By Willem van Oort (*)

Channeling the flood: How (and why) regulated remote gaming will be coming to the Netherlands

Gaming consultant Willem van Oort is the founder of Gaming in Holland, the leading community for the gaming industry in the Netherlands. Gaming in Holland offers quality content and high level networking for representatives of the online, lottery, and land-based industries.

Contacto: willem@vanoort.com

Netherlands 
| 15/07/2016

After many years and delays, the Lower House of Dutch parliament has passed a bill to regulate online gaming in the country for the first time. What will this mean for iGaming in the Netherlands? And when will operators finally be able to legally enter the Dutch market?

Some facts and figures

The Netherlands has seventeen million inhabitants, of which 800,000-1,000,000 are estimated to gamble online.

The Dutch remote market (which is presently wholly unregulated) is valued at €220m/year.

In 2012, the present Gaming Authority (“Kansspelautoriteit”) was established.

Gambling and Dutch politics

The remote gaming bill that recently passed the Lower House represents a compromise (in time-honored Dutch fashion) between the principles of individual responsibility and paternal disapproval of “irresponsible” activities such as gambling. As a result, we have witnessed, over the last few years, many delays, hesitant legislators, and quite a few examples of legislative posturing to signal a Calvinist-tinged moral distaste of the activity of pursuing unearned wealth.

Yet ultimately, a large majority of legislators also recognized that remote gaming does not stop at a country's borders; and that regulation is therefore preferable to a wholly illegal and unregulated market.

What is next?

At this point, the Dutch remote gaming bill has only passed the Lower House. For the bill to become law, it must also pass the Senate. Because of the broad support for the bill in the Lower House, this should normally not be a problem.

In the Netherlands, the Senate is not able to change or amend legislation; it can only pass or reject. The current draft law will therefore be the final version to be enacted.

A timeline

The Dutch Senate has already scheduled the remote gaming bill to be debated in committee. If all goes well, a plenary debate and vote will be held in late 2016 or (very) early 2017. As laws come into force six months after publication, the Dutch remote market could effectively open as early as Q3 of 2017.

This best case scenario is dependent, however, on the Netherlands Gaming Authority's willingness (or ability) to consider remote license applications in the period between publication of the remote gaming law and the moment it comes into force. A later date, e.g., early 2018, is thus also entirely possible.

The Dutch government is currently looking to extract itself from its active role in the country's gaming industry: to merely regulate instead of to participate. But to what extent are the stricter of its new rules reflective of its own shortcomings as a responsible operator?

What could still go wrong?

At this point, the biggest threat to the Dutch remote gaming bill is further delays in the Senate. Lower House elections are currently scheduled for March 2017. If the bill has not passed the Senate some “reasonable” time before that date, the Senate could deem it politically convenient to let the next government propose an entirely new remote gaming bill.

Although at this point not particularly likely, the above scenario could certainly set the entire process back years.

Was it worth it? Reasons to be optimistic

Assuming (as we should) that the Dutch remote gaming bill will pass the Senate, there are several reasons to be optimistic about the future of remote gaming in the Netherlands.

Foremost, it is important that there will soon be a solid legal framework for remote operators to compete in and to offer their services. This will provide certainty and assurance to both the industry and consumers.

There will be no predefined limits on the number of available licenses. There will be healthy competition and a functioning market.

Was it worth it? Reasons to be pessimistic

By far the biggest drawback to the current bill is the proposed gaming tax rate of 29% of GGR, which does not even include an additional 2% levy to finance both the Gaming Authority and problem gambling prevention measures.

In such a high-tax environment, only a limited number of operators – forty to fifty at most, according to industry insiders – can be expected to flourish.

Even more worrisome is that legislators have clearly put a blind eye to the fact that a tax burden of 31% of GGR for licensed operators will mean that a large black market will continue to exist. The bill's stated ambition to “channel” 80% of Dutch online punters toward licensed operators will almost certainly not be achieved.

Additionally, the amended bill introduces several advertising restrictions that will make it harder for licensed operators to gain name recognition and to acquire market share.

Lotteries and land-based casinos

At present, the Netherlands is right in the middle of arranging the biggest changes in the country's gaming legislation in fifty years. Having addressed (and mostly settled) remote gaming, Parliament will soon start discussing new and wholly privatized lottery and land-based casino regimes.

More changes (and opportunities) are still to come.

In conclusion

The Dutch government is currently looking to extract itself from its active role in the country's gaming industry: to merely regulate instead of to participate. But to what extent are the stricter of its new rules reflective of its own shortcomings as a responsible operator?

Hopefully, market forces – in which I include the willingness to effectively self-regulate – will do their work, so that private operators in the Dutch market will support and implement an industry-wide responsible gaming policy that not only will be exemplary to the rest of the EU, but also will help relieve operators of burdensome and less-than-optimal regulations.

Gaming in Holland
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By Willem van Oort

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