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What is the legal definition of gambling?
The definition of a game of chance is found within Article 1(1)(a) Betting and Gambling Act, whereby a game is one of chance when (i) an opportunity is provided for participants to compete for prizes or premiums, and (ii) the winners of these prizes or premiums are designated through a means over which players are generally unable to exercise a dominant influence.
In contrast to numerous jurisdictions a stake is not required, and therefore games which are free to play will constitute games of chance in the Netherlands in instances where both of the other two components are satisfied.
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What legislation applies to gambling? Please provide a summary of the legal/regulatory framework.
The central piece of primary legislation which is key for the regulation of gambling in the Netherlands is the Betting and Gambling Act (Wet op de kansspelen, “BGA”), which is accompanied by the Betting and Gambling Tax Act (Wet op de kansspelbelasting, “BGTA”). Both Acts were amended, effective as of 1 April 2021, to accommodate the regulation of remote games of chance, following the entry into force of the Remote Gambling Act (Wet kansspelen op afstand), which took effect on that date. Other relevant primary legislation includes:
- Public Administration (Probity Screening) Act (Wet bevordering integriteitsbeoordelingen door het openbaar bestuur);
- Money Laundering and Terrorist Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme, “AML Act”);
- Media Act 2008 (Mediawet 2008); and
- Sanctions Act 1977 (Sanctiewet 1977).
In terms of remote gambling there is a plethora of secondary legislation, parts of which also apply to other “high risk” games of chance, notably land-based casino and slot machine arcades. Such secondary legislation includes:
■ Remote Gambling Decree (Besluit kansspelen op afstand).
■ Remote Gambling Regulation (Regeling kansspelen op afstand).
■ Decree on Recruitment, Advertising and Addiction Prevention (Besluit werving, reclame en verslavingspreventie).
■ Regulation on Recruitment, Advertising and Addiction Prevention (Regeling werving, reclame en verslavingspreventie).
■ Implementation Decree AML Act (Uitvoeringsbesluit Wwft).
■ Implementation Regulation AML Act (Uitvoeringsregeling Wwft).
■ Games of chance Decree (Kansspelenbesluit).
To supplement primary and secondary regulation the NGA has issued a number policy documents, a limited number of guidance documents. These include:
■ Remote Gambling Model Licence (Modelvergunning kansspelen op afstand).
■ Policy Rule on Granting Licences for Organising Remote Games of Chance (Beleidsregels vergunningverlening kansspelen op afstand, “Remote Gambling Policy Rule”).
■ Policy Rule on Publication Remote Gambling Licences and Licensees (Beleidsregels openbaarmaking VVKOA).
■ Policy Rule on the Temporary Exemption for Inspection Body (Beleidsregels ontheffing keuringsinstelling).
■ Policy Rule on the Use of Word Mark by Remote Gambling Licensees (Beleidsregels woordmerk kansspelen op afstand).
■ Policy Rule on the Duty of Remote Gambling Licensees to Provide Information (Beleidsregels informatieplicht).
■ Policy Rule on Responsible Gambling (Beleidsregels verantwoord spelen).
■ Policy Rule on the Involuntary Registration in the Central Exclusion Register (Beleidsregels onvrijwilige inschrijving register).
■ Policy Rule on Providing Information for Scientific Research Gambling Addction (Regeling verstrekking gegevens voor onderzoek naar kansspelverslaving).
■ Fining Policy Rules Unlicensed Remote Gambling (Boetebeleidsregels kansspelen op afstand zonder vergunning, “Fining Policy Rules”).
■ Enforcement Policy Rules – Prioritisation of Enforcement Investigations (Handhavingsbeleid – prioritering van handhavingsonderzoeken, “Enforcement Policy Rules”).
■ Guidance on Assessing Games of Chance (Leidraad beoordeling kansspelen).
■ Guidance on the AML Act (Leidraad Wwft).
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Which body/ies regulate gambling?
The Netherlands Gambling Authority (Kansspelautoriteit, “NGA”) enjoys sole responsibility for the regulation, at the national level, of all forms of gambling in the Netherlands.
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Are licences available? If so: a) What is the duration of a licence? b) What types of licences are available? c) Are there different types of licences for B2C and B2B operators? d) Do software suppliers need to be licensed?
Yes, licences for remote gambling are available.
a. What is the duration of a licence?
Licences can be awarded for a period of up to 5 years.
b. What types of licences are available?
There is only a single type of remote gambling licence available. However, it can cover up to four different categories. Whether an individual remote licensees licence will cover one or any combination of categories will depend upon what they have applied for. Each licence, as awarded, will note the categories which the operator is entitled to operate.
The four categories are:
(i) casino games in which the players play against the licensee (e.g., bingo, roulette, slot machines);
(ii) casino games in which the players play against one another (e.g., poker);
(iii) bets on events occurring during a sporting contest or on the outcome of a sporting contest (e.g., fixed odds betting, pool betting, betting exchange); and
(iv) bets on the outcome of horse racing and harness racing.
c. Are there different types of licences for B2C and B2B operators?
No licences are required for B2B suppliers.
d. Do software suppliers need to be licensed?
No, in terms of remote gambling licences can only be obtained for offering remote games of chance. Licensed B2C operators are responsible for ensuring that their suppliers are compliant with all relevant provisions, and they must also check that their suppliers are not serving the locally unlicensed market.
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Are any types of gambling products prohibited?
All games of chance which are unlicensed are prohibited, unless they are subject to one of the minor exemptions from this prohibition, such a promotional games of chance. This entails that games of chance which are offered via means of remote communication to those in the Netherlands, without a licence awarded by the NGA, are also prohibited. This is regardless of whether they are licensed elsewhere, such as in Curacao or Malta.
Within the remote gambling regime certain products are indeed prohibited, these being; remote lotteries, betting on the outcome of non-sporting events (thus also including betting on the outcome of lotteries) and games where players can lose more than their stake (e.g., spread betting). Various restrictions also apply in terms of sports-betting with a view to the prevention of match-fixing, such as the prohibition of bets on negative events during a competition (e.g., red cards).
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What is the headline application procedure? Please include any eligibility and other application requirements, including approximate application costs and any need to establish a local presence.
In terms of remote gambling operations: There is no need for a local presence in the Netherlands so long as the applicant is established in the EU/EEA. That said, the licence applicant will be required to have a control database (“CDB”) in the Netherlands, which essentially is the local data vault solution. They are also required to have an “addiction prevention representative” who will interface with the NGA and other local stakeholders on matters of addiction prevention; not only must such a representative have a thorough understanding of responsible gambling they must also be able to bind the licensee for whom they (will) work.
Licence applications can only be submitted via the application portal which the NGA has established for such purposes. A number of polices will have to be submitted, addressing matters such as responsible gambling, anti-money laundering and the prevention of match-fixing, and outsourcing. Numerous supporting documents will have to be uploaded on a variety of matters including testing and certification of the game system, the ability to connect to the central register of excluded players (“CRUKS”) and measures taken for the separation of player funds.
The most crucial aspect of the application process is establishing the reliability of the applicant entity. The reliability of the applicant must be “beyond doubt”, and a very thorough review will be conducted; this goes beyond the applicant entity itself, capturing those all the way up to the chain of control. However, it also captures so-called “ancillary entities” to the applicant, and can thus catch entities with no direct relationship to the applicant entity and the immediate group structure. Information must be provided on any relevant antecedents, such as criminal matters, administrative sanctions, licences and unlicensed remote gambling offers in the Netherlands.
A non-refundable licence application fee of €48,000 must be paid in order for the NGA to assess the application. The NGA must reach a decision within 6 months, however the “clock stops ticking” whilst the applicant responds to one or more requests for information.
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Do individuals within the business need to be personally licensed or authorised? If so, please provide headline requirements.
No, there is no regime of personal licences. This does not entail that individuals avoid scrutiny though in terms of their reliability, as directors, shareholders and (de facto) policymakers will be included within the initial licence application. Should changes arise within these categories during the lifetime of the licence then the NGA must be informed within a fortnight, along with relevant supporting documentation. An assessment of the relevant person’s reliability will then take place, thus after their appointment as there is no system of “pre-approvals”.
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Is advertising of gambling permitted and, if permitted, how is it regulated?
As of 1 July 2023 advertising for remote gambling is only permitted online, as a consequence of the prohibition on untargeted advertising for remote gambling. This brought advertising in public spaces, as well as via media such as television and radio to an end. Advertising can only take place online when it is targeted, so as to exclude persons who qualify as “vulnerable”, with this category including young adults (18 to 23 year olds), but also minors, those who have excluded themselves from the operator’s offer and those displaying characteristics of risky gambling behaviour.
However, sponsorship for non-sporting matters is permitted until 1 July 2024, and until 1 July 2025 for sports events and competitions but only where the underlying agreements were concluded prior to 1 July 2023.
Online advertising is therefore only permitted where:
- Each individual is given the opportunity to provide consent to receiving the advertisement.
- Best available measures are deployed to exclude those belonging to a vulnerable group from receiving the advertisement (as well as those who did not grant consent must also be excluded).
- Best available techniques are used to establish that 95% of those who saw the advertisement were of at least 24 years of age.
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Are marketing affiliates permitted? If so, are they licensed or regulated?
Activities undertaken by affiliates are most certainly regulated, and this occurs in the same manner as that which pertains to all B2B suppliers servicing licensed remote gambling operators. Licensed remote gambling operators are the nexus for the application of regulatory conditions and requirements, they must be able to ensure that they can control their suppliers so that regulatory requirements are met at all times.
The NGA does not maintain a direct relationship with suppliers, and there is no form of licensing for them.
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What are the penalties for offering, facilitating or marketing unlawful gambling, and can the gambler be penalised for participating in unlawful gambling?
Article 1(1) BGA establishes three prohibitions in relation to games of chance:
Offering unlicensed games of chance;
Promoting and otherwise facilitating unlicensed games of chance; and
Knowingly participating in unlicensed games of chance.
The threshold for establishing whether unlicensed remote gambling offers are made available in the Netherlands is extremely low. Essentially, as long as consumers in the Netherlands can participate in such offers without doing anything out of the ordinary on their computer, then the offer will be considered as being in breach of this prohibition. There is no requirement for the offer to be targeted towards the Netherlands in any form. Followers of developments in the Netherlands may well recall the infamous prioritization criteria which the NGA applied in order to establish whether an operator should be prioritized for enforcement measures. Broadly speaking these criteria entailed that the NGA’s efforts would be directed towards those offers which targeted the Netherlands. Compliance with the criteria, whilst having a remote offer available in the Netherlands, would only demonstrate that the offer did not target the Dutch market; it did not legitimize the underlying offer which remained in breach of Article 1(1)(a) BGA.
Until 1 April 2021 Article 1(1)(b) BGA only prohibited the promotion of unlicensed games of chance. In terms of enforcement against unlicensed remote gambling offers the NGA’s hands were tied in terms of taking action against the supply chain. Successful enforcement measures were only realized against affiliates, and an attempt to subject a payment services provider to a cease and desist order was ultimately struck down before the courts in 2017. The remote gambling reforms have broadened the scope of this provision, thereby providing the NGA with an explicit foundation for enforcement measures against those who facilitate locally unlicensed offers, such as PSPs, software suppliers and others.
End users can also be subject to enforcement measures for engaging in unlicensed gambling activities; however, the numerous enforcement measures of the NGA in terms of remote gambling have been primarily directed against operators, and against affiliates to a lesser extent. There are no publicly known instances of the NGA seeking to apply the prohibition contained within Article 1(1)(c) BGA against individual players.
Enforcement against remote gambling falls within the package of competences attributed to the NGA, with administrative measures being the weapon of choice. Criminal enforcement is also possible, but this falls outside the hands of the NGA and is subject to a covenant with the public prosecutor. Enforcement against locally unlicensed offers, as well as the advertising thereof, takes place through a combination of orders subject to a penalty and administrative fines.
The maximum administrative fine currently stands at €900,000 (or 10% of the turnover during the previous year if this exceeds €900,000). Under the NGA’s fining policy, the starting fine for illegal operators is set at €600,000. In instances where the NGA considers that the offender’s turnover exceeds €15 million, then the fine will be 4% of turnover. Fine increasing circumstances also apply, such as where illegal offerings are aimed at minors or where no information is provided on addiction prevention. A recent development is the imposition of a order subject to a penalty payment upon a locally unlicensed operator, followed by an administrative fine as a punitive sanction for the same breach of the law.
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Briefly detail key requirements for licensees.
The key requirement is that the licence applicant’s reliability is “beyond doubt”. This does not only include the applicant entity itself, but also its entire corporate structure and often entities falling outside the (immediate) corporate group. The NGA looks back at antecedents during the previous eight years, and after 31 March 2022 the NGA will take an extremely negative view of any previous unlicensed presence on the Dutch market; experience demonstrates that the NGA is strict in this regard.
Whilst reliability is key, an applicant must also assure the NGA that they are up to speed on regulatory requirements through submitting a swathe of policies upon application; these cover a range of topics such as responsible gambling, advertising, prevention of AML and match-fixing, internal monitoring and outsourcing. Upon application an applicant must also demonstrate that their game system fully satisfies local technical requirements, as well as providing detailed documentation regarding the control database (data vault) into which transactional data must flow in (near) real time once operational; rigorous testing of the database is a key step in the licensing process.
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Briefly detail key anti-money laundering requirements.
Remote gambling operators are subject to a number of requirements pertaining to the prevention of money-laundering. There is a degree of overlap between requirements stemming from AML legislation and those pertaining to player identification and verification procedures in the remote gambling regulations.
Operators must complete customer due diligence checks on all individuals who seek to open an a player account. No transactions are permitted prior to the completion of this stage; in contrast to some jurisdictions temporary accounts are not permitted. Players cannot deposit funds or participate prior to full customer due diligence checks being carried out.
Not only must operators verify the identity and age of a prospective player, they must also allocate a risk profile to that individual. In this regard, operators must, for example, also check whether the person is a politically exposed person and/or contained on any relevant sanctions list. However, the registration process also includes elements which are specific to gambling law and are not derived from AML legislation. Upon registration individuals must nominate an account (held with a bank, payment services provider or electronic money institution) into which all withdrawals will be made (including those which the player does not initiate); the operator must ensure that this so-called “contra account” is held by the same person as the individual opening the player account. The operator must also check that the individual is not registered in the central database of excluded players (CRUKS) before completing the registration process.
Once participation is underway, transactions must be monitored and operators must report unusual transactions to the FIU.
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Briefly detail key responsible gambling (or safer gambling) requirements.
Remote gambling operators are subject a to a duty of care whereby they must prevent excessive participation in their products to the greatest possible extent; this duty applies to all licence holders under the BGA. Remote operators are also under a duty to record, analyse and evaluate data on players’ gambling behaviour.
As already noted, an operator cannot accept an individual as a player if that person is contained within the central database of excluded players; operators must also check an individual against this database upon each log-in. Inclusion in the database means that an existing player should be denied access.
Operators are required to intervene should there be signs of excessive participation with an array of intervention measures being prescribed in the secondary regulations.
Furthermore, operators cannot offer players bonuses after such an intervention measure has been taken. The more severe the intervention measure the longer the period that bonuses cannot be offered. For example, a bonus cannot be offered to a player for 30 days after the operator has sent a message to the player, via the gambling interface, to inform the player about their behaviour, whilst bonuses cannot be offered for 90 days following an operator advising a player that they avail themselves to operator level self-exclusion measures
Ultimately, if an operator has advised a player to self-exclude via CRUKS and that individual refuses to do so then the operator is able to request that the NGA registers the player in CRUKS involuntarily.
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Briefly detail shareholder reporting and approval threshold(s).
It is important to note that once the licence has been awarded there are no prior approval processes for changes in shareholders or other categories of relevant persons (both legal as well as a natural). Notification to the NGA can only take place after the fact, and will trigger an assessment of the new person’s reliability in the context of the applicant’s structure. It is not beyond the realms of possibility that this could have negative implications for an existing licence holder, or for a licence applicant if the change arises whilst an application is pending.
Not only must changes in shareholders be reported but so must changes in directors and (de facto) policy makers. However, in terms of shareholders specifically, the relevant threshold is a 25% interest, direct or indirect, in the licence holder. The NGA upholds different thresholds for determining whether an entity which has an “ancillary” relationship to the applicant/licence holder is relevant for the purposes of the (ongoing) reliability assessment.
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Briefly detail the regulator’s enforcement powers, including sanctions.
Remarkably, even after the second anniversary of the first remote gambling licensees having gone live the NGA has not published a policy on supervision and enforcement of the licensed remote market. Consequently, it remains somewhat opaque as to what the NGA’s preferred modus operandi will be in relation to individual breaches, in light of the severity of the underlying infringement. That said, the options available to the NGA are as follows:
- Warning;
- Binding instruction;
- Order subject to a penalty payment (often referred to as a “cease and desist order”); or,
- Administrative fine.
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What is the tax rate?
For all forms of gambling the tax rate is 29.5%, but the actual tax base differs across the different types of licensed gambling. For remote gambling operators it is gross gaming revenue or commission/fees received where appropriate. An additional gambling levy, of 1.95% GGR, also applies.
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Are there any proposals for changing gambling laws and regulations in the next 12-24 months? If so, please provide an overview of the proposed changes and likely timing.
Proposals are likely to be advanced so that there are mandatory ceilings in terms of the limits which players must establish upon opening an account; currently players are free to set the limits at any values which they see fit. As such, the protection such limits afford is limited. It is understood that it will not be a case of one size fits all as those who can demonstrate that they can afford more will be able to set higher limits. Additionally, the competent Ministry is also looking at introducing over-arching limits, so that one limit will bind all licensed operators (instead of a player setting limits with each operator individually).
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What key regulatory developments are proposed or on the horizon in the next 12-24 months?
The remote gambling regime will be subject to review in 2024, and this will likely result in changes to the regulatory regime. In Q4 2023 it remains to be seen how this evaluation process will take shape. It can also be expected that MPs who are critical of the whole licensing process (and were opposed to its introduction in the first place) will use the opportunity to attempt to add further restrictions on the market.
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Do you foresee any imminent risks to the growth of the gambling market in your jurisdiction?
The most pressing threat is the prohibition on untargeted advertising, which entered into force on 1 July 2023; at the time of writing the extent to which this will have an impact on the market is unclear. This will surface in the next half year, and it will also be interesting to see the extent to which it stifles the ability of new market entrants to gain recognition amongst the player population. Furthermore, upcoming developments around player limits and whatever arises out of the 2024 evaluation could also pose risks.
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If a gambling start-up was looking for a jurisdiction in which to commence its activities, why would it choose yours?
Whilst the regulatory regime is stringent, and the NGA appears fairly unremitting in its supervision of the market, the regulatory provisions are mostly fairly clear. Whereas uncertainties prevailed when the regime was “fresh off the press” many aspects have since become clearer, and clarity continues to spread (with AML being one such area at present). However, along with many other European markets, the regulatory regime should not be taken lightly; full attention to regulatory compliance is required.
The Netherlands: Gambling Law
This country-specific Q&A provides an overview of Gambling laws and regulations applicable in The Netherlands.
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What is the legal definition of gambling?
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What legislation applies to gambling? Please provide a summary of the legal/regulatory framework.
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Which body/ies regulate gambling?
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Are licences available? If so: a) What is the duration of a licence? b) What types of licences are available? c) Are there different types of licences for B2C and B2B operators? d) Do software suppliers need to be licensed?
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Are any types of gambling products prohibited?
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What is the headline application procedure? Please include any eligibility and other application requirements, including approximate application costs and any need to establish a local presence.
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Do individuals within the business need to be personally licensed or authorised? If so, please provide headline requirements.
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Is advertising of gambling permitted and, if permitted, how is it regulated?
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Are marketing affiliates permitted? If so, are they licensed or regulated?
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What are the penalties for offering, facilitating or marketing unlawful gambling, and can the gambler be penalised for participating in unlawful gambling?
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Briefly detail key requirements for licensees.
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Briefly detail key anti-money laundering requirements.
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Briefly detail key responsible gambling (or safer gambling) requirements.
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Briefly detail shareholder reporting and approval threshold(s).
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Briefly detail the regulator’s enforcement powers, including sanctions.
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What is the tax rate?
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Are there any proposals for changing gambling laws and regulations in the next 12-24 months? If so, please provide an overview of the proposed changes and likely timing.
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What key regulatory developments are proposed or on the horizon in the next 12-24 months?
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Do you foresee any imminent risks to the growth of the gambling market in your jurisdiction?
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If a gambling start-up was looking for a jurisdiction in which to commence its activities, why would it choose yours?