Netherlands’ online gambling industry currently is at the initial formation stages. Licensing Gaming specialists informed our publication about the international gambling operators’ work, legal requirements and licensing features.
Online gambling industry is currently at the initial formation stage despite the land gambling business in the Netherlands has been operating on a legal basis for a long time. We talked with the Licensing Gaming experts in the gambling operators licensing field and found out the business prospects and risks in the «young» for the international operators.
Any successful business starts with a clear understanding of the market operation rules, set by legislative regulation. The current rule is especially important in relation to the gambling business.
Netherlands gambling business’ legislative features
Loyalty to various entertainment types, which are often prohibited in other countries, is a distinctive Holland’s feature. Despite this, gambling did not belong to the acceptable ones by the jurisdiction for a long time.
«On bets and games» regulatory norm adoption in 1964 contributed to gambling-related legislation emergence. The country’s gambling business was controlled by certain regulations until 2017, including: «Chance game decree», adopted in 1997, «Slot machines degree», adopted in 2000, «Gambling ordinance: advertising, addiction and new players attraction», adopted in 2013. A regulatory legal act on the lottery market licensing was adopted in 2016.
Online gambling industry legalization law, developed in 2016, was adopted in 2017. The following online gambling activities are allowed in the country, according to the current legislation:
- Bookmaking and betting;
- Poker, card and table casino games;
- Bingo and lottery;
Netherlands Gambling Authority (Kansspelautoriteit, or KSA), while being country’s gambling regulator, is going to perform a legislative revision on remote gambling. The innovations will be adopted on July 1, 2020. From this date the operators are entitled to apply for licensing rights, which will be issued before January 1, 2021 if meeting all the requirements, according to the Licensing Gaming expert. Thus, the actual new format market existence will be started in 2021.
The country gambling regulator’s representatives warned the market launch plan timing may be postponed due to the need to adopt secondary legislation.
The secondary legislation is the General Administrative Order and the Ministerial Order.
The Ministry of Security and Justice is responsible for the bills development.
Licensing terms for gambling operators
Netherlands is one of the relatively new centers on the world’s gambling map. This is due to many national and international gambling operators work features.
Country’s gambling regulator is responsible for the licenses issuance. Holland Casino, licensed in 1996, became the first Netherlands operator. The company owned a monopoly on the land gambling services provision until 2016. The legislation, adopted in 2017, implies the operators licensing for five years. The representation presence in the EU is a prerequisite for obtaining a permit.
Licensing Gaming experts explain that Dutch license cost varies depending on the prize payments size in the range from €500 to €45 thousand. The permit prize price is €226, from €45 thousand to €450 thousand – €907, from €450 thousand to €4.5 million – €1588, over €4, 5 million – €2668.
Slots are one of the most attractive Netherlands’ gambling business segments. Firstly, the country’s legislation does not impose restrictions on the permits issued. Secondly, gambling machines can be placed both in especially equipped halls as well as in cafes or restaurants with the provided that the company undertakes to ensure the minors safety and prevention from playing. Thirdly, the license can be acquired for an unlimited or advance period.
The country will apply additional criteria for online licensees. First, the new operators are obliged to become Unified Centralized Self-Exclusion System and the Control Database members. The control database is a directory, which demonstrates all gaming services types, provided by the operator. The system will be open for the regulator in order to provide him with a chance to perform the monitoring functions. Secondly, the remote gambling rules must comply with the responsible gambling principles. Third, the licensees undertake to comply with the financial terms, namely with the following payments types: gambling operations tax; deposit to the gambling addiction prevention fund; license fee of €45 thousand.
The licensees are obliged to provide financial guarantees of solvency, to have the funds to buy and install high-quality software, as well as the ability to adapt to legal requirements, in addition to the terms mentioned above.
“All the criteria mentioned above can be adjusted due to the fact the secondary legislation development is currently being implemented. Another feature is that Netherlands’ gambling regulator intends to license only those operators, striving to become the country’s future market part. This is reflected in maintaining feedback with KSA. The gambling regulator has developed a system, which allows to fill out a feedback form on the organization’s official website and thus declare the company’s intention to become the gambling market’s part”, – according to Licensing Gaming representative.
An opportunity for foreign companies to become the gambling market part in the Netherlands?
LG representative told us that an international company is entitled to join Dutch gambling market and become the land gambling institution operator, only if having own representative office in the EU.
“Online segment operator must meet all the requirements and mandatory terms, including to show a focused interest in the market at the moment, without given the fact that the country’s legislation is currently being developed”, – according to Licensing Gaming company’s expert.
Licensing Gaming experts, engaged in getting permits for the right to provide gambling services, believe that international gambling companies may be interested in gambling machines segment due to the benefits described above. Besides they note, that participation in Holland market formation and initial development stage may provide certain benefits, namely transparency and clarity of business rules, commitment to the responsible gaming principles, as well as a favorable competitive environment.