21 March 2017

Permit for gaming in the Netherlands

Category: Licenses

Any betting company to operate a game of chance such as a lottery in Netherlands is subject to stringent legislation. The Games of Chance Act (the Gaming Act) and various Dutch regulations set out the rules and conditions which the gaming operator have to meet. According to the Gaming Act you have two different types of games of chance, non-occasional games and exclusive game of chance. The exclusive games are listed in the Gaming Act, think of the Lotto, Instant Lotteries and Sports Betting (online gaming is still prohibited but will be allowed in the course of 2017 in the Netherlands). All these forms of gambling in the Netherlands are exclusive and limited, it means that no extra permits are provided to new entrants on the market that offer the same betting product already license exclusively. The category that remains open for permits is the non-occasional lottery.

Dutch Act Online Gaming in the making

Online gambling is not allowed at the moment and permits are not granted. However, there will be soon very likely an escape. Recently, a law was adopted by the Dutch parliament regulating online gambling in the Netherlands. We are waiting for the ratification of this Act by the Dutch Senate. Our expectation is that the legislative process will be completed this year so that it is possible in the future to offer games of chance on an online platform. The alternative is not to present the product as an online game of chance. Also read: Dutch Parliament adopts Bill on Online Betting

Proceeds or Dutch gaming destined for charities

In the Netherlands you can only start a game of chance like a lottery if you do not pursue profit. The licensee for a game of chance has to pay 50% of the proceeds from the raffle to charity or (beneficiary). 80% of this levy which goes to the beneficiaries (dutch trusts) should have an ANBI status. The licensee may only make strictly necessary expenses. These are the costs that can be directly linked to the organization of the lottery and the normal cost of business. Such normal costs of business are for example software- and licensing cost. The premises where the business is located must not be in a very expensive location, or investments are also included below cost is not clear. It is essential that the costs and charges are substantiated in great detail, this is very strictly assessed in the license application. More on Dutch Businesss licences you can read in my book: Business Licences in the Netherlands

Cost structure for Dutch betting company

As already mentioned it is not allowed to be make gains. The betting company should be able to operate on the basis of a proper cost structure like the existing 9and succesfull) licencees. Any commission to sellers of items should be limited to a maximum of 10% of the value of the tickets sold through them. It is also prohibited for the lottery operator to obtain benefits from the proceeds of the lottery in the Netherlands coming from parties other than charities. The payment of a minimum percentage of prize money of the proceeds from the raffle should not be linked to any condition.

Requirements for Dutch gaming license

The Dutch Gambling Authority is reluctant allowing new entrants on the gaming market, but they have to handle any application for a permit. It is therefore important that before the application is submitted all requirements in the permit are met and well motivated. If a permit is granted it is valid for a period of five years. We assist clients with the process of preparing the application. In this process we may obtain further information from the Gaming Authority in order to get the application in good shape.