Presentatie René Jansen 17 juni 2021 (EGBA)

Good morning!

Firstly, I would like to offer my sincerest thanks for the invitation to speak to you today. I'm a passionate supporter of cross-border cooperation between regulators and my experience in multiple regulatory functions has taught me just how vital this type of collaboration can be. Two days ago, I was appointed chair of the Gaming Regulators European Forum, taking over from Jorn Starck of the Alderney Gaming Control Commission. Upon my appointment, I told GREF members that my ambition is to develop GREF into a partnership that is even more indispensable to all of us than it is today. I will do my very best to achieve this. One key focal point will be to facilitate the success of the newly established working group focusing on enforcement of illegal gambling. Related to this international cooperation, I recently sent a letter on behalf of a group of regulators to the European Commissioner for Internal Market in order to breathe new life into the EC Expert Group on Online Gambling.

Of course, we all must navigate different sets of laws, rules and regulations.
However, by and large, all regulatory authorities have the same objective: to protect consumers, prevent gambling addiction and tackle illegal practices.
The different sets of laws in each country means that efficient and effective information exchange is vital. We must also show illegal gambling operators that decisive cross-border action is being taken against them. To prepare for this meeting, I closely examined the mission as stated on the EGBA website. This mission statement indicates that GREF and EGBA seem to share the same objectives, albeit based on different positions and responsibilities.

EGBA has asked me to explain the situation in the Netherlands in particular. The presentations later will once again address international affairs. The Dutch Remote Gambling Act came into force on 1 April. This means the Netherlands is one of the last countries in Europe to legalise online gambling.
This is not particularly surprising, as gambling is a controversial topic in the Netherlands. It involves both religious aspects and other contentious ideological issues. Many long years of political debate have now been crystallised into a very detailed act that leaves absolutely nothing to chance.
Recently, I've been asked about this new law by people who think it might be too strict on licence applicants. Now, from a business perspective, I can understand these concerns. However, my basic principle is that the law is the law, and it reflects what our society thinks, so if this is the will of the legislature, then this is what we shall do.

As is the case for most European countries, the purpose of the act is to provide a sufficiently attractive range of legal gambling operators in order to drive illegal operators out of the market. The goal is 80% channelling of the market, i.e. in three years' time, 8 out of 10 gamblers will place their bets with legal operators. Legal operators must provide a protected environment.
Gamblers must not be allowed to spend more than a responsible amount.
And alarm bells must sound whenever a player shows signs of developing a gambling addiction. For these purposes, the act stipulates that an addiction prevention fund shall be established. Part of this fund will be used to establish a national service point where gamblers can get help 24/7.

On 1 April, the Kansspelautoriteit (Ksa) began to process applications for an online gambling licence. In the period leading up to this date, we worked very hard to establish the licence-issuing process. This took a huge amount of effort by the Ksa, we were setting up a completely new process from scratch.
Most of the applicants are international businesses operating in a high-tech and innovative sector. As well as issuing the licences, we also had to prepare for the situation after market opening on 1 October 2021. Things then got even more complicated when Covid struck, and we were no longer able to work together in person. However, with a little bit of practice, we got used to working from home very quickly. To process the licence applications, we set up a temporary department staffed partly by our own personnel and partly with temporary external professionals. We also set up a separate project to examine how our supervision activities will be conducted after 1 October, when the Dutch market opens to all operators licenced to provide online gambling services.

How will the Dutch market be structured?

Operators can apply for licences to provide four types of online gambling service:

• Casino games in which players play against the house (e.g., roulette)
• Casino games in which players play against each other (e.g., poker)
• Sports betting
• Horse racing and trotting races

We announced earlier this spring that we have received 29 licence applications. These applications are currently being processed,
and the number of applicants could well rise in the foreseeable future. As I said before, strict demands have been set for these operators,
and I would certainly not rule out the possibility that several companies are working on compliance with these requirements before submitting their application. There may also be other operators who are waiting to apply for a licence due to the mandatory ‘cooling-off’ period. This is in line with the so-called Postema motion that was adopted by Parliament as part of the Remote Gambling Act.

As a result of this Parliamentary motion, operators who have been offering illegal gambling services specifically targeted at Dutch consumers will not be granted a licence at the same moment as companies who respected the rules.
This means that an applicant must not have actively offered gambling services to Dutch consumers from mid-2018 onwards. In order to assess this issue, we continually monitored around 100 websites over the past few years to determine whether they targeted Dutch consumers in their marketing and communication, e.g. by using the Dutch language, by using specific symbols or by accepting Dutch payment methods.  Therefore, because of the cooling-off period, several operators will have to wait before they can apply for a licence.

So, what can I say about the situation from 1 October onwards?
The supervision of online operators will be primarily data-driven.
As of this date, licenced operators will be obliged to set up a data safe and periodically provide data from this vault to Ksa. This data will lay solid foundations for our supervision activities. We developed a format that specifies what data we require and how and in what form it should be provided. We recently invited a few operators to test this format,
and to work together with us to determine whether our ideas are practically applicable.

In any event, an important focus of our oversight activities will be whether sufficient attention is paid to the prevention of gambling addiction.
This is, after all, a primary objective of the act. Consumers who wish to gamble online must be able to access legal operators who provide a safe environment. In this regard, a safe environment means honest gameplay, attention to addiction prevention and no stimuli to continue gambling.

What do we expect will happen in the market? Will there be a shift from land-based operators to online operators? I don't have a crystal ball, though I can safely say a few things. In February, we published a report on our website containing a forecast of the Dutch online gambling market. Among other matters, this report showed that the online market in the Netherlands has been growing even though these operators were providing services illegally.
As a result, simply banning online gambling has become almost entirely impracticable and online distribution is gaining ground in many areas and markets. We can also conclude from the report that this growth would have been much greater without the announcement that targeting Dutch consumers illegally, would imply a future exclusion of the then legal online gambling market. Operators were clearly anticipating this move.

Among other factors, this is clearly shown by the comparison with Sweden, where online gambling was legalised in the beginning of 2019 and hence the situation is reasonably comparable to the Netherlands. In Sweden, whether a company had operated illegally prior to the legalisation of online gambling, did not play any role in the decision to issue a licence to applicant operators.
Another contrast with Sweden was that in recent years, the Netherlands had actively combatted illegal gambling operators to the greatest extent possible.
According to the report, the Netherlands' gross gaming revenue is expected – according to H2 Gambling Capital estimations - to reach approximately 800 million euros in 2024. In 2019, this figure was over 400 million euros, so in three years' time we might expect the result to have doubled. But once again, this is just an estimation, I don't have a crystal ball.

What criteria must be met before we can say the legalisation and regulation of online gambling in the Netherlands has been a success? Earlier, I mentioned the government’s objective to channel 80% of online players to the legal market. This target is also addressed in the afore mentioned report.
The report indicates that it should be possible to channel 90% of the market share in the long term. Other studies have also shown that the vast majority of gamblers prefer to use legal operators. However, you must bear in mind that this data relates to recreational players only.

Another way to measure the channelling rate is to examine revenue streams.
It goes without saying that on average, frequent players spend more money on gambling services than recreational players. After all, regular gamblers are more interested in pay-out percentages and tend to be less interested in whether their preferred operator has a licence. For this reason, achieving the channelling target in terms of gross gaming revenue will be relatively more difficult. The researchers at H2 Gambling Capital predict that three years after the Remote Gambling Act comes into force, the channelling rate in terms of gross gaming revenue will be approximately 70%. They mention that one of the contributing factors for this is the relatively high gambling taxes in the Netherlands (29%). Another vital factor in achieving the goal will be the amount of effort devoted to combatting the remaining illegal operators.
The act gives us plenty of extra powers to do this and we will make the very most of these new competences. The most important of these new legal provisions is the power to block payment transactions between illegal operators and players by issuing legally binding instructions to payment-service providers.

A second key indicator of success is social acceptance, or - maybe better stated - avoiding public commotion. In countries all around us, we witnessed a great deal of outcry surrounding the advertising activities of gambling operators. This prompted various types of government intervention in countries such as Belgium, Spain, Italy, and the United Kingdom.
Of course, everybody here knows all about what was and is going on in these countries. To avoid a repeat of this scenario, I have made several appeals to gambling operators to limit the amount of marketing and advertising that they aim at consumers. Gambling operators must not seek to push the boundaries of the law. Now, I understand that these appeals may not be easy to fulfil. After all, a new legal market is opening, all licenced operators will be competing hard to establish themselves and advertising will be a key factor in these efforts. However, it should be done responsibly. And the operators must take into account Ksa’s supervision. If the adverts encourage excessive gambling, or if the adverts are deceptive, then we can - and will - intervene.

In a few years' time, I hope we can all look back and say that the opening of the online gambling market in the Netherlands is a shining example of how things should be done. If we wish to achieve this, it is vital that we work hard, and we work together. I would like to close by highlighting one vital success factor: our ability to make business life difficult for the remaining illegal operators.

At the beginning of my speech, I mentioned the importance of collaboration within GREF in this area. Furthermore, the Kansspelautoriteit has recently concluded several Memoranda of Understanding with Sweden, Belgium, France, the United Kingdom and Malta. These MoU’s enable more specific data exchange with the gambling authorities of these countries. All in all, I would say we're fully prepared to open the market. Let the games begin!
Thank you very much for your attention!