Dutch online market to open in January 2021… but not for everybody By Willem van Oort, founder, Gaming in Spain and Gaming in Holland October 24, 2019 at 2:45 am After a long and arduous political process, the regulated Dutch online market is now set to open on January 1, 2021. There is, however, a catch. After a lengthy and torturous political process of almost ten years, the Dutch Remote Gaming Act was finally adopted by the country’s Senate in February of this year, having passed the Lower House in July 2016. The act will come into force on July 1, 2020, with the opening of the regulated online market scheduled for January 1, 2021. But not every operator will be immediately welcome. The current situationAt present, roughly one million players spend around €500m annually in a completely unregulated environment. Earlier this year, the local regulator, the Netherlands Gambling Authority, announced that it had received 183 expressions of interest from various parties who are seriously considering applying for a remote gaming license once the market opens. The regulator expects that between 80 and 100 operators will be able to meet its licensing criteria.A cooling-off period for “cowboy” operators In order to accommodate the wishes of the Dutch Senate, the Ministry of Justice and Security ordered the Netherlands Gambling Authority to draw up a policy rule that would allow the regulator to exclude so-called “cowboy” (that is, unlicensed) operators from immediately obtaining a license once the regulated market opens. According to the published policy rule, those online operators who “actively” targeted the Dutch market in the past will be subject to a two-year cooling-off period before they will be eligible to apply for a remote license. Online operators who continued to actively target the Dutch after July 1, 2019 will not be eligible for a remote license under any condition. An operator is deemed to actively target the Dutch market if said operator: offers its services through a website with a .nl extension offers its services in the Dutch language (either before or after the user logs on) offers typically Dutch payment methods (specifically: iDEAL) advertises in print media or during broadcasts aimed at the Dutch market offers its services through a website with a domain name that combines typically Dutch elements with gambling-related terms (e.g. “Windmill Casino”) offers its services through a website containing expressions, symbols, or images that demonstrate a focus on the Dutch market A narrow licensing timeline The Netherlands Gambling Authority has stated that it will need around six months to properly process remote license applications. This means that in order to be fully licensed once the market opens, operators must submit their license application on or near July 1, 2020, that is, as soon as the Remote Gaming Act comes into force. This also means that operators who have been found to actively target the Dutch market after July 1, 2018 will not be able to be licensed in time for the projected market opening date. Most major operators have been fined In recent years, the Netherlands Gambling Authority has fined most of the larger internationally-licensed online operators, including LeoVegas (for illegal activities in the period from August 2018 to January 2019), PokerStars (July 2018 – January 2019), bwin (August 2018 – January 2019), Kindred (August 2018 – December 2018), William Hill (February 2018 – May 2018), MRG (July 2017 – November 2017); and Betsson (May 2017 – August 2017). Undoubtedly, the Netherlands Gambling Authority will have continued to monitor the activities of the operators who have been fined for activities that took place before July 1, 2018. Even those may not be necessarily in the clear regarding their immediate eligibility for a remote license. It should also be noted that other fines could still be in the pipeline. A two-phased market? As a result of the regulator’s enforcement efforts, it now seems likely that a two-phased market will develop. Local incumbents (Holland Casino, lotteries, and other land-based operators), as well as international operators who did not (or did not, recently) target the Dutch online market will be able to enter the regulated online market as soon as it opens for business. Others, including several major providers, will have to wait at least several months longer, entering in a second phase. Other observations In the Netherlands, even more so than in many other European countries, there are strong concerns regarding responsible gaming and the need to exclude minors from gambling. Applicable regulations will place a heavy compliance burden on licensed operators. For instance, remote operators will be required to maintain meaningful physical representation in the Netherlands. An industry-wide (self-)exclusion register (CRUKS) will also place a significant regulatory burden on the land-based casino sector. It remains to be seen whether the Netherlands Gambling Authority will be able to prevent advertising mishaps, as occurred in Sweden. This task will be made harder by the two-phased nature of the online market, with several major operators (initially) looking in from the outside. With a high tax burden of 29% of GGR, it also remains to be seen how sustainable a smallish market can be if it has around 90 operators. With that number, consolidation and market withdrawals after one or two years appear all but inevitable.