Netherlands Gambling Regulation

Situated in the northwestern part of the Old Continent, the Netherlands is a constitutional monarchy whose name translates as “a low-lying country.” Known for its windmills, trademark wooden shoes, vast tulip bulb fields, and masters of painting, the country is home to a population of over 17 million people. It has a well-developed market economy, heavily driven by foreign trade. The island countries Sint Maarten, Aruba, and Curacao are also part of the monarchy.

The Netherlands is among the six countries that formally established the European Union in 1993, alongside France, Germany, Belgium, Luxembourg, and Italy. The country has a strictly regulated but heavily monopolized land-based gambling industry that comprises 14 gambling halls, all of which are operated by the state-owned company Holland Casino.

Holland Casino has branches in some of the largest cities in the Netherlands, including Amsterdam, Rotterdam, Leeuwarden, Breda, and Utrecht. Part of the gambling revenue goes directly toward the national treasury. The overall turnover of the Dutch gambling market is estimated at €2 billion, with one-fourth of this amount going toward various charities. The state treasury pockets roughly €500 million from the sector’s total turnover.

The Netherlands has yet to see a thriving, open, and regulated online gambling market. Gambling over the Internet remains prohibited in the Netherlands for the time being, although Dutch players are not prosecuted by the government for placing wagers on offshore casino sites.

With that said, there is a silver lining thanks to the passage of the Draft Bill on Remote Gambling in February 2019. This piece of legislation will allow for the issuing of licenses to private online gambling operators. It will also pave the way for adequate regulations of the interactive sector of the local gambling industry.

Laws Governing the Landbased Gambling Sector in the Netherlands

Land-based gambling is legal and well regulated in the Netherlands under the provisions of the Betting and Gaming Act of 1964. However, the entire land-based gaming sector operates under a state monopoly held by a single licensee, the government-owned Holland Casino.

State Monopoly

The 1964 Dutch Betting and Gaming Act (BGA)

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State Monopoly

The regulatory framework governing the brick-and-mortar gambling sector is fairly straightforward, largely because of the state monopoly. The country’s sole legal operator opened its first casino in Zandvoort in the mid-1970s. Holland Casino now operates 14 gaming halls nationwide, the largest of which are in Rotterdam and Amsterdam.

Holland Casino venues offer a broad selection of games, although the exact lineup varies by location. Some of the most popular options include various versions of poker, blackjack, bingo, roulette, and punto banco. Slot machines, lotteries, and jackpot games are also widely available throughout the Netherlands.

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The 1964 Dutch Betting and Gaming Act (BGA)

All forms of legal gambling in the Netherlands are regulated by the Betting and Gaming Act of 1964, known in Dutch as Wet op de kansspelen. The Act has been amended several times over the past fifty years. The BGA has three primary objectives, the first of which is that it prohibits the provision of unlicensed games of chance on Dutch soil.

Article 1 of this legislation also provides a legal definition of games of chance. It forbids intentional participation in these games as well as their promotion. According to the BGA, games of chance are those that enable participants to win prizes or premiums without being able to predict or influence the outcomes in any way.

The meaning of prizes and premiums is rather broad and is not set out directly in the BGA. Instead, it appears in another piece of Dutch legislation, the Betting and Gaming Tax Act of 1961 (BGTA), or Wet op de kansspelbelasting in Dutch.

Article 3 of the BGTA states that prizes and premiums include “all goods to which economic value can be attached, which accrue to the participants in the games of chance by virtue of their participation”.

The local gambling regulator, the Netherlands Gambling Authority (NGA), decides which games fall into the category of chance and which do not. To do so, the Authority relies on its own Guide on Assessing Games of Chance, or Leidraad beoordeling kansspelen.

Dutch players also bear responsibility when they participate in unauthorized games of chance. Legal measures are taken only against individuals who knowingly engage in such activities. The violators face fines of up to €8,200, and the offense is added to their criminal record, which can hinder future employment prospects.

Dutch gambling law does not clearly distinguish between pure games of chance and games in which skill influences the outcome. Poker is a prime example because it blends chance and skill. An element of chance is still involved in poker because players cannot predict with certainty which cards will be dealt.

However, players’ dexterity and knowledge of the game also affect the outcome of a hand. With gambling, it can be difficult to determine where chance ends and skill begins. This is why the Dutch Supreme Court stepped in about twenty years ago to address the issue.

During an appeal hearing, the court reviewed various pieces of evidence, including the fact that the same players had repeatedly won the World Series of Poker over the years. Although these victories were achieved through practice, the court still classified poker as a game of chance.

Licensing Procedure

Only land-based operators can apply for and receive valid licenses in the Netherlands, at least for the time being. The licensing requirements and procedures for casino gaming permits are outlined in Article 27 of the Betting and Gaming Act of 1964. Each operator is entitled to no more than one casino gaming license. Those who violate the licensing conditions risk having their permits revoked.

As for slots, there are presently no restrictions on the number of machines each licensed gambling firm can offer on its premises. Article 30 of the BGA makes a distinction between two categories of gaming devices, skill and gaming machines. A skill machine is one where the outcomes can be influenced by the players’ dexterity. All other devices that do not fall into the skill category are considered gaming machines.

It is disallowed to operate slot machines in proximity to public roads and places unless the operator is granted an exclusive permit by the respective municipality’s mayor. However, a license from the Netherlands Gambling Authority is also required for this purpose. Certain conditions regarding the gameplay duration, the exclusion of underage individuals, and the maximum amounts that can be won or lost must be met.

As for poker, it is licensed and commercially available but its provision is restricted solely to Holland Casino. Of course, this will change when the new gambling bill comes into force in 2021. Sports betting licenses are distributed under the provisions of Article 16 of the BGA.

Again, each entity or legal person can receive only one sports betting license. Most of the revenue the betting operators generate goes toward Dutch sports, public health, and culture. A separate license is granted for horse race wagering under the provisions of Article 23 of the BGA.

The licenses for the provision of lotteries have indefinite validity, with the government collecting the proceeds generated by state-run lottery games. The license conditions require lottery operators to return a minimum of 60% of all stakes to their customers.

All these permits have indefinite validity and are revoked only upon violation of the licensing conditions. As for taxes, these are product-specific, but most games are taxed at a 30.1% rate. Once the Remote Gambling Act officially comes into force in 2021, the approved applicants for virtual gaming permits will be taxed at a 29% rate.

As for the licensing procedure for online gambling operators under the soon-to-be-enforced Remote Gambling Act, there will be no restrictions on the maximum number of licenses granted. Each permit will be valid for up to five years.

Separate licenses will be issued for sports betting and online casino games. The applicants for online gambling permits will be required to have registered offices either in the Netherlands or in a member state of the European Union or the European Economic Area. They will have to contribute a processing fee of €45,000 upon submitting their applications.

Betting Limits Requirements

There are also requirements on the minimum and maximum bets players can make on licensed casino games. The gambling halls operated by the state-owned Holland Casino can offer bets that range from €5 to €10,000. However, a separate condition in Article 4 of the BGA stipulates there should be at least one game with bets under €5 plus another one with wagers that must not exceed €2.

Separate bet restrictions are in place for slot machines across the Holland Casino gambling halls. The maximum permitted stake that slot players can make is set at €50. Slots are the fastest-paced games on the entire casino floor. This is why the Dutch regulators require a minimum of three seconds to pass between individual spins. Each slot player can wager no more than €150 during any single gaming session. The minimum return-to-player percentage should be no less than 80%.

Legal Gambling Age and Protection of Vulnerable Players

From what we have written so far, it is quite obvious that the Dutch gambling regulator strives to ensure a safe and fair gaming environment for all local gamblers. It makes sense that the law prohibits offering any gambling services to minors. Article 2 (e) of the Games of Chance Decree, or Kansspel Besluit, clearly states that “persons who have not yet reached the age of eighteen” cannot be admitted to gambling premises.

Licensees of the Netherlands Gambling Authority must take all the necessary precautions to prevent problem gambling. The Dutch regulator outlines the measures in its Guidance Duty of Care, or Leidraad Zorgplicht in the native language.

While patrons are themselves responsible for their actions, licensed gambling operators also have obligations that aim to prevent addiction and its associated social harms. This is particularly important in the case of gaming machines, which are highly addictive and can be difficult to stop playing. The option to self-exclude is made available to Dutch players as well.

As for the rules on advertising, these are outlined in Article 4 of the Betting and Gaming Act, which states the following: “The holders of permits […] shall conduct recruitment and advertising activities in a careful and balanced manner, in particular guarding against undue participation.”

In other words, gambling advertisements should not be designed in a way that attracts minors. Attention should be drawn to the risks associated with playing chance games. The statistical probability of winning should be clearly indicated. Advertising gambling products on television is prohibited between 6:00 am and 7:00 pm. Debts resulting from gambling participation are not enforceable in the Netherlands.

Gambling Regulators in the Netherlands

The casino gaming sector in the country falls under the regulatory scope of the Netherlands Gambling Authority (NGA), or Kansspelautoriteit. The regulatory authority was established in the spring of 2012. This independent body’s mandate is to supervise and regulate chance games in the Kingdom of the Netherlands.

The regulator’s operations are governed by a Board of Directors and comprise six separate departments: facility management, regulation enforcement, supervision and operations, supervision and consumers, communications, and legal affairs. Apart from regulation, the Authority also handles the prevention of problem gambling and customer protection.

The NGA’s official website contains information about all authorized gambling operators in the country. It also includes data about gambling addictions. According to the website, a 2011 report estimated that the number of gambling addictions in the country ranges from 20,000 to 59,000. Roughly 92,000 people are at risk of developing an addiction.

In addition, the NGA keeps a close watch on remote operators that illegally target Dutch players. The regulator imposes hefty fines on those caught in violation of local gambling laws. Once the Remote Gaming Act (RGA) is enforced, the NGA will be granted additional powers.

It will be able to instruct payment service providers to stop processing deposits and withdrawals to unlicensed gambling websites. The enforcement of the RGA will also enable the regulator to compel mobile application platforms to restrict Dutch residents’ access to unauthorized gambling-related app content.

Once the RGA comes into effect, the regulatory body will publish a list of the approved operators on its official website. Local players can check it to ensure they are gambling on authorized websites. Of course, licensed operators will also have to make a clear reference to their license status on their own websites, most likely by displaying the logo of the Dutch gambling regulator.

Foreign-issued licenses hold no weight in the Kingdom of the Netherlands. In this vein, it is worth mentioning that some Curacao-licensed operators tend to accept customers from the Netherlands.

However, a license issued in Curacao is not valid here despite the fact the island country is part of the Kingdom of the Netherlands, along with Aruba, Bonaire, Saba, Sint Eustatius, and Sint Maarten. Each of these has its own gaming market with separate regulations, so the NGA has no regulatory and supervisory jurisdiction in the country’s Caribbean parts.

Conclusion

The Netherlands is home to one of the most stringent and restrictive gambling markets globally. This is largely due to the monopoly the state holds over the entire gaming sector. Nonetheless, this situation is soon to change thanks to the introduction of the 2019 Remote Gaming Act.

Once enforced in 2021, this piece of legislation will enable private entities to apply for and obtain valid licenses for online gambling. Dutch gamblers will then have a broader choice of safe, fair, and regulated remote casino operators.