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Although being known as a liberal country, Netherlands has restrictive laws and regulations on online gambling. Most types of online gambling are prohibited in this jurisdiction. In this article, information is based upon primary and secondary gambling legislation as well as certain policy documents of the Netherlands Gambling Authority (NGA).
The primary legislation in the Netherlands includes:
- Betting and Gambling Act 1964 (BGA)
- Betting and Gambling Tax Act 1961 (BGTA)
- Remote Gambling Act (RGA)
- Notably, the RGA is due to enter into force on 1 March 2021 and will amend the BGA and BGTA to enable the licensing of remote games of chance.
The regulation of gambling under the BGA is centered on a prohibited-unless-licensed approach. According to this legislation, a game is defined as a game of chance when it meets the following conditions:
- The game provides participants with prizes or premiums to compete;
- The winners of these prizes and premiums are designated through a means over which the players are unable to exercise a dominant influence.
The mentioned prizes and premiums constitute all goods attached to an economic value that accrued due to the participation of players, as contained within the Article 3(2) BGTA.
The BGA prohibits the promotion of unlicensed gambling, according to Article 1(1)(b).
Article 1(1)(c) BGA prohibits participating in unlicensed games of chance.
Secondary legislation includes:
- Remote Gambling Decree (RGD)
- Remote Gambling Regulation (RGR)
- Decree Recruitment, Advertising and Addiction Prevention (DRAAP)
- Regulation Recruitment, Advertising and Addiction Prevention (RRAAP)
Policy documents are composed of:
- Guidance on Assessing Games of Chances
- Guidance on Gambling Advertising
- AML Guidance
- Code of Conduct for Promotional Games of Chance 2014
- Fining Policy Rules Remote Gambling
- Draft Policy Rule on the Cooling-Off Period
- Policy Rules Non-Incidental Article 3 Lottery Licenses
Games of chance that are considered a promotional game of chance are exempt from the requirements to be licensed under Article 1(1)(a) BGA.
Promotion and Advertising Restrictions
In the Netherlands, underage is prohibited. Games of chance cannot be offered to people who are under 18 years old.
Some of the advertising restrictions imposed by the jurisdiction include:
- Advertising may not be aimed at minors nor respond to their needs and may not instigate high-risk playing behavior, which can lead to gambling addiction;
- Any gambling-related advertising may not be broadcast between 6:00 am and 9:00 pm on television, except for neutral messages concerning the sponsorship of a television program. Lotteries, apart from the instant lottery, the restricted advertising time is from 6:00 am to 7:00 pm;
- Advertising during sporting contests is interdicted, other than on the licensee's website, for bets on those particular contests;
- It will be prohibited for remote gambling operators to use professional athletes, role models who are under the age of 25, or those where the target audience of the role model are minors and young adults from 18 to 24 years old. This will not prevent the sponsorship of professional athletes (individuals or teams).
Online/Mobile/Digital/Electronic Media
Promotion restriction on unlicensed games of chance will be expanded with the entry into force of the RGA in order to cover such unlicensed services. As a result, affiliates, others involved in advertising, and those who otherwise facilitate such offers like software providers and payment service providers will fall under the Scope of Article 1(1)(b) BGA.
Enforcement and Liability
According to the BGA, any entity that offers or promotes unlicensed games of chance violates this legislation. Such entities are at risk of receiving an administrative fine that is as high as €870,000. In case the fine surpasses this amount, 10% of the turnover in the fiscal year prior to the decision will be applied. The amount of the find is established by NGA with the Fining Policy Rules Remote Gambling.
The NGA can cease or desist orders on entities that do not comply with the BGA.
Those who knowingly join in unlicensed games of chance could be subject to enforcement measures. However, up to now, such cases have not arisen in practice.
As aforementioned, Netherlands prohibits underage gambling. As of 1 January 2020, gambling operators have been required to visibly verify the age of players in the Netherlands before the registration process is completed, despite the fact that these operators are not locally licensed.
Over the last few years, numerous administrative fines against the operators who were breaching the BGA by offering unlicensed games of chance on the Dutch market have been issued.
New and more stringent policy rules were published on 27 February 2019. The basic fine amount has been increased from €150,000 to €200,000, and it can still go up based on many factors, including the number of websites, casino games, or the amount of the prizes offered.
On 19 March 2020, the press release issued by the NGA indicates that advertisements for remote gambling offers in relation to Covid 2019 are deemed to be a fine-increasing circumstance, increasing the fine by at least €50,000. Fourteen advertisers promoting illegal remote games of chance and using the terms such as "corona-free gambling" were published on the website of NGA on 24 July 2020.
Moreover, the NGA also undertakes periodic research on affiliate marketing for remote games of chances and has subsequently cease and desist orders on several affiliates. In the published decisions, affiliates were given 48 hours, one week, or two weeks to terminate all advertising activities for unlicensed operators and be subject to a penalty of €1,500 per day with a maximum penalty of €21,000.
Concerning gambling debts, unless there has been fraud, deceit, or a scam, gambling debts are not enforceable. The lack of enforceability does not apply to prizes or premiums arising from gambling licensed under the BGA.
Anticipated Reforms
The law will be evaluated on a three-year basis after it has entered into force, which may result in alterations to the remote gambling regulatory regime at some points thereafter.
The NGA published the Market Vision for games of chance on 9 July 2020, which makes more room for new providers offering attractive games of chance in the future. This also means the current state-run gambling monopolies must finally be abolished. Privatization of the Netherlands Lottery Organisation can also be expected to be a point of discussion in the future.
The Remote Gambling Act (Koa Act) which was adopted by the Senate in February 2019 supplements and changes the current law regarding to online gambling in the Netherlands. This act legalizes and regulates online games of chance under strict conditions. Moreover, Koa Act introduces new requirements for advertising and recruitment. These requirements will apply for providers of games of chance from 1 April. However, according to Dutch legislators, although the implementation is proceeding energetically, it needs more time to implement the act carefully and allow gambling section to complete preparation. The opening market will then take place on 1 October 2021.
