Holland proposes online gambling legalization

In November of 2012, Reuters news source had reported that the Netherlands will be selling its state owned casinos and plan the legalization of online betting. “It is unclear at this stage if it will be a sale or an initial public offering. The government hasn't decided how the sale will take place," Justin Franssen, a lawyer at VMW Tax commented to Reuters at the time.

Currently, foreign firms are not supposed to target gamblers in the Netherlands, although the ban is widely ignored. The flouting of the ban has also had an impact on Holland Casino, the state-run gambling company which is currently loss-making.  

Holland Casino has 14 venues in the country's larger cities and tourist spots, including Amsterdam and Rotterdam and has been losing tourist traffic for a few years now. These venues attract approximately a million visitors a year and earn 3.8 million euro from more than half a billion euro in garnered revenue.

Offshore gambling operators are taking advantage of the lack of control over offerings to punters in Holland. The government says it will be offering licenses to operators for online poker, sports betting and casino style games such as slots and blackjack. The breaking up of the monopoly Holland Casino will keep Holland on the right side of the European Commission guidelines for fair e-commerce. A statement from the Junior Justice Minister Fred Teeven indicated that strict requirements are included in the law, in order to prevent players from gambling addiction, so that the consumer is protected from possible fraud and crime.

The strict guidelines lean towards prevention of problem gambling says the minister. The starting point of addiction prevention policies is that the player gets enough information and tools to make them aware of the risks of gambling addiction, giving them insight into his play behavior and, if necessary, to force them to moderate play behavior. The draft proposals also state the license holders will have to contribute to a special monetary fund to help gambling addicts. In addition, there will be a national register of players who continue to break self-imposed limits and banning them from playing at all.

Tax

The proceeds of online gambling will also be subject to a lower tax rate of 20%, compared with the 29% Holland Casino and arcade owners have to pay. The lower tax rate is to ensure new entrants are encouraged to set up in the Netherlands.

The coalition agreement signed by the VVD and PvdA included the liberalisation of the online gambling sector. The current laws date back 50 years, before the advent of internet.

The draft proposals also state the licence holders will have to contribute to a special fund to help gambling addicts. In addition, there will be a national register of players who break self-imposed limits and will be banned from playing. The draft legislation has now been put out to consultation for two months, before it is formally sent to parliament.