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How is gambling regulated in the Netherlands?

Here’s how the gambling industry is regulated in the Netherlands

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How is gambling regulated in the Netherlands? Source: pexels.com

Gambling has always been considered a shady industry, falling under the close attention of regulators. Due to the recent changes, Dutch online gamblers can now legally bet on sports and play casino games.

The regulatory body responsible for gambling laws is called Gambling Authority (Kansspelautoriteit, “KSA”). KSA regulates casino gaming, poker and bingo games, sports and fantasy betting, lotteries and other betting types. “Social” gaming with no prize in money or money’s worth as well as skill games and competitions with no element of chance do not fall under the KSA competence as they are not considered gambling activities.

On the 1st of April 2021, the Remote Gambling Act (KOA) finally came into force. It allowed the market to open six months later on the 1st of October.

Online gambling had been banned in the Netherlands for a long time. However, authorities couldn’t help but notice that public desire to participate in online games of chance overweighs legal obstacles. Turning to illegal providers brings more financial and psychological risks to consumers. Thus, the new law enabled the licensing of remote games of chance. The first ten operators have already received their licences.

Initially, the KOA was scheduled to enter into law on 1 July 2020, however, it was pushed back several times due to Covid-19 disruptions.

Overall, gambling in the Netherlands is regulated under the primary legal documents: Betting and Gambling Act 2021 (Wet op de kansspelen 2021, “BGA”) and Betting and Gambling Tax Act 2021 (Wet op de kansspelbelasting 2021, “BGTA”).

It is prohibited to:

  • offer games of chance without the requisite licence (Article 1(1)(a) BGA);
  • facilitate unlicensed games of chance (Article 1(1)(b) BGA); and
  • knowingly participate in unlicenced games of chance (Article 1(1)(c) BGA).

Prizes and premiums include goods to which an economic value can be attached, such as virtual (in-game) goods.

A stake is not required for a game to fall under the scope of the Dutch gambling laws, meaning that free-to-play games can be also considered a game of chance if players are generally unable to exercise a dominant influence over the distribution of the prizes or premiums.

The main change brought by KOA to the existing legislation is that people who want to gamble online can now do it legally with the authorised providers. There’s a Gaming Guide of the Gaming Authority where players can see which gambling companies have a licence and which games they offer.

Gambling operators need a proper licence to offer online casino games or online betting, as well as a permit to operate gaming machines or an amusement arcade. The providers also have to pay betting and lottery tax.

All the providers of both online or offline gambling games must be connected to the Cruks register which is short for the Central Exclusion Register for Games of Chance (Centraal Register Uitsluiting Kansspelen). They should enact KYC procedures and check if their customers are at risk of gambling addiction. People registered in Cruks have a history of gambling addiction issues previously reported to KSA. If they are in the list, operators cannot allow them in or register them online.

The gambling companies are responsible for their customers developing an unhealthy addiction along with the players themselves. If you as a gambling provider notice a customer playing too often and/or for a long time, you must intervene. If that does not help, you can report them to the Gaming Authority (in Dutch).

In this “responsible gaming” model, a hierarchy of potential interventions can be used, ranging from information provision, to mandatory exclusion, and recommended telephone, online or face-to-face counselling / treatment / therapy. Collaboration with the client is important to identify problem gambling in a timely manner and take concrete steps to prevent harm and protect players.

KSA pays special attention to protecting vulnerable youth from a potential addiction. For instance, the regulator fined the Electronic Arts publisher €10 million in 2020 over FIFA loot boxes – virtual treasure chests containing undisclosed items that can be used in games.

Ultimate Team, which derives hundreds of millions of dollars in revenue for publisher and developer EA each year, offers players packs of virtual cards. These card packs contain a random assortment of items, including players of varying potency for their virtual teams. Generally, the better the player, the lower the chance of obtaining them from a pack. Although they’re not described as such in-game, Ultimate Team’s card packs are loot boxes. Therefore, the Dutch court decided warning the public about unlawful commercial practises and potential risks outweighed EA’s interest in preserving its reputation.

The promotion and advertising activities for the games of chance are also subject to strict rules. There’s the Advertising Code that defines how an honest and straightforward ad should look like. For example, suggesting that participation in Games of Chance can be a solution to financial or other problems is considered illegal.

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