NETHERLANDS

Mark van Weeren Lawyer

markvanweeren@blenheim.nl
Tim Pruntel LL.M Legal Assistant
Blenheim Advocaten, Amsterdam

KSA fines Bet-at-home for

providing online gambling
services in the Netherlands
The Dutch Gambling Authority (‘KSA’) imposed separate administrative fines of €210,000 and
€200,000 against two Maltese subsidiaries of the German online betting provider Bet-at-home.
com. The fine was a consequence of the violation of the existing Gambling Act 1964 (‘the Act’)
as the company’s platform was offering games of chance online without a valid permit, through
a website accessible in the Netherlands for Dutch consumers. Mark van Weeren and Tim
Pruntel of Blenheim Advocaten provide an overview of the KSA’s regulation of online games
in the Netherlands and analyse the its decision to impose a fine against Bet-at-home.

Introduction gambling is not regulated. There is to impose an administrative fine for

The online operation of games
of chance is prohibited in the
Netherlands. The Netherlands is one
of the few countries in Europe that
has not yet provided regulations to
legalise online games of chance.
The KSA has been pursuing an active
enforcement policy for the prevention
of unregulated online games of chance
for many years. According to the KSA,
financial gain can be achieved without
much effort and therefore the market
is extra sensitive to fraud, deception
and addiction. Gambling addiction or
unlawful participation in games of chance
can lead to financial difficulties for the
player and can substantially affect their
personal life, according to the KSA.
As online games of chance are still
unregulated, there is no guarantee that
revenues are paid to charitable targets,
so-called loss limits and minimum
payment percentages and, moreover,
no levies and taxes are paid. The
position of participants in unregulated
therefore, according to Dutch policy, no
safeguard whatsoever for the participant
that the online game is played in a
hasty manner, if the payment traffic is
safe, personal data is treated correctly,
and any prizes won are paid out.
The current Act does not offer online
opportunities for online games
of chance to fulfill the three main
objectives of Dutch gaming policy: i)
the prevention of gambling addiction,
ii) consumer protection and iii) the
prevention of fraud and crime. For
the aforementioned reasons, the
Government decided, six years ago,
to modernise the gaming policy. The
draft Bill on Remote Gambling allows
online gaming under certain conditions,
is now up for approval by the Senate.
Legal basis for the fine
The Board of Directors of the KSA (‘the
Board’) has the right to the administrative
enforcement of the Act in accordance
with Section 33b. Pursuant to Article
35a of the Act, the Board is authorised
infringement of, among others, Article
1 of the Act. The maximum fine that can
be imposed is €830,000 or, if the value
exceeds this, 10% of the company’s
turnover in the financial year prior to the
decision. To determine the amount of the
fine, the KSA has established a penalty
policy rule, Bidding guidelines for online
gambling without a license (‘the Rule’).
Fundamentally, this Rule concerns
imposition of a fine for infringement
of Article 1 of the Act, granting a
discretionary power to the KSA.
When exercising this power, the KSA
must, pursuant to Section 5:46(2) of
the General Administrative Law Act
1994, adjust the level of the fine to the
seriousness of the violation and the
extent to which it can be blamed for the
offence. In doing so, all circumstances
must be taken into account in which
the violation was committed.
Priority policy
According to established Dutch
case law from the Administrative

A Cecile Park Media Publication | September 2018 13

 The Board notes that Bet-at-home had argued that there is a special position
of Bet-at-home on the grounds of previous correspondence, participation in
a roundtable discussion and an interest report in the context of the KSA.
Image: Muhammad Owais Khan / Moment / Getty Images

14 ONLINE GAMBLING LAWYER

continued
Jurisdiction Division of the Council
of State (the highest administrative
judge of the Netherlands), if a regulator
applies a certain enforcement or
prioritisation policy, the supervisor
must comply with this policy in line
with the principle of equality.
In doing so, the KSA initially focuses
on companies that (partly) target the
Dutch market and Dutch consumers
actively. In view of the limited capacity
of the KSA, a prioritisation policy has
been drawn up, which stipulates that
the initial action to be taken, is against
providers that meet one or more of
the following prioritisation criteria:
• the website on which the game of
chance is played ends on .nl;
• the website can be consulted
in the Dutch language; and
• advertising is done via radio,
television or in printed media
aimed at the Dutch market.
A large number of (international)
providers of games of chance online,
including Bet-at-home, have been
informed about the prioritisation policy
of the KSA. The KSA has subsequently
advised providers of online games of
chance that are not in possession of a
license, to take care of an IP country
blockade or another measure as a result
of which the offer is no longer accessible
to the Dutch market. Only in this way can
enforcement measures be prevented.
Reason for the investigation
Between July 2017 and October 2017,
Bet-at-home was conducting a service
in which games of chance were made
available online to Dutch consumers.
The KSA, who had previously highlighted
to Bet-at-home both in 2012 and 2014,
their enforcement policy regarding the
provision of games of chance online, had
warned the provider that it would keep an
eye on the recruitment and advertising
activities of their online platforms.
Following several tips from sources
relating to Bet-at-home in May 2017, the
KSA ordered a further investigation. This
revealed, among other things, that the
company’s website, on which games
A Cecile Park Media Publication | September 2018
of chance were offered online (poker,
casino games and slot machines), was
accessible in the Netherlands from a
Dutch IP address and iDeal (the Dutch
standard for the performance of internet
payments) as a means of payment. In
addition, the Dutch flag was shown
on the ‘top winners’ scoreboard and
the Netherlands could be selected as
a country in the drop-down menu at
registration. An official of the KSA could
easily create account on the website on
an address in the Netherlands. In view
of the findings made, the KSA concluded
that Bet-at-home has given the Dutch
public the opportunity to participate
in online games of chance. According
to the law, Bet-at-home was invited to
give their views on administrative fine
they were facing, during a hearing.
Considerations
During the hearing, Bet-at-home
and the KSA submitted several
arguments, some of which are
addressed in more detail below.
No license granted in the Netherlands
According to the KSA, the absence
of a Dutch license cannot, contrary to
Bet-at-home’s stance, be compensated
by a permit elsewhere or by regulations
from European directives. The fact
that Bet-at-home has a permit in
Malta is irrelevant, according to the
KSA. Further, it is also irrelevant to
consider in these circumstances which
supervision Bet-at-home in Malta is
possibly subject. In the present case,
the activities of Bet-at-home are on the
Dutch market and the KSA is exclusively
competent, not the authority of Malta.
In its judgment of 24 February 2012, the
Dutch Supreme Court considered the
following. From the Court of Justice of
the European Union’s (‘CJEU’) reply to
the question referred by the Supreme
Court, it appears that a Member State
may take the view that the mere fact
that an economic operator legally
offers games of chance via the internet
in another Member State, does not
sufficiently ensure that the national
consumer is protected from the risk
of fraud, crime and addiction.
There is no European or other
harmonisation of rules for games of
chance. Providers of online games
of chance will be aware of this and
undoubtedly investigate in which
country they may or may not offer
online games of chance according to
the respective jurisdiction’s rules.
Compliance with EU law
Bet-at-home argued that the Act and
Dutch gaming policy is not consistent and
is in conflict with EU law. The argument
that the prohibition in Article 1 of the Act
and the policy based on it, constitutes
an unjustified infringement of European
law, was not unsuccessful. In its ruling
of 22 February 2017, the Administrative
Law Division of the Council of State (‘the
Division’) determined that, with reference
to the CJEU decision in Case C-94/14,
this prohibition aims to prevent gambling
addiction and combat crime. These
objectives are pursued as overriding
reasons in the general public interest, on
the basis of which restrictions on the free
movement of services may be justified. The
Division ruled that it cannot be held that the
KSA policy is incoherent and not systematic
and that the existing restrictions, which
emerge due to the application of the
ban on the online provision of games
of chance, are not disproportionate.
Article 1 of the Act is therefore not in
conflict with the provisions of EU law.
Special position for Bet-at-home?
The Board notes that Bet-at-home had
argued that there is a special position
of Bet-at-home on the grounds of
previous correspondence, participation
in a roundtable discussion and an
interest report in the context of the KSA.
The response was that a letter in the
framework of the prioritisation policy,
participation in thematic meetings nor
an interest report, leads or can lead,
to a special position in which one is
free from enforcement action, or has a
right to a special approach in case of
violation or prioritising enforcement.
The KSA therefore decided to impose a
fine against the online game provider.
Bet-at-Home can appeal against the
KSA decision within six weeks.
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