Dutch Lawmakers Make Little Progress Toward iGaming Regulation as Pressure for Change Grows

It has been 12 years since the European Commission first urged the Netherlands to remodel its gambling regulatory framework in a manner that would allow foreign gambling companies to provide online gambling services in the country. And it has been more than three years since Dutch lawmakers commenced what has now turned into a lengthy process toward the opening of the country’s gambling market for regulated online gambling services.

Back in April 2006, the EC sent a request for information on national legislation restricting the provision of online betting and gaming services to seven Member States, with the Netherlands being one of them. Commissioners later on confirmed that they considered the country’s gambling regulations inconsistent with Article 49 of the EC Treaty for the free movement of services within the borders of the union.

It took a while before Dutch lawmakers crafted a gambling legislation that contained online gambling legalization provisions. What became known as the Draft Bill on Remote Gambling was approved by the Dutch House in the summer of 2016. However, Senate lawmakers will too need to give the nod to the piece of legislation before it takes effect.

Lawmakers indicated last year that the long overdue Senate vote might eventually occur in 2018 and the Remote Gambling Act might come into force in early 2019. However, it seems that there was little progress during the first quarter of the year toward the eventual legalization of online gambling in the country.

It also became clear during these three months that the Dutch Gaming Authority (Kansspelautoriteit) has grown a bit frustrated with the delayed implementation of the Remote Gambling Act.

Call for Regulation

The regulator recently published its 2017 annual report in which its Chairman Jan Suyver urged lawmakers to remodel the country’s outdated gambling laws and to provide Kansspelautoriteit with the power it needs to regulate the field effectively. Mr. Suyver further pointed out that “too much hesitation and demanding too exacting standards” could result in foreign operators losing interest in the Dutch gaming market.

The Netherlands’ existing gambling law originally took effect in 1964 and not many changes have been introduced to it since then. Needless to say, online gambling services are not covered by that law.

Multiple online gambling operators have been targeting Dutch players for years now. Some of these operators are licensed within the European Union, others hold licenses from overseas territories. However, there are also black market operators that too have access to Dutch customers. And the lack of proper regulations practically strips Kansspelautoriteit of the necessary power to act properly against these black market operations.

In the regulator’s annual report, Mr. Suyver cited a late 2017 ruling by the Dutch high court that allowed for payment service providers to continue processing funds between Dutch players and internationally licensed gambling operators. The regulator previously argued that the provision of unlicensed gambling services to Dutch customers actually represented promotion of games of chance which is illegal under the country’s exiting Betting and Gaming Act.

Problem Gambling and Self-Exclusion

Apart from urging lawmakers to hurry up and regulate the Dutch market, Mr. Suyver also dwelt on problem gambling in Kansspelautoriteit’s annual report and on how the issue should be tackled once the new regulatory regime is in place.

The regulator pointed out that funding will be needed so that problem gambling is controlled and gambling customers are protected effectively and are treated just as effectively if they show signs of gambling addiction. According to Kansspelautoriteit’s Chairman, a registry for self-exclusion should also be part of the measures to be adopted by the Netherlands for effectively combating problem gambling.

According to the 2009 Study on the Nature and Extent of Problem Gambling in Netherlands, 87% of the country’s residents were reported to have gambled in their lifetime. Of them, approximately 1% of all individuals aged 16 and over showed sign of problem gambling behavior or addiction. The yearly prevalence rate of problem rate has remained relatively stable in the country at about 0.5% and similar to other European countries such as Denmark.

While the above figure is significantly lower than what has been recorded in other parts of Europe and the rest of the world, regulators and other parties have expressed concerns that the planned expansion of the Dutch gambling market and its opening to online gambling services could result in an increase in the number of people with gambling-related issues, if no proper measures are taken in due course.

Final Thoughts

According to information from the European Gaming and Betting Association, the Dutch unregulated online gambling market is worth around €212.6 million. It is larger than Spain’s regulated market (€175.9 million) as well as Italy’s (€210.6 million), among others. With the lack of proper regulations, the Netherlands annually loses millions of euro in tax money from online gambling.

Online gambling is poised to grow even further as tech-savvy millennials are set to gradually take over as the majority of global gambling’s customer base. In the Netherlands, in particular, the iGaming sector seems to be faring quite well and it is rather surprising that the country’s government seems to be hesitant to capitalize on online betting and gaming activities, while putting in place responsible gambling controls to regulate the field and protect players at the same time.

As mentioned above, Dutch lawmakers are expected to introduce the country’s new gambling law in early 2019. However, it is yet to be seen whether they will be able to meet that deadline, particularly given the fact that they now have just nine months to act.

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