A closer look at the Dutch gambling regulation process.
We have been anticipating this article for a while. Actually, we had been anticipating this article for a long, long time. The Dutch regulation law has been a topic, a prospect and a heated debate for several years. Why? Because the dutch have a long tradition of stigmatizing everything gambling related and more importantly, because it is in their culture to make rules. Lots and lots of rules. But finally, here we are. By the end of the year the Netherlands will ‘open up’ and have a legitimate gambling market as one of the last countries in Europe. But before you get excited and plan to expand your brand, let us first tell you about the small print of the new gambling law called Kansspelen Op Afstand.
In the current situation, it is illegal for brands and operators to promote anything gambling related in the Netherlands. It is however tolerated when Dutch players themselves find and play at brands regulated bij Malta and/or the UK Gambling Commission. An estimated 1,5 million players take advantage of authorities ‘looking away’. Needless to say, this is policy at its worst and the new law is long overdue. However, the law that allows operators to enter the dutch market legally doesn’t solve all problems. In some cases it makes the situation even worse..
The danger of over-regulating
For the players, the law is a major improvement on their rights and protection while playing. Players will also no longer question legality and thus feel more free to spend their money. In comparison to the majority of countries in Europe, the regulation will be perceived by the industry as strict. It is anticipated that the dutch gambling authority (KSA) will hand out around 90 licenses to companies that pass the legislation restrictions of transparency, technical specifications, finances etc. etc. More than anything is the capability to take the responsibility to take care of – and monitor – players. These demands though, will be too much to ask from smaller operators and brands that have no foothold in northern Europe. This raises multiple problems: why would operators go through all these troubles if playing on other brands remains tolerated? What does the increased cost do to the promotion capacity for legalized operators and will this affect players to choose for ‘illegal’ operators that can offer better bonuses due to not having to meet demands? If the KSA has the capacity to prevent players from playing on illegal websites, which remains doubtful, will there be enough diversity for players to choose from in the legal scene?
Why players will not choose the legal path
The aim for the dutch government is to have 80% of the dutch players play on legal sites. Why not aim for 100% you might ask? Probably because the prospected legislation is so suffocating to players that the government expects not every dutch player to be so willing and grateful to play with legalised brands. The reason behind this: data. With every visit (land based or online) to a casino, a player needs to leave their social security number, name, date of birth and address. This data is collected by the authorities to have a clear insight into the gambling behaviour and lurking addiction. Among other things, this data is used for the so-called ‘Cruks’. Of which the C stands for Central and the R for registration. The Cruks is a list with people that are marked as addictive and are therefore no longer welcome in casinos. Not just players can put themselves on this list, so can relatives or operators. There will be a research concerning the behaviour of players based on the data to see if the claim is justified. The data will also be locally stored with the operators, raising questions on the safety of the data.
More regulations and more data
Next to the personal information, operators are obliged to monitor the bets, wins and timeframe of playing sessions. Furthermore it is their duty to assist players in any way possible with any mental issues related to gambling. To require a license, you have to hire a psychologist. The law that started off with the good intentions of providing a safer environment for players six years ago drowned further and further in the swamp of stigmatization and bureaucracy. The final law is therefore also nothing less of a swamp-monster that is frightening players as well as operators. Something far from its original purpose. What other metaphor can we use If you can’t convince 80% of your population to play in a safe and regulated environment and you can’t bring smaller operators to invest in a local market?
Learning from abroad?
The Netherlands are not alone in their struggle to find a balance in regulation. Sweden has gone down the same path of creating a law that is supposed to cover every detail of gambling regulation. The strict regulation is demanding more and more of players and operators: in order to prevent people from playing more during the lockdown, the government has lowered the cap for players even further, resulting according to the Swedish gambling operator association Branschföreningen för Onlinespel (BOS) in ‘seriously harming the market and its licensees by pushing players to unlicensed providers’. For more information on Sweden, we refer you to a series of articles published on igamingbusiness.
The United Kingdom, where gambling was practically invented, has long been an example of fair regulation since 2005 (The Gambling Act). Now a group of MP’s are asking for a revision that will limit players as well as operators. Again the paradox rises of stricter regulation versus a larger illegal market, as the licensees now support 100,000 jobs and pay over £3 billion in tax. Something that stricter regulations will put at risk while potentially not solving the problems in the industry. Legislation history in foreign countries teaches us that an unrelenting bias towards stricter regulation has not solved any of the problems; so why are the Dutch still choosing this route?
Treat gambling for what it is
The current decisions are based on the assumption that gambling is a disease and strict legislation is the cure. What happens when the patient gets sicker? The natural reaction is to increase the doses of the cure. Again and again. This strain of thought turns out to be a devastating one. Like the war on drugs, the problems in the industry have not ceased to exist due to ever stricter policy. We have to come to the conclusion that gambling is no sickness and strict regulation is no cure. Gambling is a market with companies that try to play by the rules and those that do not. Instead of choking the first group with ever stricter regulations, governments should facilitate companies with good products that are fair to players. Luckily for operators looking to apply for a license in the Netherlands, elections are just around the corner. There is a good possibility that, as we say here, the soup is not eaten as hot as it’s served.
Did this article raise more questions than it answered? Feel free to contact us for more detailed information on risk estimations, the behaviour of the average dutch player and an overview of the dutch gambling landscape.