient extent to be able to carry out his activities properly. Nor are any other requirements set for language skills than that he must be able to communicate in the Netherlands in a language that the relevant Dutch discussion partners sufficiently master. This is a less far-reaching restriction than the obligation to use only Dutch. It follows that the requirement of proportionality is met. The effect of the representative in the Netherlands in practice shall be closely monitored and the effectiveness for the prevention of addiction in the Netherlands shall be included in the evaluation of the regulation of remote gambling. If necessary, the requirements will be adjusted accordingly.”
  • A brief justification regarding the processing of personal data has been added:“These include the obligation to register data on gambling behaviour, including the frequency with which the player visits a gambling website or a land-based gambling casino or amusement arcade. Such data may include health data, which may reveal problematic or addictive behaviour. The purpose of these regulations is, pursuant to Article 5(1)(a) of the GDPR, well-defined and explicit as the prevention of unauthorised participation in games of chance or of gambling addiction.”“The various registration requirements, including visitor registration, are necessary in order to gain a good insight into the playing behaviour of players, to assess whether there is excessive participation and then to be able to intervene in time.”“The personal data that is recorded and stored must be limited to what is necessary for those purposes and may not be stored for longer than is strictly necessary. The retention periods are laid down by Ministerial Regulation.”
  • Enforcement against unlicensed operators is discussed in more detail, including the new powers that will be introduced in the Act for the Ksa:
    • Mystery shopping: this enables the Ksa to participate in games of chance under a false name;
    • Binding instructions to be issued to service providers, including payment service providers, to cease providing services to providers that illegally offer games of chance;
    • The international cooperation through memorandums of understanding (MoU’s) with foreign regulators within the EEA in order to share information regarding (potential) unlicensed operators and to cooperate in the area of supervision and enforcement.
  • More guidance is given how license holders will be supervised:
    • Through the inspection of the game system by accredited testing bodies;
    • Via the control database;
    • Through the necessary reporting requirements;
    • By demanding information:”The Dutch Gaming Authority can also demand information and inspection of business data and documents from license holders established outside the Netherlands. Within the framework of international cooperation in the field of supervision and enforcement, it can also request information about such license holders from the relevant foreign regulators.”“Compliance monitoring by the Dutch Gaming Authority is risk-driven and carried out on the basis of risk analyses, thematic research, signals and random sampling. To this end, data from the reports of the license holder, from the control database, from inspection reports and from any reports about the licensee are considered in relation to the behaviour of that licensee on the gambling market, reports from other licensees and other available information, for example from foreign gambling supervisors. If there is any doubt about the correctness of the data supplied by a licensee, the Gaming Authority will in any case proceed to further investigate that licensee. In this respect it can demand further information and substantiation.
      If necessary, it shall demand that data or documents are provided or explained in person by an officer of the licensee whom it shall determine. If necessary, it may order an additional inspection of certain parts of the gaming system. It shall also have direct access to the primary systems of the licensee.”“With this, the chance of knowingly and systematically providing incorrect data is very high. It is also not in the interest of the licence holders – whose reliability and suitability has already been assessed prior to the granting of the licence – to provide incorrect data, as they would then run the risk of substantial financial penalties, damage to their reputation, loss of customers and turnover and, if their online gaming licence is revoked, also the loss of their investments.”
  • The market entrance of small(er) providers is discussed in more detail following criticism from the Council of State. According to the Minister small providers can make use of white-label services. Reference is made to surrounding countries where ten large providers control more than 90% of the legal online gaming market. Based on that experience, the Minister assumes that granting licences to smaller providers is not decisive for achieving the channelization objective of 80%.
  • Some wording has been added concerning the placement of electronic means and the establishment thereof within the European Union (article 4.42 Decree):“The complex reality of online games of chance involves the use of electronic services from a wide range of suppliers. The technology and range of such services change rapidly and constantly. The configuration of virtually every gaming system is unique. The licensee must have a complete and up-to-date description of it in terms of the various components that make up the system (Article 4.41, subsection 2). In the interest of the responsible, reliable and verifiable organisation of the online games of chance, that system, supported electronically by the necessary hardware and software, must meet the requirements of Dutch regulations. It is conceivable that, in the framework of its risk-based supervision, the gaming authority will set priorities with respect to the licensee’s obligation to place the electronic means in the EU/EEA.”

The changes to both the articles and the explanatory memorandum of both the Decree and the Regulation are as noted limited. This is good news for operators that are busy in the preparation of their applications. We note that operators applying for a license before 15 April 2021, will also have some extra time to have the gaming system tested and certified. This should be done by 1 July 2021.

For questions, more information or assistance with an application for online gambling in the Netherlands, you can contact Machteld Robichon or Fransje Brouwer.

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