Dutch Gambling Updates: Date of entry into force postponed to April 2021, final secondary legislation published, and more

On 19 January 2021, the Dutch (outgoing) Minister of Legal Protection, who is responsible for online gambling policy, published a letter in which he announced that the entry into force date of the Remote Gambling Bill (Wet Kansspelen op Afstand) (the “Bill”) has been postponed again. According to the Minister, it has become clear that the former entry into force date of 1 March 2021 is no longer feasible because a careful implementation requires more time. For this reason, it has been decided to postpone the entry into force date of the Bill to 1 April 2021, with the first licences being issued as of 1 October 2021. This way, the Dutch Gambling Authority (Kansspelautoriteit) (the “KSA”) and the gambling sector should have enough time to finalise their preparations. The Minister also confirmed that the cooling-off period will be extended for a corresponding period. In the letter, the Minister also responded to several motions that were adopted by the Dutch Parliament last summer. The motions and the response of the Minister will be further explained below.

Last week, two major steps have been taken in the process of opening up the Dutch market. Firstly, the Dutch Council of State (the “Council”) provided its opinion on the secondary legislation under the Bill and, secondly, the Dutch Ministry published the final versions of said legislation. The KSA will now have to transpose the Bill and the secondary legislation into licensing conditions and introduce a procedure for granting licences for remote (online) gambling. In respect of the next steps, it is important to note that, as a consequence of the resignation of the Dutch government, several letters on (online) gambling have been declared controversial. This means that the letters will not appear on the parliamentary agenda until a new government has been formed. This could cause additional delays.

Shortly after the publication of the final version of the secondary legislation, the KSA published an updated communication calendar, confirming a number of shifts in the timeline up to the opening of the Dutch market for online games of chance.

This article elaborates further on the Minister’s responses to the adopted motions, the Dutch Councils opinion on the secondary legislation and the final versions thereof and sets out the updated timelines running up to the opening of the Dutch market for online games of chance.

Minister’s reaction on several motions

During a debate on the Remote Gambling Decree (Besluit kansspelen op afstand) (the “Decree”) in the summer of 2020, several motions were submitted and eventually adopted by the Dutch Parliament (see our earlier post). Recently, the Dutch Minister responded to four of those motions.

The first motion calls on the Dutch government to put the need to deal with providers of unlicensed games of chance on the agenda of all EU Member States. The aim of this motion is to highlight the importance of addiction prevention within the EU. The Minister indicated that he endorses the importance of dealing with the issues surrounding unlicensed gambling and addiction to gambling at an EU level. According to the Minister, the Dutch government will work towards an EU approach to address unlicensed gambling websites by, inter alia, making bilateral agreements with other EU Member States. The Minister explained that the KSA has reached several cooperation agreements, including with Alderney and the Bailiwick of Guernsey and that Memorandum of Understandings (“MoU’s”) were concluded in 2020 with Malta, Sweden and France. In such MoU’s, agreements are made with the regulator in the specific country to share information regarding (future) providers of games of chance and to cooperate in the field of enforcement. If a Maltese licensed provider, for example, offers unlicensed games of chance in the Netherlands, the Maltese regulator can share this with the KSA. The Minister further indicated that MoU’s with Belgium and the United Kingdom are expected to follow shortly.

The second and third motions call on the Dutch government to (i) strive for a level playing field for gambling providers when developing its gambling policy, (ii) investigate the consequences for the remittance of state lotteries entering the online market in other EU countries, and (iii) assess how the different remittance rates of state lotteries and/or lotto games in the Netherlands relate to the remittance rates in other EU countries. In reply to these motions, the Minister, firstly, explained that the Dutch government is of the opinion that, with regard to lotteries, similar rules on access and behaviour should apply. On the basis of developments in other countries, such as the United Kingdom and Norway, the Minister concluded, furthermore, that there is no causality between the regulation of online gambling and the decline in lottery revenue.

Finally, the Minister replied to the motion requesting the Dutch government to reconsider the recently introduced requirement for land-based games, such as casinos and gambling arcades, to maintain a visitor registration database for all customers. The Minister indicated that he considers the frequency of visits as an important indicator of (emerging) problematic gambling behaviour, among other indicators, such as actual playing behaviour. According to the Minister, the proposed register for problem gamblers (Cruks) can only be implemented properly if a visitor registration applies. The Minister was supported by the Dutch Data Protection Authority (Autoriteit Persoonsgegevens) (“DPA”), that stated that registration of visitors is necessary to detect addiction. The Minister mentioned that he does not agree with the idea that implementing visitor registration would place too high a financial burden on land-based providers. The Minister has, therefore, decided to maintain visitor registration.

Final versions of the secondary legislation published

On 3 February 2021, the Council published its opinion on the secondary legislation under the Bill. From this opinion, it follows that the Council is quite critical and questions whether this secondary legislation might adversely impact the market channelisation ambitions of the primary legislation. According to the Council, the secondary legislation is very detailed and comes with significant administrative burdens for, in particular, smaller operators, making regulated gambling not attractive enough for unlicensed providers to get licensed. The Council, therefore, advises to clarify the effectiveness of the draft Remote Gambling Decree (Besluit kansspelen op afstand) (the “Decree’’) and the achievability of the intended degree of channelization.

The Council, furthermore, questions the effective enforcement by the KSA of unlicensed providers that are established abroad. The Council highlights that blocking websites could be an important instrument in this respect and advises the Dutch government to clarify how adequate enforcement is guaranteed.

Just like the Minister and the DPA, as mentioned above, the Council found that the requirement to maintain a visitor registration database for all customers is necessary and proportionate, and contains sufficient safeguards to protect the registered personal data. The summary of the Council’s opinion can be found here (in Dutch).

Quickly following the publication of the opinion, the final versions of the Decree and the Regulation on Remote Gambling (Regeling kansspelen op afstand) (the “Regulation”) have been published. As said, these gambling regulations are both secondary legislation under the Bill and include the implementation and further interpretation of the Bill. The first part of the secondary legislation, the Decree, further specifies the licensing system for remote gambling and lays down rules for recruitment, advertising and addiction prevention. Amongst other things, requirements for the system of licence holders, the prevention of money laundering and match-fixing are provided, together with requirements for the registration and safe storage of data (see our previous post in this regard). The changes to the final versions of the draft secondary legislation appear to be limited despite the critical tone of the Council.

Next steps: updated timelines

Preparation will be key in the process of obtaining a licence and, at this moment, there is enough information available to start with the preparation of the licence application. The additional delay is thus no reason to sit back and relax. Potential applicants for an online gambling licence must comply with stringent conditions in order to be eligible. The application itself requires a large number of documents to be prepared and does not come cheap. The KSA has indicated that an application will cost EUR 48,000 (which is non-refundable, should the application be unsuccessful).

In order to speed things up, we would recommend reading our previous article, in which we discussed, amongst other things, how to prepare for the application procedure. We also shortly discussed the KSA’s communication calendar, which sets out all conditions that should be fulfilled prior to the entry into force date. On 9 February 2021, this communication calendar has been updated by the KSA. The communication calendar is a helpful tool to prepare and it can be found here (in Dutch). The updated calendar runs from February 2021 to October 2021 and shows a number of shifts in the timeline up to the opening of the Dutch market for online games of chance in October 2021. Below you can find a short English version of the calendar.

* The KSA notes that these expected final versions are preliminary final versions. This means that the versions will in principle not be amended, but that they can only become officially final with the entry into force of the Bill.