15 November 2023

Foreign gambling providers are target of Dutch Gambling Authority KSA

Category: Enforcement, gambling law

Foreign gambling providers that do not comply with the Dutch rules and do not have a KSA license can be subject to a sanction from the Gaming Authority (KSA) . A sanction decision is usually made public on the website of KSA and it’s social media. This also applies to foreign gaming providers that allow Dutch customers on their websites. In the meantime, several foreign gambling providers have received heavy fines as well as orders under penalty. The pattern we see is that first an order under penalty is imposed by KSA and some time later the violation is punished again with a substantial administrative fine from KSA. is the policy of the Dutch Gaming Authority towards out-of-country providers of online gambling?

Dutch gambling supervisor is tracking foreign gambling providers

The Kansspelautoriteit (KSA) is the regulator of the Dutch gambling industry. It’s tasks are set out in the Betting and Gaming Act (Wet op de Kansspelen). KSA strives to create a proper world where gambling services are reliable, operators are transparent and players are protected. A world where the games are fair and the chances of winning are clear, and where there are no gambling addicts or illegal practices. KSA’s first statutory duty is to regulate the Dutch gambling market by issuing licences to gambling operators, including foreign operators that wish to enter de Dutch gambling market. Supervision and enforcement of Dutch gambling law is also a statutory duty of the KSA. Last year KSA had commenced to give serious fines to foreign gambling operators of up to EUR 12 mio.

The reason for penalties against foreign gambling operators on the Dutch market

If a gaming provider is not licensed by the KSA, it is not allowed to offer games of chance in the Netherlands. If it does, the KSA can impose a penalty and/or fines that can be high. The Kansspelautoriteit Ksa selects gambling websites that will be scrutinized. If it is possible to participate in a game of chance from the Netherlands on those websites, sanctions will follow from the gaming authority. P romoters of those games of chance, such as payment service providers and advertisers, may also be targeted. The reason for the new policy is that since Oct. 1, 2021, the amended Gaming Act has made it possible to offer games of chance legally via the Internet with a license. Foreign gaming providers can also apply for the Dutch gambling licence. Blenheim is happy to assist you with that application procedure.

Penalties of Dutch authority KSA against illegal online operators

The KSA has fined several illegal providers who allow Dutch players do use their website. On March 3, 2023  the KSA publicly announced and published 5 fines for the total amount of EUR 26 mio. Several Maltese providers received the fine. Companies that have received a fine or other sanction can object against the penalties in a complaints procedure and subsequently they can take the case to the Dutch administrative court. We have already assisted gambling providers to fille complaints. Also because they believe KSA’s mystery shopper  has gained unauthorized access to the websites. The enforcement by the Dutch gambling supervisor has not slowed down. Several other foreign gambling operators have received fines for allowing  Dutch citizens to gamble on their website.

How does KSA collect evidence of illegal online gambling?

The KSA will verify if the website is accessible from a Dutch IP address and that it was possible to create an account and participate in games of chance from the website from the Netherlands. Usually the KSA uses data from Similar Web and states that the website is (frequently) visited from the Netherlands. An inspector of KSA will open an account on the foreign remote gambling website, or at least try to do so. When creating an account on the website under investigation, a Dutch bank account and for example Mastercard will be used. If he succeeds in doing so from his desk in the KSDA office then a Dutch person has gained access to the website. Then he will try to deposit a small amount of money and probably try the to a game or gamble with his budget. He will make a record of all his steps take on the website which will be part of the evidence used in a decision to construct a sanction. The KSA officer may also try and do so through a VPN connection. The general terms and conditions of the website can also be checked and it is checked whether participation from the Netherlands is explicitly prohibited or excluded in these terms and conditions.Other tricks to get access to the gambling website may not be excluded. Therefor an provider that has the KSA as a visitor should monitor and register in detail what the person has done on the website in order to obtain access. This may be important once the matter in judged in court. Evidence that has been gathered illegally by the Dutch KSA officer is not admissible and may lead to a mistrial  of the administrative procedure.

What is the procedure of the Dutch Gambling Authority KSA when imposing a fine?

An enforcement order or sanction is first announced by KSA and shows the intention to issue a penalty or other sanction. An opinion (zienswijze) can be submitted by the offender against this. Usually it is already clear from the KSA intention letter how evidence was gathered on the alleged infringement of Dutch law. We have experienced that the gathering of evidence is not always accurate or legally sound. Of course the gambling provider involved can still take measures once it has received this intention to enforce the Dutch law. However an infringement that has been established can not be undone. However, future law infringements can be prevented. We advise to file always an opinion against te intention of KSA to start enforcement. We assist clients  to submit the opinion against the proposed penalty or sanction. Our administrative lawyers (advocaat bestuursrecht) will assist in enforcement procedures against government enforcement. If the opinion is not followed then the sanction decision will follow. This decision can be contested and gambling lawyers can lodge an objection against a decision. You can read more about this procedure here.

Risk for civil claims of players who lost money in online gambling

The Dutch court has recently made rulings with far-reaching consequences for the online gambling providers without a Dutch licence. Similar rulings have also been made in other countries. Online gambling companies Unibet and another casinos are required by the court to repay substantial sums of money to gamblers. This decision has profound implications and raises interesting questions about the regulation of online gambling and the rights of players. In these court procedures, the court determined that online gambling companies were responsible for the gamblers’ losses. The Dutch  court emphasized that online gambling was illegal in the Netherlands until October 2021, and the companies were aware of this situation. In a decision dated August 28, 2023, the court granted the money claim based on the nullity of a gambling agreement between a consumer and a professionally acting defendant. The nullity of an agreement with a company that does not have the necessary government license follows from Article 3:40(2) of the Civil Code. So, big risk for gambling providers that do not have the Dutch remote gambling licence but do allow access to players from the Netherlands.

Our team of specialized gambling lawyers is happy to assist you and answer your questions.