Dutch Senate Passes Remote Gaming Act on Third Attempt

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The Dutch Senate has passed the Remote Gaming Act, which strictly regulates licensed gambling operators.

30-second summary

  • Vote in the Senate was delayed twice this month
  • Remote Gaming Act passed 44 to 31
  • The tax rate will be 29.1%
  • Gambling operators must provide addiction help
  • At least 50 online gambling operators said to be ready to apply for a license

The upper house of the Dutch parliament, the Senate, voted on February 19 to pass the Remote Gaming Act. It was the third attempt this month to bring the measure to a vote. Earlier stalling was down to senators needing further reassurance on a number of measures. The legislation overhauls the Netherlands’ hugely outdated gambling laws.

The bill was first approved by the lower house of the Dutch parliament in 2016. The Senate passed the legislation by 44 in favor and 31 opposed. Now, after a delay of nearly three years, the path is clear for online gambling operators to apply for licenses. The Netherlands has had a problem for many years with unlicensed operators illegally targeting Dutch gamblers.

Justice Minister Sander Dekker, who was responsible for steering the Remote Gaming Act through parliament, expressed relief that the bill was finally passed. He said: “We see that society is digitizing and more than half a million Dutch people are participating unprotected in online gambling at the moment. This involves big risks such as gambling addiction and fraud. I am happy that we can now offer players a secure offer so that games of chance can be played online in a responsible manner.”

What’s in the new law?

The Remote Gaming Act is heavily restrictive, with strict measures place on advertising and gambling addiction. The law sets out six main areas of regulation for online gambling in the Netherlands. The existing regulator, the Dutch Gambling Authority (Kansspelautoriteit, or KSA), will continue to regulate the space.

Any applicant for a license must be based and registered as a company in the EU or a country within the European Economic Area. The KSA has the discretion to license operators from elsewhere if they can satisfy certain conditions.

There will also be a cooling-off period of two years for so-called bad actors who illegally targeted Dutch gamblers before they can apply. In some cases, it could be up to five years.

No date has been set for the law to come into effect, but it seems that gambling operators will perhaps be able to apply for a license ahead of that. The KSA has indicated it will publish guidance for license applicants and the application forms sometime in the summer of 2020, but it could be sooner.

The KSA has been given additional powers to deal with illegal operators. It will be able to block payments between gamblers and unlicensed operators. The power to completely block unlicensed operators’ websites (both IP addresses and domains) is still being examined in the context of existing laws on the internet.

Addiction and advertising

Licensed gambling operators must put strict measures in place to help prevent gambling addiction. Gamblers must be at least 18, must have a registered account on their platform, and must complete a profile that outlines their “comfort level” of risk. Operators must make gamblers aware of the risks, monitor their gambling, and actively intervene if a player shows signs of problem gambling. They are obliged to report such players to the KSA.

The KSA will keep a central register of known problem gamblers – the Central Register Exclusion of Games of Chance (CRUKS). It will have the power to involuntarily exclude them from playing for a period of time. Gambling operators will be penalized if they allow anyone on the register to play on their platform.

Advertising is expected to be heavily restricted or even banned outright. The detail of this is still under consideration; Dekker must put a proposal to the Senate before September 1.

Tax and compliance

The tax rate has been set at 29.1% of gross gaming revenue, one of the highest in Europe. It will apply to all gambling, whether online or land-based.

Licensees will have to demonstrate they meet the terms of the Money Laundering and Terrorist Financing (Prevention) Act, and must also keep full electronic records of both their customers and how they manage the games they offer. They must also appoint a compliance officer.

What next?

The Remote Gaming Act is still technically a decree. It must next be signed by King Willem-Alexander and then it will be signed by Dekker. The final step will be a second royal decree to determine when the new law will come into effect.

In theory, this could be many months but is likely to be much quicker. After the long delays in passing this law, the government will be keen to act quickly and prevent the ongoing problem of unlicensed operators in the Netherlands.

The financial newspaper Financieele Dagblad reported that more than 300 internationally based gambling operators are keen to apply for gambling licenses in the Netherlands. However, it predicted that the real number was more likely to be slightly over 50 companies.