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Stricter Enforcement Policy Pressures iGaming Operators to Consider Leaving the Dutch Market

Netherlands Gaming Authority Kansspelautoriteit introduced new rules, aiming to curb its iGaming market, that pushed most of the online casino operators to part their ways with the Dutch market due to the much stricter limitations, imposed on them.

The Dutch gambling regulatory body decided to issue stricter rules, which govern the online gambling sector. It was reported that the government will not tolerate any violation of the recently-introduced rules, but even the opposite – it will impose severe sanctions on the lawbreakers. Thus, many online casino operators failed to meet the new requirements, that came into effect on 1st June.

The rules came out of the blue for the online gambling operators, who had no time to react. Up to now, the Netherlands Gaming Authority prohibited any online gaming websites, that utilize the .nl domain extension, offer services in Dutch language or use any type of commercials. Under the latest changes, more limitations are added to the old regulations. These outlaw also online gambling websites, that benefit from promotional websites with an .nl extension and re-directs the users to .com websites, make use of typical Dutch names or elements or offer Dutch ways of payment. The stricter enforcement criteria also target websites with .nl extension, that did not block access for Dutch players.

The members of the Dutch trade association of online operators could not hide their frustration by the new rules, explaining that the decision was taken unexpectedly and it is not even put on the table for discussion. They shared concerns that the Dutch players will advance the black iGaming market, which will be a hardly reversible process, after the market re-opens its doors.

Online gaming activities remained unregulated on the Dutch market for a long time, which led to the leakage of loads of money. Being part of the grey economy, online casino operators were neither taxed, nor monitored by any form of jurisdiction or government body. Thus, the country was viewed as a lucrative market for the casino operators, who could operate unconcerned by any taxes or regulations. The introduction of the strict measures, though, put an end to that “era”.

Thus, many casino operators came to a decision to leave the Dutch gaming market. But some of them explained that the moment the government manages to find its feet and establish a clear package of laws and regulations, they will apply for a license to operate. Up to now, all the iGaming casino operators, licensed by Gibraltar and Malta, are forced to leave the market, in order to remain compliant with the new regulations.

The formerly enticing gaming market may lose its charm after being regulated. These measures were discussed for a long time and an iGaming bill appeared under the spotlight. It outlines that the casino operators should pay 29% tax on gross gaming revenue (GGR). Compared to other European countries, this is a very high percentage, being even equal to the tax, that the country’s land-based casinos need to pay.

In fact, only a couple of years ago, the neighbouring Denmark also faced a dilemma, when it comes to the gambling regulations. Prior to the liberalization of the gambling industry, the market was governed by the well-known Danske Spil’s monopoly, which dominated the market and derailed many other casino operators, making sure to reduce the competition level.

Thus, many punters were attracted by the possibility to join the black market. This, on the other hand, called for the need of an urgent solution. Danish authorities realized that the Danske Spil’s monopoly is no more able to meet the needs of the growing modernization and thus, they liberalized their gambling market.

Based on financial reports, it seems that this was the right decision for Denmark, since the country witnessed a considerable growth in tax revenue. Furthermore, by regulating the market, the country managed to establish fair and responsible gaming conditions, which protect the players’ interests. Currently, many casino operators are back on the Danish gambling market, licensed and taxed under a particular legal framework. Now Holland is facing the same decision, but it is yet to become clear if it will adopt the same footsteps.

Up to now, the proposed bill passed the House, but the Senate failed to agree on a solution. Thus, the iGaming operators remain “persona non grata” under the new regime, operating the Dutch market. But it is yet to become clear if the sudden “slam” on the brake will have a detrimental effect on the thriving casino industry.

By surprisingly enforcing the new draconian measures, the Dutch authorities are aiming to “plumb” the leakage of money until the country does not introduce an exact legal framework, which will keep a tight rein on the gambling industry within the country.

 Author: Benjamin Barry

Benjamin Barry‘s career is worth observing, since he is not only a competent writer, but he has also practical experience at poker tables.